Energy Use Rationalization Act

The purpose of this Act is to promote green growth while contributing to international efforts to tackle climate change. The Act requires the government to consider the measures to attain effectively the goal of the national energy policy on the stability of demand and supply of the energy required for the sound development of the national economy, the minimisation of the factors of environmental damage caused by energy consumption, and the rationalisation of the energy utilisation. According to the Act, the government is to establish and enforce a comprehensive GHG mitigation policy, and local governments are to establish local plans accordingly.

A Basic National Energy Plan and the Basic Plan for Rational Use of Energy are to be drafted by the Minister of Trade, Industry and Energy, addressing demand-side and supply-side issues of energy efficiency, substitution between energy sources, measures to reduce GHG emissions by rational use of energy, education and publicity. The Plan should also include “matters concerning the implementation of the system for price indication for the rationalisation of energy use”. A national energy saving committee is formed under the provisions of the Act.

Based on previous versions of the Act, the government has provided long-term and low interest rate loans from the Fund for Efficient Use of Energy for energy efficiency and conservation investments since 1980. Every fiscal year, a given amount from the Fund is allotted to the eligible loan applications from a government financial source named the Special Accounts for Energy and Resources.

Based on the Act, Korea’s energy conservation programmes and activities are planned and put into action by the Republic of Korea Energy Management Corporation (KEMCO), established in 1980 based on the Act. KEMCO functions as the national energy efficiency centre responsible for the implementation of the national energy efficiency and conservation programmes. The Act continues to detail issues which need to be addressed, such as standby-power standards, utilisation of waste heat, management of equipment, support to enterprises specialising in energy savings, etc.

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