SEOUL, June 3 (Reuters) - South Korea's tax on coal imports for power generation will start in July and duty on some alternative fuels will be cut, the government said on Tuesday.
The planned tax on coal, broadly announced in November, is expected to push up electricity costs, prompting consumers to curb power use as Asia's fourth-largest economy battles to avoid blackouts during peak demand in winter and summer.
The country's five utilities, fully owned by state-run Korea Electric Power Corp (KEPCO), import around 21-22 million tonnes of coal per quarter, according to industry data.
The tax on coal was in line with market expectations, with the finance ministry saying in a statement that a rate of 19 Korean won ($0.02) would be imposed per kilogram (kg) of coal with a minimum 5,000 kcal of net calorific value (NCV). For coal below 5,000 kcal/kg NCV, the rate will be 17 won per kg.
To boost demand for alternative fuels for electricity-generation, the government will lower taxes from July on liquefied natural gas (LNG) to 42 won per kg from 60 won, propane to 14 won per kg from 20 won and kerosene to 72 won per liter from 104 won. Those cuts were also in line with expectations.
The country last week announced plans to impose tough caps on CO2 emissions from utilities and industry as part of a carbon trading scheme that will be the world's second biggest when it opens at the start of next year. ($1 = 1024.0000 South Korean Won)
(Reporting by Meeyoung Cho; Editing by Joseph Radford)