The government, Hyundai Motor Company, and Kia Motors have joined forces to support carbon reduction efforts for their auto parts suppliers. The Ministry of SMEs and Startups and the Ministry of Trade, Industry and Energy announced on the 17th that they held a "Carbon Reduction Mutual Growth Agreement Ceremony in the Automotive Supply Chain" with Hyundai Motor Company, Kia Motors, 87 auto parts suppliers, and the Korea Automotive Parts Industry Promotion Foundation to enhance the carbon competitiveness of the automotive supply chain.
As carbon regulations in major countries, including the European Union, have been strengthened from the workplace level to the product level, the carbon footprint generated during the production process is becoming a new export regulation criterion. Accordingly, the government, Hyundai Motor Company, and Kia Motors have decided to promote the low-carbon transition of their parts suppliers to enhance the carbon competitiveness of the entire automotive industry.
The Ministry of SMEs and Startups plans to expand support for SMEs' investment in low-carbon facilities, and the Ministry of Trade, Industry and Energy is conducting pilot projects targeting four supply chain consortia this year. Starting next year, the Ministry plans to expand reduction efforts across the entire supply chain through the "Industrial Supply Chain Carbon Partnership Project."
Under this agreement, the Ministry of Trade, Industry and Energy and Hyundai Motor Company and Kia Motors will initially support the replacement of carbon-reduction equipment by first-tier suppliers. These first-tier suppliers will then return the subsidies to support second-tier suppliers in collaboration with the Ministry of SMEs and Startups. This is expected to have a cascading effect of reductions throughout the supply chain. Furthermore, by supporting the low-carbon transition of their suppliers, Hyundai Motor Company and Kia Motors will reduce the carbon footprint of their finished vehicles and will be able to utilize emission credits acquired through external projects in the emissions trading system.
The government, Hyundai Motor Company, and Kia Motors expect this collaborative model to serve as a catalyst for a sustainable transition in the industrial ecosystem, and they plan to expand the supply chain carbon partnership to other key industries, including electrical and electronics, steel, petrochemicals, semiconductors, and shipbuilding.
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