Seven new regulatory-free and global innovation zones designated across South Gyeongsang, North Gyeongsang, Ulsan and North Jeolla provinces in biotech, mobility and climate tech sectors
The Ministry of SMEs and Startups said Thursday it is moving to designate new regulatory-free zones in South Gyeongsang, North Gyeongsang, Ulsan and North Jeolla provinces.
The ministry convened the 25th Regulatory-Free Zone Special Regulatory Review Committee that day, advancing the designation process for new regulatory-free zones and global innovation regulatory-free zones this year.
Under the plan, South Gyeongsang Province will pilot bidirectional power generation — converting electricity to hydrogen and hydrogen back to electricity. North Gyeongsang Province will be permitted to cultivate and use cannabis for medical product development, which is currently restricted. Ulsan will be allowed to recycle high-purity oil extracted from industrial plastic waste as a petroleum substitute fuel. North Jeolla Province will expand the range of products eligible for clinical trials on companion animals and streamline toxicity testing procedures.
Three global innovation zones are also being designated — two in North Gyeongsang Province and one in South Jeolla Province. North Gyeongsang will partner with institutions including Crimson University in the United States to pilot low-speed vehicle road operations, which are not permitted domestically. The province will also work with Nordic demonstration bodies, including those in Iceland, to pilot the conversion of small fishing vessels into electric ships. South Jeolla Province plans to jointly pilot three-wheeled electric motorcycles for special purposes — including refrigeration and cleaning — in both South Korea and Southeast Asia.
Regulatory-free zones are a form of regulatory sandbox that grants special exemptions such as expedited regulatory confirmation, demonstration exceptions and provisional permits. The ministry introduced the regulatory-free zone system in 2019 and has since designated 49 such zones nationwide, granting a total of 136 regulatory exemptions. As of last month, 62 laws and regulations had been revised as a result of demonstrations conducted within the zones, with the program also drawing investment and encouraging companies to relocate outside the Greater Seoul area.
The ministry said it intends to use regulatory-free zones to expand demonstration opportunities in new technology and emerging industries, and to develop regions into hubs for innovative industries. The program also aims to decentralize research and development and investment functions concentrated in the Greater Seoul area, building a foundation for region-led growth. More recently, the ministry has been expanding global innovation zones linked to overseas demonstrations to help domestic companies enter foreign markets.
One example is the North Gyeongsang Battery Recycling Regulatory-Free Zone, designated in 2019, which was the first in South Korea to permit the reuse and recycling of used electric vehicle batteries. Through the program, EcoPro — one of the participating companies — leveraged the technology and experience gained during the demonstration process to establish itself as a battery supply chain company and expand into global markets. The ministry said participating companies, including EcoPro, have generated cumulative sales of 600 billion won (about $396 million), created 800 new jobs and attracted 250 billion won in investment.
Minister of SMEs and Startups Han Seong-bu said the ministry would "pursue bold regulatory reforms in advanced industries such as biotech and climate tech, and continue to upgrade the regulatory-free zone system on behalf of small and venture businesses so that these efforts translate into smarter regulation."
boo@heraldcorp.com
