May 2019: Korean Market Update


Korean Market Update

Market Update

After the submission of emissions statements and companies confirming their short positions, buying orders doubled driving prices upwards. KAU18 prices broke the first phase's peak price of KRW 28,000 in April 25 with prices closing at KRW 28,900 further climbing to KRW 29,000 and finally to a record high of KRW 29,300 on May 9. 

Korea Emission Trading Scheme

ETS Monthly Auction

Seven companies won a total of 1,000,000 tons at the price of KRW 27,850, 4.6% below the secondary market price but comparably higher than previous auction winning prices. The lowest submitted bid price was KRW 27,150 and the highest was KRW 30,450. 

Policy Developments

Market Maker System - the system is scheduled to start operations on June 10, 2019 with two financials - Korea Development Bank, Industrial Bank of Korea - officially given access to the market formation reserve.

Third Green Growth Plan - the government has finalized the third green growth plan that includes three major initiatives, five major policy directions and 20 major tasks based on three strategies: responsible reduction of greenhouse gases and sustainable energy conversion, fostering innovative technology industries, and strengthening global green cooperation. 



Banking restrictions - proposed changes to the allocation plan including carry-over restrictions are undergoing talks. According to the plan, an entity's carry-over limitations will be calculated in proportion to the net amount of allowances that an entity sells for the entire duration of an implementation year. Details of the proposed plan will be finalized and published by the Ministry of Environment by the end of the month.



[published: 2019-May-23]