The proposed introduction of a low-carbon vehicle cooperation fund could cause a surge in car prices and would not help lower the amount of greenhouse gases being released into the atmosphere, a report by the lobbying group for South Korea’s largest businesses said Monday.

The report by the Federation of Korean Industries claimed the average price of cars sold in the country will rise by between 520,000 won ($510) and 2.43 million won in 2020, compared to 2015, when Seoul wants to implement the system.

While both domestic and imported cars are expected to be affected, South Korean brands mostly making gasoline-driven cars will be hit the hardest, the report said. South Korean carmakers may face a minimum of 415.2 billion won in their combined earning losses in 2020.

“Because surcharges slapped on European diesel cars will be less than those levied on local petrol-driven vehicles, the former will effectively get a boost in price competitiveness vis-a-vis their South Korean rivals, which is tantamount to artificial distortion of the market,” according to findings based on a Korea Environment Institute report. (Yonhap)