Seoul to slash LNG import fee, making its taxes cheaper than coal

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Seoul to slash LNG import fee, making its taxes cheaper than coal

By District Energy posted 03-19-2019 17:49

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Summary

The South Korean government will sharply ease fees for importing liquefied natural gas (LNG) in addition to the sales tax cut, making its taxes cheaper than coal to spur the migration to cleaner fuel in an effort to fight the worsening air pollution.

The Ministry of Trade, Industry, and Energy proposed to axe the surcharge on LNG imports to fuel power generators from the current 24.2 won ($0.02) to 3.8 won per kilogram. The revised tax code was approved by the state council and would go into effect on Apr. 1.

The move is expected to boost the use of LNG, which had so far been levied with heavier taxes than fossil fuel.

Due to its low emissions, LNG’s environmental costs are half those of bituminous coal. But its total tax levies, including special consumption tax, import surcharge and tariffs, had been 91.4 won, more than double the 36 won of bituminous coal.