What Is an Integrated Environmental Permit? An Explanation of the Expansion to Seven Industries Including Automotive and Secondary Batteries 

The automotive and secondary battery manufacturing industries are newly falling under the scope of 'integrated environmental permits.' On August 23, the Ministry of Climate, Energy and Environment announced its legislative notice plan for amendments to the Enforcement Decree and Enforcement Rule of the 'Act on the Integrated Management of Environmental Pollution Facilities' (hereinafter the Environmental Pollution Facilities Act) containing these measures. The legislative notice period runs from August 26 to October 6.

It is important to note that these are not yet finalized regulations. The legislative notice is a procedure through which the government releases draft amendments to subordinate statutes and gathers opinions from industry and the public. Final confirmation requires regulatory review, review by the Ministry of Government Legislation, and a decision by the Cabinet meeting. However, given that the implementation timelines presented in the amendment are 2028 and 2029, the preparation clock has already started ticking for companies in the affected sectors.

From the perspective of an ESG practitioner, this system can easily feel unfamiliar. Unlike carbon or disclosures, "environmental permits" have traditionally been classified as the domain of a factory's environmental safety team. However, the integrated environmental permit is a system by which the government officially documents the total amount and management level of pollutants emitted by a business site. This means that a significant portion of permit condition compliance, the operation of emission and prevention facilities, and measurement and post-management information will be managed around this permit document and annual reports. As disclosures and supply chain due diligence are strengthened, the weight of this document increases.

What Is an Integrated Environmental Permit: Combining 10 Permits into 1

The integrated environmental permit is a system that consolidates individual environmental permits that a business site previously had to obtain separately into a single process. In the past, installation permits for air emission facilities had to be obtained under the Clean Air Conservation Act, permits for wastewater discharge facilities under the Water Environment Conservation Act, and reports on waste treatment facilities under the Waste Management Act. Because the underlying laws differed, the documentation requirements and responsible agencies also varied.

Under the integrated environmental permit, up to 10 individual permit procedures required by seven laws can be processed at once. In terms of documentation, up to 73 types of applications are replaced by a single 'Integrated Environmental Management Plan.' Operators submit this plan—which includes installation and operation plans for emission and prevention facilities, emission impact analyses, and post-monitoring and maintenance plans—to the Minister of Environment. The permitting window has also been centralized under the central government, shifting away from the previously scattered local governments, river basin offices, and regional environmental offices.

However, understanding the essence of this system merely as 'document simplification' captures only half the picture. Whereas previous media-specific permits evaluated whether a single smokestack or wastewater discharge outlet met statutory standards, the integrated environmental permit comprehensively assesses the impact of the entire business site on the surrounding environment. It analyzes how much additional load emitted pollutants place on nearby air and water quality, and based on those results, establishes 'permitted emission standards' applied exclusively to that business site. The core point is that these are custom standards tailored to each business site rather than uniform standards across the country.

The basis for determining these standards is Best Available Techniques (BAT). BAT refers to a bundle of management techniques that can effectively reduce pollutants while remaining technically and economically applicable in the field. Rather than unconditionally enforcing the highest-performing technology, this approach seeks a level that works in reality by weighing environmental improvement effects, applicability, and costs together. BAT reference documents are drafted for each industry by Technical Working Groups (TWGs) comprising participants from industry, academia, and the government.

Who Is Subject: The 'Dual Conditions' of Industry and Emission Scale

To be subject to the integrated environmental permit, two conditions must be met simultaneously. First, the business must belong to the target industries designated by the enforcement decree. Second, its emission scale must exceed certain thresholds, classifying it as a Class 1 or Class 2 business site for air or water quality. Specifically, this applies to business sites where annual generation of air pollutants is 20 tons or more, or where daily wastewater discharge is 700 cubic meters or more.

Therefore, even when an industry is newly added, not all small-scale factories automatically fall under the scope. Even within the automotive manufacturing sector, if emission scales fail to meet the thresholds, the business remains subject to the existing media-specific permit system. The first thing a company must check is not whether "our industry is included," but whether "our business site falls under Class 1 or Class 2."

The system was implemented in 2017. Beginning with the power generation, steam, and incineration sectors, its scope was gradually expanded to include steel, non-ferrous metals, petrochemicals, oil refining, paper manufacturing, electronics, semiconductors, and automotive parts. The Ministry of Environment announced that on December 30, 2024, with Samsung Electronics' Pyeongtaek Campus and SK Hynix's Cheongju Plant 4, it completed integrated permitting for 1,306 business sites across 19 industries that had been sequentially pursued since 2017.

It is worth noting, however, that the number of target industries varies depending on the classification and aggregation unit used. The government's existing guides on the integrated environmental management system generally use an integrated classification of 19 industries. Conversely, reports related to the recent amendment feature different figures reflecting detailed Korean Standard Industrial Classifications (KSIC). Some media outlets reported an increase from 22 to 29 industries, while others reported an increase from 27 to 34 industries. None of these figures are incorrect; they simply rely on different industrial classification criteria. When citing figures in articles or internal reports, it is safer to clarify which classification standard is being referenced.

Core of the Amendment ①: Seven Industries Newly Incorporated

The industries newly included in the scope of the latest amendment are automotive manufacturing, secondary battery manufacturing, non-alcoholic beverage manufacturing, fats and dairy product manufacturing, other food manufacturing, flat glass manufacturing, and rubber product manufacturing. The official statutory industry names are more detailed. For instance, automotive manufacturing is listed as 'motor vehicle engine and motor vehicle manufacturing,' secondary battery manufacturing as 'primary cell and accumulator manufacturing,' non-alcoholic beverage manufacturing as 'soft drink and ice manufacturing,' and fats and dairy product manufacturing as 'animal and vegetable fat and dairy product manufacturing.' For readability, this article abbreviates these as 'automotive manufacturing' and 'secondary battery manufacturing.'

The implementation timeline is divided into two tracks. Three food-related industries—non-alcoholic beverages, fats and dairy products, and other foods—will apply starting in January 2028, while four industries—automobiles, secondary batteries, flat glass, and rubber products—will apply starting in January 2029. This design accounts for both industry preparation periods and the development schedules for industry-specific BAT reference documents.

Existing business sites are granted a four-year permit grace period from the effective date. Industries subject in 2028 must obtain integrated permits by 2032, and those subject in 2029 by 2033. Conversely, new business sites are immediately subject to the integrated permit system from the effective date of their respective industry, distinguishing them from the four-year grace period granted to existing facilities. However, since 'new establishment' and 'expansion' may be treated differently under the law, businesses planning expansions or major process modifications must separately verify the application timing and modified permit requirements. The grace period for existing sites should not be mechanically assumed.

The number of newly incorporated business sites is reported to be 183 in total—96 for the three industries applying in 2028 and 87 for the four industries applying in 2029. These figures are based on reports citing ministerial data and are subject to change upon final confirmation depending on the results of public comments gathered during the legislative notice period.

Why Automobiles and Secondary Batteries?

An interesting point is that both newly incorporated sectors have traditionally been classified as 'eco-friendly industries.' Electric vehicles and batteries are products that reduce carbon emissions during their use phase. However, their manufacturing processes differ. Volatile organic compounds (VOCs) generated during the painting process, solvents and chemicals used in the electrode process, and the management of process wastewater and waste all present environmental issues with high management difficulty.

This suggests that the recognition that a product's eco-friendliness and a manufacturing process's environmental performance are distinct has been reflected in the system. This also aligns with international trends. The EU has long operated a plant-level integrated permitting system through its Industrial Emissions Directive (IED), and South Korea's integrated environmental permit was also designed with reference to this model. As product carbon footprints and supply chain due diligence demands intensify, 'in what kind of factory and under what management system a product was made' becomes a variable of export competitiveness.

Kim Jin-shik, Director General for Air Quality Policy at the Ministry of Climate, Energy and Environment, explained that the scope of integrated permits has been expanded rationally to reflect changes in industrial structure and pollutant emission characteristics. The intent is to broaden the management network, which has centered on traditional heavy-emission manufacturing, toward future industries.

Core of the Amendment ②: Three Mechanisms Differentiating Regulations

The latest amendment expands the scope while simultaneously including measures to alleviate burdens. Rather than increasing the total regulatory volume, the direction is to adjust intensity based on performance and risk.

First, the regular inspection cycle for exemplary business sites is extended. If an integrated permit agency verifies compliance with permitted emission standards and permit conditions internally and includes this in an annual report, and the business site is recognized for excellence in an environmental office evaluation, its regular inspection cycle—currently one to three years—can be extended up to five years. This design reduces administrative burdens for business sites with high environmental management levels while concentrating administrative resources on high-risk sites.

Second, requirements for appointing integrated environmental managers at SMEs are eased. Business sites with fewer than 50 regular employees can appoint an integrated environmental manager without meeting separate qualification requirements, provided the individual has eight or more years of work experience in the environmental field and completes integrated environmental management training. Furthermore, even after SMEs grow into mid-sized enterprises, the previous SME criteria will continue to apply for one year, mitigating the so-called 'regulatory cliff.'

Third, excess emission charges for the power generation sector are reduced or exempted. When an integrated-permitted power generation business temporarily exceeds permitted emission standards due to sudden shutdowns or restarts of power generation facilities mandated by grid operators' dispatch instructions, related charges can be reduced or exempted. This is interpreted as a measure reflecting the reality that thermal power generation facilities are started and stopped more frequently as the share of renewable energy grows. In line with the deletion of criminal punishments for violations of emission and prevention facility management standards, administrative dispositions are also arranged to be applied differentially according to the degree of violation.

Core of the Amendment ③: Strengthening Agency Responsibilities

Relief comes with a price. While allowing integrated permit agencies to draft annual reports on behalf of business sites, the amendment significantly strengthens the requirements and responsibilities for agency providers.

Agency providers must secure at least two additional personnel dedicated to report drafting, on top of the existing technical personnel required for registration. If they draft fraudulent reports, they face a six-month business suspension for a first violation and registration revocation for a second violation. Even in cases of shoddy drafting, penalties ranging from warnings to business suspensions and registration revocations can be applied depending on the number of violations.

A point easily overlooked by companies is that ultimate responsibility remains with them. Agency services are merely mechanisms to support report drafting; they do not mean that operators can fully transfer management responsibility for permit condition compliance and plant operation to external parties. Contractual roles, verification procedures, and data submission responsibilities need to be specified in detail. This is also a point ESG practitioners must check when reviewing outsourcing contracts.

What Companies Must Actually Do

Preparing for an integrated permit typically proceeds in four stages.

The first stage is determining eligibility. Companies verify their business site's industry code and air/water classification to determine whether they fall within the scope. For companies operating multiple plants, results may vary by business site.

The second stage is status diagnosis. Lists of emission and prevention facilities, pollutant generation and emission volumes, raw material and energy consumption, and waste treatment statuses are organized at the process level. Through this process, discrepancies between existing permit contents and actual operating conditions frequently come to light.

The third stage is drafting the Integrated Environmental Management Plan. This incorporates process descriptions, BAT application methods, emission impact analyses, environmental accident response systems, and post-management plans. Given the substantial volume and difficulty, most companies enlist support from external specialized institutions.

The fourth stage is post-management following permit acquisition. Annual reports must be submitted every year, and permit conditions and permitted emission standards are reviewed periodically at set intervals. This means the permit is not a one-off procedure; standards are updated to reflect technological advances and changing environmental conditions.

The burden of costs and manpower is by no means light. Drafting the plan alone typically takes several months, often followed by measurements and modeling for emission impact analyses and investments to supplement prevention facilities. Although time remains until implementation in 2028–2029, considering that facility reviews can only begin in earnest after BAT reference documents are finalized, the practical preparation period is shorter than it appears.

The System's 8 Years in Numbers

What has been the impact of the system? According to an analysis of operational performance for the integrated environmental management system commissioned by the Ministry of Environment from Samil PwC in 2024, comparing the periods before and after system introduction based on responding business sites, particulate matter emissions decreased by 2,546 tons (35.3%) across 377 business sites, nitrogen oxides by 65,415 tons (32.4%) across 308 business sites, and sulfur oxides by 118,821 tons (15.8%) across 204 business sites.

However, these figures are based solely on business sites that responded to the survey, and it is difficult to attribute all reductions solely to the integrated permit system. This is because other policies, such as the seasonal fine dust management system, the Air Management Area Act, and the total pollutant load management system, operated concurrently during the same period. Citing these figures accurately requires disclosing both sample sizes and analytical units.

Why ESG Practitioners Must Understand This System

First, its connection to disclosures. Permitted emission standards by business site, actual emissions data, and annual report data serve as primary materials explaining environmental performance. In an environment where demands for sustainability disclosures and external verification are intensifying, the existence of verifiable source data dictates disclosure quality. Integrated permit business sites hold a relative advantage in possessing standardized data.

Second, supply chain response. Finished car and battery companies are already being asked by global clients and regulators for environmental information regarding their manufacturing processes. When clients, financial institutions, and evaluation agencies request manufacturing process environmental management data, integrated permit documents and implementation performance records can serve as usable evidentiary materials. Conversely, histories of environmental law violations or failure to meet permit conditions risk being evaluated as risk factors in client evaluations and transaction reviews.

Third, risk management. Violations of environmental permits represent financial risks that can lead to administrative fines and suspension of operations. Because integrated permits consolidate management status across multiple media into a single document, a problem at any single point can impact the permit status of the entire business site. This implies that the ripple effect of management failures is wider.

Fourth, organizational design issues. Integrated permits are not solely the domain of environmental safety teams. Process data is handled by production departments, investment decisions by finance departments, and disclosures and external communications by ESG departments. If departmental data operates in silos, bottlenecks arise immediately at the plan-drafting stage.

Remaining Variables: What Is Fixed and What Is Not

Currently, established facts are limited. What is fixed is the procedural fact that the amendment underwent a legislative notice from August 26 to October 6, alongside the policy direction contained within it. Implementation timelines, grace periods, extensions to inspection cycles, and the severity of sanctions on agency providers are all based on the 'draft amendment' and remain subject to adjustment upon final promulgation.

The biggest variable is the development schedule for BAT reference documents. Specific permit standards for new industries are tied to the process of developing and finalizing industry-specific BAT reference documents. Only once these documents are finalized can the outlines of maximum and permitted emission standards be drawn, allowing companies to gauge the scale of facility investments. In industries experiencing rapid technological change, such as automobiles and secondary batteries, the speed at which reference documents are established and supplemented is expected to be the key to the system's settlement. Companies need to continuously monitor reference document establishment schedules.

The results of industry public consultations are another element to watch. Depending on opinions received during the legislative notice period, the scope of target industries or implementation timelines could still be adjusted. Practitioners would be well-advised to verify the comment submission channels available until October 6.

KBR Insight

Reading this amendment solely as an 'expansion of regulations' misses the core point. While the scope of target industries has certainly been expanded, inspection cycles are simultaneously differentiated by performance, and SME requirements have been made more realistic. The weight leans more toward altering how regulations are distributed rather than increasing their total volume.

For this design to function, two premises are necessary in our view. One is the reliability of excellence evaluations. In a structure where inspection cycles are extended up to five years based on self-inspections by agency providers, if evaluations become perfunctory, management vacuums directly translate into risks. Strengthening sanctions on agency providers appears to be a measure conscious of this point, but sanctions are merely ex-post mechanisms. The objectivity of evaluation criteria and verification procedures must be designed concurrently.

The other is support for preparation in new industries. Most business sites in the automotive and secondary battery sectors lack experience with integrated permits. Without support programs that link process diagnostics, plan drafting, and facility investment financing concurrently with BAT reference document development, permit applications and demand for specialized personnel are likely to concentrate into a single window as the grace period expiration nears.

What companies need right now is not reaction, but diagnosis. 2029 may seem distant, but verifying target status and organizing emission data by process is not premature even if started today. Particularly for companies operating multiple business sites, sorting out classification determinations by site will serve as the practical starting point.

Practical Checkpoints

1. Verify whether your business site falls under Class 1 or Class 2 for air and water quality. Inclusion in an industry category does not automatically trigger applicability.

2. If new establishment or expansion plans exist, separately check application timelines and modified permit requirements to reschedule. Do not mechanically assume existing site grace periods apply.

3. Inspect whether lists of process-specific emission and prevention facilities match actual operating conditions.

4. Monitor schedules for establishing and supplementing industry-specific BAT reference documents and review opportunities to participate in Technical Working Groups.

5. Confirm the procedures for submitting opinions during the legislative notice period running through October 6.

6. When reviewing agency contracts, explicitly specify roles, verification procedures, and data submission responsibilities within the contract.