Korea Environmental Policy Bulletin - Natural Gas Vehicles Promotion Program in Urban Areas

With the increase of motor vehicles on the road in Korea, transportation has become a significant source of air pollution. In particular, diesel vehicles emit large amounts of particulate matter (PM10) and nitrogen oxide (NOx), which is the reason why diesel buses are being replaced by NGVs (natural gas vehicles). Pilot projects for NGVs started in 1998, and as of December 2007, 15,097 natural gas buses and 289 natural gas garbage trucks have been introduced. Ministry of Environment plans to replace 23,000 diesel vehicles with NGVs and install 400 natural gas stations by 2010. In order to increase the demand for natural gas buses, financial incentives and tax benefits are being offered for the purchase of the vehicles, or for the installation and operation of natural gas stations. The benefit of this program is estimated to reach 1.57 trillion Korean won in environmental improvement effect and 1.22 trillion Korean won in net economic benefi