Program Overview and 2026 Updates
The Carbon Neutral Facility Investment Support Program by the Ministry of SMEs and Startups (MSS) is a flagship policy initiative that directly funds SMEs—those not subject to the Korean Emissions Trading Scheme (K-ETS)—in adopting greenhouse gas reduction equipment. From 2026, it will be clearly separated from commercialization support and focus exclusively on capital expenditure for facilities.
Key changes for 2026:
Budget expansion: KRW 120 billion, an 18% increase year-on-yearHigher cap per company: Up to KRW 300 million (previously KRW 200M)Differentiated co-payment ratios: 30% for small enterprises, 40% for medium (vs. flat 50% before)Two application tracks: GHG diagnosis track + facility installation trackNew ESG certification bonus points: +5 points for K-ESG or ISO 14064 holdersFor SMEs below the K-ETS threshold (less than 125,000 tCO2e annual emissions), this is virtually the only public funding channel for ESG transition without entry barriers, making it strategically valuable for manufacturing SMEs facing urgent decarbonization pressure.
Eligibility and Eligible Facilities
Eligibility Criteria
Industry: Manufacturing (C-code) primarily, plus selected services (data centers, logistics)Size: SMEs as defined under the SME Framework ActFinancials: Debt-to-equity ratio under 500%, prior-year revenue of KRW 1B+ recommendedHistory: No prior award from the same program within 5 yearsEligible Facility Categories
| Category | Example Equipment |
|----------|-------------------|
| Fuel switching | LNG/electric boilers, hydrogen co-firing burners |
| Waste heat recovery | WHRB, heat exchangers, ORC systems |
| Electrification | Inverter motors, high-efficiency pumps, electric furnaces |
| Process efficiency | Compressed air optimization, IoT-based FEMS |
| Renewables | Self-consumption rooftop solar (partial subsidy) |
Diagnosis Track vs. Facility Track
Diagnosis Track: For companies without a GHG audit report → audit + consulting + small-scale equipment (under KRW 50M)Facility Track: For those with an existing report → full-scale investment (up to KRW 300M)A two-step strategy—starting with the diagnosis track and progressing to the facility track the following year—has historically delivered the highest selection rates.
Application Process and Timeline
Annual Schedule (Estimated)
Feb–Mar: Public announcement (KOSME)Mar–Apr: Online application (SIMS portal)May: Document review → June on-site verification → July final selectionAug–Dec: Equipment ordering, installation, settlementRequired Documents
Business registration certificate, tax compliance certificatesGHG diagnosis report (issued by KEA or designated audit institutions)At least two equipment supplier quotationsFinancial statements (past 3 years)Business plan and emissions reduction calculation sheetBonus Points
ESG certifications (K-ESG, ISO 14064-1): +5 ptsGreen Company / Green New Deal designation: +3 ptsFamily-friendly / talent development certification: +2 ptsKey Points for Drafting the Business Plan
Reduction Target Calculation
Use Scope 1 (direct) + Scope 2 (indirect, electricity) as the basis. Quantify reductions with this formula:
Annual reduction (tCO2e) = (baseline energy use - post-installation use) × emission factorSource: Latest National GHG Inventory (Ministry of Environment)Investment Impact Quantification
Fuel switching: Bunker-C oil → LNG boiler ≈ 27% CO2 reductionPayback period: Within 3 years scores bestReduction-per-investment: tCO2e per KRW 100M is a key competitive metricDifferentiation from the Reviewer's Perspective
Empirical evidence: Use measured data (electricity meters, fuel invoices), not estimatesPost-installation plan: Specify a 5-year MRV (monitoring, reporting, verification) frameworkStrategic alignment: Link to broader ESG initiatives—K-ESG audits, RE100, supply-chain due diligenceLeveraging KITIM Consulting
KITIM offers end-to-end support: diagnosis → design → application → post-award management.
GHG diagnosis report issuance through certified audit partnersEquipment specification review and supplier quotation negotiationBusiness plan refinement and mock evaluation by former review committee membersPost-selection settlement and MRV reporting on your behalfOver the past three years, KITIM has secured 45 awards totaling KRW 7.8 billion in carbon neutrality facility funding. If you are preparing a 2026 application, request a free preliminary assessment via our [contact page](/contact). We will deliver a tailored application strategy aligned with your industry and current facility profile.
