S. Korea sends 2nd official feedback to U.S. on Inflation Reduction Act

All News 16:00 December 02, 2022

SEOUL, Dec. 2 (Yonhap) -- South Korea sent another official written opinion to the United States on Friday regarding the Inflation Reduction Act (IRA) that stipulates tax incentives for clean energy sectors, the industry ministry said.

The U.S. Treasury Department is requesting public input to devise guidance on the implementation of the IRA amid mounting complaints over its discriminatory nature of giving up to US$7,500 in tax credits to buyers of electric vehicles assembled only in North America.

Last month, South Korea provided its first official comments on EVs and related sectors, and the latest input was on tax benefits for clean hydrogen and fuel production, carbon capture and commercial eco-friendly cars, according to the Ministry of Trade, Industry and Energy.

The deadline for the second submission is Dec. 3.

"The government calls for comprehensive interpretation of 'commercial eco-friendly cars' and definite criteria for tax incentives in clean energy fields to minimize investment uncertainty," the ministry said in a release.

As for earlier inputs regarding EVs, South Korea, the European Union, Japan, Canada and several other nations had sent a total of 3,795 statements to the U.S., according to the ministry.

The act has sparked concerns that Hyundai Motor and Kia Corp. could lose ground in the U.S. market, as they make EVs at domestic plants for export to the U.S, and South Korea has strongly voiced the need to create exceptions for Korean-made EVs.

On Thursday, U.S. President Joe Biden acknowledged that the law may have "glitches" during a joint press conference with French President Emmanuel Macron, according to foreign media reports.

"The law partially poses challenges to our firms, but it could also offer tremendous chances in a wide range of sectors," a ministry official said. "We are working on the issue in a comprehensive and strategic manner."