[Issue] Participating in Carbon Neutrality Research Leads to a "30 Billion Won Bomb"... A South Jeolla SME's Tearful Plea

Joint Research Project Launched Under Moon Jae-in Administration
First Attempt at Installing 80m Fixed Marine Structure and 2,000m Drilling
Korea Institute of Energy Technology Evaluation and Planning Rules "Insincere Failure"
Company Says,

On-site view of the research project to secure a large-scale CO₂ underground storage reservoir through deep-sea exploration and drilling. Provided by the company

A small to mid-sized company based in South Jeolla Province, which has grown over the past 30 years primarily by installing metal structures, now faces the prospect of having to pay hundreds of billions of won after participating in a national research and development (R&D) project. The research project was suspended and deemed “irresponsibly discontinued,” with the lead research institution passing the related costs onto a subcontractor, escalating the conflict into a legal dispute.

According to Company A, the Moon Jae-in administration launched a “National Research Project for Carbon Neutrality Reduction” in 2019 as part of the 3rd Green Growth Five-Year Plan (2019–2023), involving multiple ministries (the Ministry of Trade, Industry and Energy; Ministry of Oceans and Fisheries; Korea Institute of Geoscience and Mineral Resources; Korea National Oil Corporation; Korea Institute of Energy Technology Evaluation and Planning, among others).

The overall project consisted of five main components: ▲ securing a large-scale CO₂ underground storage reservoir through deep-sea exploratory drilling (Subproject 1); ▲ developing an integrated demonstration model for mid-scale CCS using the East Sea Gas Field (Subproject 2); ▲ developing large-scale CO₂ capture technology, evaluating capture sources, and designing a 150MW-class capture plant FEED (Subproject 3); ▲ demonstrating mineral carbonation technology using desulfurization residue and developing greenhouse gas reduction methodologies (Subproject 4); and ▲ establishing an institutional foundation, including legal reforms and social acceptance for CCUS (Subproject 5).

Company A signed a subcontract with research institution G, which had effectively planned the research project, and participated in Subproject 1, “deep-sea marine exploratory drilling.” The project period was from April 2021 to December 2023, with a total budget of approximately 22 billion won (based on domestic standards). Company A was mainly responsible for the fabrication and installation of marine structures such as jackets and decks used for seabed drilling operations.

The core objective of Subproject 1 was to verify whether atmospheric carbon dioxide could be stored in geological formations beneath the ocean floor.

To achieve this, Company A and research institution G planned and implemented the installation of a fixed marine structure at a deep-sea location about 180 kilometers off the coast from Gunsan, with a water depth of 80 meters, and drilling exploratory wells up to a maximum depth of 2,000 meters.

The company explained that, given the near absence of previous attempts at offshore carbon dioxide storage in Korea, this work was practically the first of its kind in the country.

Initially, the government reportedly estimated that drilling each well would cost about 50 billion won. However, after a technical review, Company A determined that it could execute the project at approximately 10 billion won per well and decided to participate based on this plan.

The situation changed drastically after the inauguration of the Yoon Suk-yeol administration. About a year after taking office, beginning in late June 2023, the government launched a comprehensive review and budget restructuring of R&D projects, advocating for the eradication of “R&D cartels.”

On August 25, 2023, a special evaluation committee led by the Korea Institute of Energy Technology Evaluation and Planning decided to halt the research project. Later, on November 1 of the same year, the institute delivered a final decision of “irresponsible discontinuation,” citing reasons such as project delays, the absence of on-site supervision, uncertainty over safety, and poor performance due to a lack of expertise.

Although not specifically identified, Company A explained that the issue of responsibility appears to have been raised in connection with an accident in May 2023, when part of the structure collapsed during the installation of the drilling platform due to structural imbalance.

The controversy has centered on whether a single incident can justify a judgment of “irresponsible discontinuation.” Company A claims that the project had progressed more than 90%, and it remains unclear whether the accident was a decisive factor that undermined the project’s fundamental objectives. Moreover, Company A reportedly was not even given the opportunity to explain the background of the project delay and the cause of the accident during the review process.

Typically, R&D projects are classified as either “responsibly discontinued” or “irresponsibly discontinued.” If a project is deemed “irresponsibly discontinued,” all research funds previously provided must be returned.

The objective of national R&D projects is to discover new technologies, knowledge, or technological principles and to demonstrate them. Success is not guaranteed, and there is often a high possibility of failure. For this reason, unless there is a particularly serious or illegal wrongdoing, it is rare for a project that has reached a certain stage to be classified as “irresponsibly discontinued,” according to industry sources.

This has led to speculation that the government’s R&D restructuring policy at the time influenced the outcome.

As a result, responsibility and financial burdens have now been shifted to the participating institutions and companies.

The government, including the Ministry of Trade, Industry and Energy, has ordered research institution G to return all research funds. In response, institution G claims the accident was the reason for the project’s failure and has re-billed Company A, their subcontractor, for the costs.

According to Company A, the total amount demanded by institution G, including various detailed costs as well as the project budget, reaches approximately 30 billion won.

Company A is strongly opposing this demand.

A representative from Company A stated, “Given the nature of R&D, the possibility of failure always exists, and enhancing quality through technical improvements is the essence of R&D. At the time, the project had reached about 95% completion.”

The representative continued, “It is true that an accident occurred, but since this was the first attempt in Korea, technical corrections and improvements were fully possible. Even after the accident, efforts and work continued to enhance the project’s quality.”

They added, “Even Naroho succeeded only after multiple failures. Branding the research project as an ‘irresponsible failure’ seems to be a judgment made only with the government’s R&D restructuring policy in mind at the time.”

Research institution G is currently pursuing a civil lawsuit against Company A for responsibility over the project’s failure.

Meanwhile, regarding this matter, the Korea Institute of Energy Technology Evaluation and Planning, which conducted the evaluation, stated that the suspension was decided through a special evaluation based on the National Research and Development Innovation Act.

This content was produced with the assistance of AI translation services.