Sejong, March 7 - The Ministry of Environment (Minister Han Wha-jin) announced that local governments would expand the types of vehicles eligible for the early scrappage subsidy program from Grade 5 diesel vehicles to Grade 4 diesel vehicles, forklifts, and excavators, starting from mid-February 2023. The Ministry of Environment will subsidize up to 245,000 vehicles, including 170,000 Grade 5 vehicles, 70,000 Grade 4 vehicles, and 5,000 forklifts and excavators. Grade 4 vehicles eligible for the early scrappage subsidy program are diesel vehicles not equipped with diesel particulate filters (DPF) by the time they are delivered. Forklifts and excavators are only eligible for the subsidy program if local governments register them as construction machinery.

The Ministry of Environment will increase the number of subsidies for recipients of the national basic living stipend, people in the second-lowest income bracket and micro enterprises from a fixed rate of 10% of the vehicle price (average KRW 150,000) to a flat rate of KRW 1 million to encourage early scrappage. The Ministry will also increase additional subsidies for applicants that scrap their trucks and special vehicles (gross weight less than 3.5 tons) that cannot be equipped with a DPF among Grade 5 vehicles from KRW 600,000 to KRW 1 million.

The Ministry of Environment provides additional subsidies when owners scrap their old vehicles and purchase zero-emission (electric or hydrogen) vehicles. Until 2022, the government subsidized KRW 500,000 for owners purchasing zero-emission vehicles only after scrapping their old vehicles weighing less than 3.5 tons and a passenger car with five or fewer seats. Starting in 2023, owners of all vehicles weighing less than 3.5 tons will receive the same amount if they purchase a zero-emission vehicle after scrapping their old cars. In the past, vehicles weighing over 3.5 tons were eligible for support only if the owner scrapped their vehicles to purchase a new vehicle (200% of the insurance value of the scrapped vehicle). However, the Ministry will support owners who purchase used Euro 6 vehicles manufactured after October 1, 2017.

Owners of Grades 4 and 5 vehicles wishing to be subsidized for early scrappage can check their eligibility and apply for the program on the website (mecar.or.kr). Owners of Grades 4 and 5 vehicles, forklifts, and excavators can apply for the subsidy at the registered local government or the Korea Automobile Environment Association. Among Grade 4 diesel vehicles, cars that were delivered with a DPF are excluded from the subsidy program in 2023. However, the Ministry plans to review the budget to include them in the 2024 program. 

Meanwhile, the number of Grade 5 diesel vehicles without exhaust emission reduction devices dropped from 1.6 million in 2019 to 400,000 by the end of 2022. It was attributed to implementing emission reduction measures for 1.2 million units over the past four years through subsidy policies (early scrappage, DPF installation). As a result, ultrafine particles were reduced the same amount as 1.2 times the amount of ultrafine particles emitted in 2019 within Seoul. As of the end of January 2023, among Grade 5 vehicles (covered by automobile insurance) in operation, the number of units that are not implemented emission reduction measures amounts to 402,000 (38,000 in the metropolitan area and 364,000 in non-metropolitan areas). The Ministry of Environment plans to implement emission reduction measures further, including early scrappage by 2024 for these Grade 5 vehicles. 

Park Yeon-jae, Director-General of the Air Quality Policy Bureau, said, "The Ministry of Environment will extend the early scrappage subsidy program to Grade 4 diesel vehicles and construction machinery, in addition to Grade 5 vehicles, to reduce ultrafine particles and protect public health." He added, "We will continue to support everyday citizens, including car owners from low-income groups and micro enterprises."

Contact: Kim Hyun-joo, Deputy Director

Transportation Environment Division / +82-(0)44-201-6929

Foreign Media Contact: Chun Minjo(Rachel)

+82-(0)44-201-6055 / rachelmchun@korea.kr