The government will address carbon neutrality for small and medium-sized enterprises (SMEs) by promoting smart factories, including data-driven process innovation and replacement of high-efficiency equipment.

The Korea SMEs and Startups Agency (Chairman Kim Hak-do) announced on the 16th that it is recruiting small and medium-sized enterprises (SMEs) to participate in the carbon-neutral smart factory distribution project until April 5th.

The Carbon-Neutral Smart Factory Distribution Project is a project that helps companies in high-carbon emission industries establish low-carbon management systems by supporting energy efficiency and ICT-based carbon reduction process innovation.

The industries eligible for support are the top 10 high-carbon-emitting industries among small and medium-sized enterprises, such as food manufacturing, and 14 core technology industries, such as casting and welding. The target industries have been significantly expanded from 6 last year to 24.

The main support contents include: △Energy diagnosis and design consulting that measures and analyzes energy usage by process to suggest carbon reduction strategies; △Support for energy management and process innovation solutions (FEMS, MES, etc.) and related controllers, measuring instruments, and energy efficiency facilities; △Support for replacing utility facilities such as energy-intensive and aging facilities with high-efficiency facilities that are effective in reducing energy consumption.

There are two types of application methods: assignment-based and open-ended. You can choose the method that best suits your company's circumstances.

The designated project type is a method of applying by selecting a project (137 projects) that is appropriate for the company's current status from among the projects presented through an investigation of energy-intensive processes, and the free application type is a method of applying by freely writing a plan to build a carbon-neutral smart factory that is appropriate for the company's current status and production process.

The amount of support will be divided into 50 million won for Basic and Equivalent Levels and 200 million won for Advanced Level 1, depending on the participating companies' process intelligence goals. This year's budget totals 4 billion won. For simple equipment replacements and facility investments not linked to smart production methods, up to 10 billion won per company can be provided in the form of loans, linked to the Small and Medium Business Administration's SME policy funds (e.g., the Manufacturing Site Smartization Fund).

Companies that have completed similar tasks through the General Smart Factory Promotion Project can also apply for an additional round. Companies that received SME policy financing for facility installation will also receive interest rate reductions based on performance assessments in 2023.

For more information, please visit the Korea Small and Medium Business Administration website (kosmes.or.kr) or the Smart Manufacturing Innovation Promotion Group's Smart Factory 1st Street (1st.smart-factory.kr). Applications for business participation can be made at Smart Factory 1st Street.

Choi Hak-soo, head of the Innovation Growth Division at the Korea SMEs and Startups Agency, said, “Small and medium-sized enterprises (SMEs) agree on the need for carbon neutrality, but they cite the costs of process improvement and equipment introduction as obstacles.” He added, “We expect that the carbon-neutral smart factory distribution project will play a significant role as a catalyst to promote energy efficiency improvements and the transition to low-carbon management systems for SMEs.”