Environmental Technologies Industries

Environmental Technologies Industries

Market Plans

South Korea Environmental Export Market Plan

Chapter 7 - Air Pollution

This chapter covers industrial air pollution (including emissions depleting ozone, contributing to global warming, and causing acid rain and human disease), vehicle emissions, and energy efficiency including renewable energy technologies.

Institutional Structure

Korea’s regulatory framework for managing air pollution control issues is based on the Air Quality Preservation Act of 1990 (amended in 1999). The Ministry of Environment is responsible for managing all environmental issues including air quality control on the national level, including policy planning and implementation.

The MOE headquarters has the Air Quality Management Bureau consisting of four divisions:

Air Quality Policy Division
Air Pollution Control Division
Automotive Pollution Control Division
Noise, Vibration & Dust Control Division.

Air pollutants are defined as smoke, gases, and offensive odor having adverse impacts on human health and ecosystems. By law, 52 matters are currently defined as air pollutants. Air pollutants are broadly classified into gaseous matters and particulate matters. Gaseous matters are generated from the combustion of fuels or chemical reactions, such as nitrogen oxide, sulfur dioxide, carbon monoxide, and stratospheric ozone. Suspended particulate matters are defined as microscopic matters with grain diameters of 0.1 m to 1 m which are emitted from factories and other business establishments as a result of the combustion of fossil fuels or other processes.

The government began to establish standards for air pollution control in 1979. The standards became more stringent in 1995 and even more so in 1999. Based on the relevant provisions of the Air Quality Preservation Act, the more demanding standards are applied in two industrial areas: Ulsan Mipo-Onsan and Yochon.

In Korea, the standards for air pollution control are concerned with 26 substances including sulfur dioxide (SO2), carbon monoxide (CO), nitrogen dioxide (NO2), total suspended particulates (TSP), particulate matters (PM-10), ozone (O3), and lead (Pb). Since 1990, Korea’s air quality has generally improved or remained relatively stable in terms of the level of these major pollutants, except for ozone. In Seoul, for instance, the average annual ozone emission increased from 0.009 ppm in 1990 to 0.017 ppm in 1998 as a result of an increasing number of motor vehicles and more use of organic solvents. Other large cities in Korea such as Pusan, Taegu, Taejon, Kwangju and Inchon show similar trends in terms of ozone emission.

There are currently over 31,000 business establishments that are listed with MOE as air pollutant emitting businesses. The regulatory authority on air pollution control over these emitting businesses is divided into regional governments and environmental management offices under the jurisdiction of MOE. Regional governments are responsible for managing more than 24,000 businesses, and MOE for approximately 7,000. Air pollutant emitting establishments are categorized into 5 classes depending on the volume of annual fuel consumption.

Air Quality Standards

*Pollutant*	*Standards*	*Measuring method*
Sulfur dioxide (SO2)	Annual average 0.03 ppm 24 hour average 0.14 ppm Hourly average 0.25 ppm	Pulse U.V. Fluorescence Method
Carbon monoxide (CO)	8 hour average 9 ppm Hourly average 25 ppm	Non-Dispersive Infrared Method
Nitrogen oxide (NO2)	Annual average 0.05 ppm 24 hour average 0.08 ppm Hourly average 0.15 ppm	Chemiluminescent Method
Particulates: Total suspended particulates (TSP) Particulate matters (PM-10)	Annual average 150 g/m3 24 hour average 300 g/m3 Annual average 80 g/m3 24 hour average 300 g/m3	Beta-Ray Absorption Method High Volume Air Sampler Method
Ozone (O3)	8 hour average 0.06 ppm Hourly average 0.1 ppm	Beta-Ray Absorption Method
Lead (Pb)	3 month average 1.5 g/m3	Atomic Absorption Spectrophotometry

Source: MOE Website (September 2000)

Regional governments and environmental offices conduct regular or surprise inspections of pollution emitting facilities. In 1998, they conducted a total of 48,149 inspections and founded 2,286 violators (7.4 percent of total inspections), and 956 companies were subject to administrative orders or criminal indictment. The number and ratio of violation has decreased since 1993 as Korean companies have increased investments in air pollution control equipment.

To effectively accomplish this complex inspection program, the national and local governments maintain monitoring systems nationwide, including telemetering systems, monitoring vehicles, and acid rain monitoring stations. Installing smoke-stack telemetering systems also is required or encouraged for certain emitters or in special industrial areas. In addition, the government designates two industrial areas (the Ulsan Mipo-Onsan National Industrial Complex and Yochon National Industrial Complex) as special management areas. The environmental authorities also enforce specific measures for managing main air pollutants including sulfur dioxide, spreading particulate, offensive odor, volatile organic compounds, ozone, and acid rain.

As the number of registered motor vehicles exceeded 11 million in 1999, they have become the main sources of air pollution. In Seoul, motor vehicles produce approximately 85 percent of the city’s air pollution emissions, compared with 55 percent in 1991. Commercial vehicles such as buses and trucks account for only 4 percent of total motor vehicles but generate 47 percent of all air pollution emissions. The government measures to reduce motor vehicle pollution include development and commercialization of natural gas buses. The government plans to have 5,000 CNG (compressed natural gas) buses operating in 8 cities by 2002 when the World Cup soccer games are held.

As previously stated, motor vehicles are the main source of air pollution in Korea. According to 1999 statistics, motor vehicles emitted 1.8 million tons of air pollutants, accounting for 41 percent of total volume of air pollutants generated (4.4 million tons). In particular, motor vehicles account for 89 percent of total carbon monoxide emission and 88 percent of hydrocarbon emission. Other sources of air pollution are industries (27 percent), power generation (17 percent), and heating (6 percent).

Korea’s environmental standards for air pollution control are established in a way to conform to the standards recommended by the World Health Organization (WTO). Air pollution control standards were introduced in 1979 when those for sulfur dioxide were established. Standards for carbon monoxide, nitrogen dioxide, suspended particulate, ozone, and hydrocarbon were added in 1983, and those for lead in 1991. In 1993, the government drafted and began to enforce more stringent standards. At the same time, new standards for particulate matters were adopted as the number of motor vehicles increased very rapidly, while those for hydrocarbon were excluded from the list.

Infrastructure Development

Both government and industry operate air quality monitoring systems as described below:

Air pollution monitoring stations (telemetering systems): Environmental Management Offices (EMOs) and local governments operate air pollution monitoring stations to monitor six major pollutants on a continuous basis. All monitored data are transmitted in real time to the EMO and the Ministry of Environment through telemetering systems (TMSs). There are 142 TMSs operating in 49 cities nationwide, of which 101 TMSs are managed by MOE and 41 TMSs by local governments.

Air pollution monitoring vehicles: In the areas where TMSs are not installed or other special areas, EMOs operate monitoring vehicles to monitor air pollution. Currently, there are 8 monitoring vehicles operated by regional EMOs.

Acid rain monitoring stations: Since 1983, EMOs have operated acid rain monitoring stations to monitor rain acidity. Currently, there are 95 monitoring stations operating in 48 cities.

Smoke-stack TMSs: Emitting companies began to install smoke-stack TMSs in the Ulsan industrial area in 1986. Smoke-stack TMSs continuously measure particulate, SOx, NOx, NH3, HCl, HF and CO to produce measured data every five minutes. In 1999, 188 companies operated TMSs. In Ulsan and Yochon areas, 89 companies operate 444 TMSs on 262 smoke-stacks according to administrative orders. 99 other large facilities such as cement plants and power plants operate 673 TMSs on 359 smoke-stacks in compliance with administrative recommendations. In the special industrial areas of Yochon and Ulsan Onsan, TMS control centers have been built since 1997 with a total budget of $5.5 million and is now in test operation. Starting in 2000, a new control center is under construction for the Capital Zone surrounding Seoul. MOE allocated $3.7 million to this new project for 2000.

Market Size, Competitive Situation, and Market Opportunities

Unlike the water-wastewater and solid waste sub-sectors, Korea’s market for air pollution control is driven by increasing investments in the private sector as the government enforces more demanding regulations. According to the Bank of Korea’s environmental data for 1999, industries accounted for 91.8 percent of the nation’s total environmental spending, compared with 3.2 percent for the government and 5.0 percent for households. The size of the market for all air pollution control products and services was estimated to be $1.13 billion in 1999, up 21 percent from $930 million in In 2000, this market is expected to reach $1.2 billion.

In the 1990s, the industry sector’s investment in air pollution control continued to increase to reach $733 million in 1997 but declined greatly to $446 million in 1998 amid the financial and economic crisis. In 1999, investments in air pollution control facilities by industry expanded by 26 percent to reach $562 million as Korean companies needed to install or upgrade air pollution control equipment to meet the more demanding regulatory requirements. In 1999, Korean industries also increased their spending on managing and maintaining their air pollution control equipment by approximately 15 percent: from $414 million in 1998 to $475 million in 1999. Thus the total size of the industrial-sector market for air pollution control grew 20.6 percent from $860 million in 1998 to $1.04 billion in 1999.

In the public sector, the great majority of investment spending in air quality management has been made in building and maintaining air pollution monitoring systems and TMS control centers for smoke-stack telemetering systems. Starting in 2000, the Ministry of Environment secured a budget to support industries in purchasing CNG buses and building CNG stations in an effort to reduce automobile emissions. MOE plans to have 20,000 units of CNG buses and 210 CNG stations operating by 2007. MOE’s budget for subsidy and loans is allocated at $30.4 million to support 1,500 CNG buses and 30 stations. MOE’s budget for air quality monitoring systems for 2000 is $5 million.

According to MOE and the Korea Institute of Science and Technology (KIST), Korea’s technological capability in air pollution control is estimated to range from 30 percent to 70 percent, depending on the level of sophistication in each specific field of technology, given that the comparable capability of advanced nations including the United States is 100 percent. Korean air pollution control technology has improved to the extent that local manufacturers are now able to fabricate unsophisticated equipment such as bag filters and cyclone collectors. But the Korean industry still relies on foreign technologies in sophisticated fields. In the 1990s, more than 30 foreign companies transferred their air pollution control technologies to Korean companies. Japanese, U.S., and German companies have been most active in this field. Major areas of such technology transfer agreement include multicyclones, electrostatic precipitators, dust collectors, and desulfurization.

According to Korea Environment Industry Association, around 570 companies are active in Korea’s market for air pollution control, of which 169 firms specialize only in the air pollution control field. Main areas of air pollution control technology and equipment required by Korean industries include crude oil desulfurization, other industrial desulfurization, and exhaust gas treatment. The leading specialist firm in this field is Korea Cottrell, which has produced air pollution control equipment since the 1960s. Although most Korean equipment manufacturers can produce only low-tech products, this company can produce electrostatic precipitators. Other firms that produce electrostatic precipitators include Korea Heavy Industry, Halla Heavy Industry, and Hyundai Heavy Industry.

As Korea’s major industries increase business activities and more stringent regulations are enforced, Korean companies will need to increase their investments in air pollution control in the process of expanding or upgrading their facilities. For U.S. suppliers of air pollution control equipment, large manufacturing companies affiliated with major conglomerates, such as Hyundai, Samgung, LG and SK, and the state-run Korea Electric Power Corporation will continue to be the main target customers. U.S. engineering companies will find licensing opportunities with leading Korean general and specialized environmental engineering and construction firms. Main areas of air pollution control where the Korean industry still lacks technological capability include flue gas and fuel desulfurization/denitrification, high-efficiency dust collectors, motor vehicle emission reduction, and air quality measuring devices. Korea’s main industries that need advanced air pollution control equipment and operational technology include petrochemicals, power generation, automobile, electronics and steel.

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