The South Korean government is set to establish criteria for designating special zones aimed at proactively supporting regions expected to face job losses or economic downturns due to the transition to carbon neutrality, including the closure of coal-fired power plants. Applications for designation can be submitted even before any adverse impacts occur, and local stakeholders, including labor and management from partner companies and residents, will be involved in developing transition plans.
The Ministry of Employment and Labor announced that it will publicly notify the draft of the 'Guidelines for Designating Just Transition Special Zones' from October 23 to November 2.
Just Transition Special Zones are designed to assist areas where significant changes in industrial and employment conditions are anticipated due to the shift toward carbon neutrality. This initiative is based on the Carbon Neutrality Basic Act and aims to prevent the burden of the transition from disproportionately affecting specific regions, workers, and vulnerable groups.
The draft guidelines notably include support for regions where actual employment shocks have occurred, as well as those where such shocks are expected. Areas undergoing the transition to a carbon-neutral society can qualify for designation if they meet at least one of three criteria: significant changes in employment conditions, deterioration of the business environment, or the need to address socio-economic inequalities.
Applications will be submitted by city and provincial governors to the Ministry of Employment and Labor and the Ministry of Trade, Industry and Energy at the municipal level. It is also possible to apply by grouping two or more municipalities.
Before applying, governors must establish their own plans for industrial, employment, and economic recovery in the region and publicly announce these plans for at least 20 days. The planning process will involve gathering input from stakeholders, including labor and management and local residents. Notably, labor and management from partner companies will also be included in the consultation process to discuss the direction of local responses to the transition.
The designation period will be a minimum of two years. After a review, it can be extended once for up to two additional years, and if deemed necessary, it can be extended for one more year. Thus, the maximum designation period is five years. Local governments needing an extension must submit relevant documentation two months before the expiration of the designation period.
Once designated, the Ministries of Employment and Labor and Trade, Industry and Energy will collaborate with relevant agencies to develop support measures for unemployment prevention, re-employment promotion, business stability, and regional industrial transition. Governors will then create implementation plans based on these measures and submit them to the two ministries.
A support system will also be established to assist local governments in their applications and planning. Specialized agencies, such as the Korea Employment Information Service and the Korea Industrial Technology Promotion Agency, will serve as central support centers to facilitate administrative procedures. After designation, local support centers established by local governments will assist in implementing plans and identifying new support projects.
The Ministry of Labor, in conjunction with the Ministry of Trade, Industry and Energy, plans to review the feedback received during the public notification period and finalize the guidelines for implementation. Following this, applications from local governments will be accepted, and special zones will be designated after review by the National Climate Crisis Response Committee.
Minister of Labor Kim Young-hoon stated, "While carbon neutrality is an unavoidable global trend, the burdens arising from this process should not be concentrated on specific regions, workers, and vulnerable groups. We will do our utmost to complete the establishment of these guidelines promptly so that regions expected to face shocks can be designated as special zones in a timely manner and receive adequate support."
* This article has been translated by AI.
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