Korean Market: Growing anxiety among compliance entities (October 2017)


The Korea ETS is now trading on the last year of its first phase. The second trading year (2016) closed last June 2017 with a total certified emission of 554.3 million tons and emission reserve of 9.3 million tons. The third implementation year (2017) which started in July 2017 has an allocation of 566.5 million tons and just like the first two trading years, the market trend will see entities banking their permits due to future uncertainties such as the Phase II allocation plan and carbon price. The Korean government has also introduced market stabilization measures targeting a stricter banking and borrowing rules to increase the market’s liquidity but the delay in the announcement of the Phase II allowance allocation caused uncertainties within the entities resulting in dwindling volumes and continuous price increases...