The government will provide more than 38 trillion won, or around 29 billion U.S. dollars, in policy financing for the secondary battery industry over the next five years.

The plan was discussed on Wednesday at an emergency economy ministers' meeting presided over by finance minister Choo Kyung-ho to discuss ways to boost competitiveness in the industry.

The government will expand loans, guarantees and insurance for businesses in the sector in order to stabilize supply chains, while offering interest and insurance premium cuts for facility investment in response to the U.S. Inflation Reduction Act.

Seoul will also push to create a one trillion-won fund for cutting-edge strategic industries by the year's end, with a total of 73-point-six billion won to be injected into research and development next year, including a project on next-generation secondary battery technological development.

In a bid to reduce reliance on key minerals from overseas used in secondary battery production, the government will push to vitalize an industrial ecosystem that fosters the recycling of eligible used batteries into products rather than being discarded as waste.

As part of efforts to stabilize the supply chains of key minerals, Seoul will expand stockpiles, such as an additional 24 days’-worth of lithium, and spend over 250 billion won next year to support mineral refining and smelting.