South Korea caved in to pressure from car industry bosses yesterday and slammed the brakes on a proposed tax on vehicle carbon emissions.

Government officials said it would delay the tax by over five years until the end of 2020 amid lobbying from domestic and US car manufacturers who feared that the levy would curb sales.

The so-called smog tax had already been postponed by more than two years when the further delay was announced.

Finance Minister Choi Kyung Hwan claimed that its introduction would place too much of a burden on industry if it was launched at the same time as a pending carbon trading scheme.

Mr Choi added that he was also looking into measures to ease the effect on industry of the carbon-permit trading scheme itself, the centrepiece of government efforts to curb greenhouse gas emissions.

He said the government was now considering cutting the required reduction in emissions rates.

The delayed rollout had been widely expected since the industry has been campaigning very publicly, insisting that the levy could slash domestic sales by up to 10 per cent at the country’s largest carmaker Hyundai.

Car-makers unsurprisingly welcomed the delay, while at the same time claiming they would work hard to reduce greenhouse gas emissions from their industry.

But South Korea’s avaricious bosses were still not completely satisfied by the raft of ministerial concessions.

The Korea Chamber of Commerce and Industry claimed that it understood the need for the carbon trading scheme, but cautioned that the programme would have to be adjusted to fit with the needs of big business.

“Adequate measures need to be taken before implementation to minimise the burden on the global competitiveness of South Korean industry,” it said.

South Korea is one of the world’s 10 worst environmental polluters.