[2027 Budget Proposal] Government to Pioneer the Arctic Route, Expand Oil Reserves... 2.5 Trillion Won Investment in Supply Chain Stabilization

2027 Budget Plan

200 Billion Won for Pilot Operations on the Arctic Route and Related Industry Development

Establishing a 1.4 Trillion Won Resource Security Fund to Secure Crude Oil and Critical Minerals

The government has decided to invest 200 billion won in next year's budget to foster businesses related to the Arctic route, such as pioneering new shipping lanes to respond to geopolitical risks, supporting the construction of eco-friendly ships, and building icebreakers and ice-class vessels. In addition, to strengthen the ability to respond to oil supply crises, it will increase strategic oil stockpiles and expand investment in overseas supply chains to prepare for crises related to critical minerals.

On September 1, the Ministry of Economy and Finance announced the "2027 budget proposal," which includes these initiatives. The government plans to more than quadruple the budget for economic security and supply chain stabilization to 2.5 trillion won, from this year's 600 billion won.

On the 22nd of last month, the Panstar Akro became the first domestic container ship to undertake a pilot voyage through the Arctic route.

◆200 billion won for Arctic Route Development and Related Industries= First, the government will increase the budget for pilot Arctic shipping and related industry development from 100 billion won this year to 200 billion won next year. This will support pilot voyages on the Arctic route, as well as the construction of 11 eco-friendly ships and 2 icebreakers or ice-class vessels.

For related industry development, an ecosystem will be created encompassing policy, technology, workforce, and overseas expansion. Through fostering strategies such as establishing international cooperation governance, launching an Arctic route development plan, and preparing a technology roadmap, the government will carry out two demonstration projects: one for testing polar ocean environments and another for underwater mobility in polar regions. To nurture talent for pioneering the Arctic route, the government plans to train 1,000 polar maritime officers and support 40 marine equipment companies in entering overseas markets.

◆Establishment of ‘Resource Security Fund’ to Secure Crude Oil and Key Minerals= The budget for securing crude oil and critical minerals will sharply increase from 400 billion won this year to 2.1 trillion won next year. To bolster oil supply crisis response, 56.8 billion won will be used to expand new storage facilities with a capacity of 20 million barrels, and 200 billion won will be allocated to increase strategic reserves by 2 million barrels. To diversify sources of oil other than the Middle East, the government will support investments in advanced refining facilities and launch a new process technology development project.

Oil storage facility of Korea National Oil Corporation.

In addition, 93.4 billion won will be invested to secure critical minerals such as rare earth elements, which are essential raw materials for advanced industries. To encourage facility investment and reach a 20% recycling rate by 2030, 10.6 billion won will be allocated. In particular, a new 'Resource Security Fund' worth 1.4 trillion won will be established to address ongoing supply chain crises and secure long-term investment in critical resource security sectors.

The government will also strengthen local investment. With an investment of 200 billion won, it will support the acquisition of local stakes and the establishment of new overseas entities (including both independent and joint ventures) to reinforce overseas supply chain investment in response to potential crises. The aim is to build overseas production capacity for key items that lack competitive production costs domestically or face regulatory obstacles, enabling effective use during times of supply chain crisis.

◆ODA to Be Pursued Strategically… Overseas Diplomatic Missions to Serve as Forward Bases for Overseas Expansion= The government plans to spread the "K-Initiative" by implementing practical foreign policy and pursuing strategic official development assistance (ODA) with national interests given top priority.

First, the government will expand strategic projects in core fields such as artificial intelligence (AI), culture, and technology (a total of 198 projects with a total budget of 900 billion won) to proactively support the spread of the K-Initiative and the overseas expansion of Korean enterprises. In particular, an investment of 400 billion won will be made to actively support follow-up measures in Ukraine, India, and Vietnam after bilateral summits, as well as to promote related projects such as supply chain security.

The government plans to use overseas diplomatic missions as forward bases for global expansion. The related budget will be increased from 77.8 billion won to 117.7 billion won to actively support the overseas expansion of strategic businesses such as K-defense, culture, and AI. In addition, 50 billion won will be allocated to prevent accidents involving Korean nationals abroad and establish a rapid response system.

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