The South Korean government has invested 49.2 billion won over two years to replace energy equipment for small businesses, but only 34 locations were inspected last year. Despite the ability to verify the closure status of supported businesses, there have been no instances of such checks by relevant agencies. Some businesses have completed their equipment disposal restriction period without being included in the inspection list.
According to data from the Korea Energy Agency obtained by Rep. Park Soo-min of the ruling People Power Party through the National Assembly's Climate, Energy, Environment, and Labor Committee, the agency allocated 49.277 billion won to 1,299 businesses as part of the 'Small Business Energy Efficiency Improvement Support Project' for 2024-2025. In 2024, 769 businesses received 29.651 billion won, while 530 businesses received 19.626 billion won last year.
Last year, the agency identified 334 of the 769 businesses supported in 2024 as subjects for post-management, selecting 34 for field inspections. The remaining 435 were excluded from inspections because their one-year disposal restriction period had expired. At that time, businesses receiving over 30 million won in government support were subject to a three-year disposal restriction, while those receiving less were subject to one year.
As of September this year, there are 1,349 businesses still under the disposal restriction period, including 334 from 2024, 221 from last year, and 794 from this year. These businesses received a total of 65.656 billion won in subsidies.
During the disposal restriction period, businesses must maintain the equipment they received support for. Any transfer, disposal, or abandonment of the equipment requires prior approval from the agency, and violations can result in the recovery of all or part of the subsidies.
However, the agency has never checked the closure status of supported businesses. Although it can be verified through the National Tax Service using the business registration number, there have been no reported cases of such checks. The agency plans to consider using closure information to identify and select inspection targets in the future, explaining that it is difficult to confirm transfer status through agency data.
There have been no cases of voluntary reporting for equipment disposal or violations detected through inspections in this project. No violations have been confirmed through complaints or reports. In contrast, the similar 'Energy Efficiency Market Creation Project' received one closure report in 2023 and one transfer report in 2024. The agency is currently pursuing an evaluation of the remaining value of the equipment for the closure case and the recovery of subsidies.
Starting this year, the agency has extended the disposal restriction period to five years. It plans to increase the number of field inspections from 34 last year to about 100 this year, raising the inspection rate from 10% to 30%. The agency maintains that comprehensive inspections are burdensome due to travel costs and administrative demands. It will also establish operational guidelines by the end of the year that include instructions for voluntary inspections and reporting, as well as criteria for disposal restrictions and subsidy recovery. However, this year will still use a sampling inspection method, meaning some businesses will not undergo on-site verification.
Rep. Park Soo-min stated, "The government's role should not end with providing financial support. If hundreds of billions of won have been invested without even confirming closure statuses, we need to examine whether there were truly no violations or if there were management blind spots that prevented detection." He emphasized the need for a robust post-management system that includes confirming violations and recovering funds before expanding support.
* This article has been translated by AI.
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