Korea - Environmentally Friendly Product Promotion
Overview:
The Government of Korea recently announced plans to promote environment-friendly and cutting-edge technologies, promising a total investment of 287 trillion won ($ 220 billion) by 2013.
As the first country in the world to oblige public agencies to purchase only environmentally-friendly products, businesses seeking to provide such to Korea, or to enter the Korean market generally, would do well to focus on the eco-friendliness of their products or services.
This report, part of a GLOBE-Net series on the Korean environment market, reviews the importance of eco-friendliness in the Korean marketplace, and introduces both the procedures and the benefits of the Korean government’s environmentally friendly product promotion system in three areas: environmentally friendly products, Eco-labelling and the designation of environmentally friendly enterprises.
As defined in the Korean legal system:
Environmentally friendly products are defined as goods and services for which environmental pollution has been reduced through the entire process of normal production-consumption-disposal, and for which the usage of natural resources and hazardous substances has been minimized.
The Eco-labelling system attaches an “e-mark” to products that generate relatively less pollution or that preserve resources in the process of manufacturing and consumption compared to other products designed for the same use; provides accurate environmental information about the product to consumers; encourages companies to develop and manufacture environmentally friendly products to satisfy consumer preferences; and shapes future manufacturing and consumption activities.
The ’environmentally friendly company’ designation system is designed to induce voluntary participation of corporations in environmental improvement through collaborative partnerships between government and corporations rather than by means of direct-control or after-the-fact management methods of environmental control.
Market Trends
The total environmentally friendly product market in Korea is estimated at 12 trillion won ($12 billion). Purchases by public agencies reached 1.3 trillion won ($1.3 billion) in 2007, demonstrating rapid growth from 250 billion won ($250 million) in 2005. Public agencies buy eco-friendly goods mainly online or via the Korean Public Procurement Service.
Eco-labelling programs have been undertaken in approximately 40 countries. Eco-friendly products as recognized in the EU, the Nordic Council, Canada and Japan are treated as environmentally friendly in Korea.
Competitive Environment
To date, 5,450 products from 1,179 companies met the eco-label standard in 126 target products in areas such as household products, electronics, office products/machines, and construction/building materials.
As of February 2009, 179 companies have been designated as environmentally friendly enterprises in 12 categories, such as chemicals, electronics, and electrical sectors.
Relevant Laws
- Environmentally Friendly Products - Act on the Promotion of the Purchase of Environmentally Friendly Products
- Eco-labelling system - Development of & Support for Environmental Technology Act
- Environmentally friendly business designation - Development of & Support for Environmental Technology Act, Chapter 16, Article 2, and Enforcement Regulation Chapter 33 Article 4 (Environment-Friendly Company Designation System Operating Regulations (Ministry of Environment Announcement 2007-99, June 25, 2007)
Best Prospects
Korean public agencies must purchase environmentally friendly product under the Act on the Promotion of the Purchase of Environment-friendly Products
The environmentally friendly product market is expected to be reach at 20trillion won ($20 billion) by 2012.
Producers or sellers can utilize the Eco-Label certification as the marketing means for their products.
When a company is designated as environmentally friendly business, it receives several benefits, including exemptions from pollution inspection, reduction of waste charge and subsidizing installing environmental facilities.
Market Entry Strategies
Environmentally friendly products: Be sure to: include E-mark certified goods and goods that meet equivalent certification standards based on Environmental Technology Development and Assistance Regulations, GR (Good Recycled); mark products that have been approved by the Knowledge Economy Minister according to the Resources Conservation and Recycling Promotion Regulations and Industrial Technology Innovation Promotion Regulations, as products that meet similar certification standards.
Eco-labelling Program: Choose your eco-certified products or products certified for the same purpose and display the designated logo. A business, which wants to get eco-label, should provide Korea Eco-Products Institute (KOECO) related documents to prove their products are eco-friendly.
KOECO determines, by actual inspection, if the product is suitable for eco-labelling. After approval, KOECO tests the product regularly for meeting the eco-label standard. (KOECO runs two hour’s free consulting program on every Wednesday and provides detailed information about contents and procedure of Eco-labelling.)
To be designated as an environmentally friendly company, businesses must present evidence of an environmental management structure, and must report on the general status of their environmental management, environment assessment system in terms of influencing its business activities, in the management of pollutants by category such as air and water quality, and in reporting the environmental improvement plans of the company.
After a company has been designated as environmentally friendly by the screening committee, the committee will conduct an annual assessment of the company’s implementation of its environmental improvement plans. Limitations for qualification as E-friendly companies are following;
- 1. A person who received any one of several administrative measures such as orders for improvements, prohibition of use, closing orders to cease operations, cancellations of permissions, order ceasing of restoration to the original state or treatment, and orders to cease construction or accused and sentenced with more than monetary penalty for past 2 years based on the date of application.
- 2. A person who was excluded from the examination procedure of appointing environmentally friendly company and with less than 2 years from the date of notification of that fact.
- 3. A person receiving cancellation of appointment as an environmentally friendly company in accordance with article 19.3 of law and with less than 2 years from the date of cancellation.
- 4. A person who is under a process of litigation related with environmental problems or disputes mediation procedures in accordance with the law of disputes mediation for environmental contamination damage or from public complaints.
Key Contacts
- Public organizations seeking to purchase environmentally friendly products should check the on-line market (http://shop.ecoi.go.kr/), which sells eco-friendly products only.
- Exporters should also consider attending or exhibiting their products at major trade shows in Korea such as low carbon green growth Korea (http://www.ecoproducts.co.kr/)
- Korea is also considering a carbon emission labelling system, for more information at KOECO website (http://www.edp.or.kr/)
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