KOREA ETS
The Korea Emission Trading Scheme (K-ETS) began in January 2015 making the Republic of Korea the second nation in Asia to introduce a nationwide cap-and-trade program. The scheme covers more than 70% of the national emissions and is one of the South Korean government’s main tool in meeting the GHG emissions reduction target of 40% by 2030, as well as the goal of being carbon neutral by 2050.
Overview
| TRADING PERIOD | Phase 1 (2015 – 2017), Phase 2 (2018 – 2020), Phase 3 (2021 – 2025) |
|---|---|
| CAP AND TRAJECTORY |
3,082Mt (incl. 180Mt of market reserves) in Phase 3 For Phase 4, refer to the Ministry of Environment |
| GHG COVERED | CO2, CH4, N2O, HFCs, PFCs, SF6 |
| SECTORS | Energy, industry, building, domestic transport (aviation, land, maritime) waste, public |
| THRESHOLD | Company (corporation) > 125,000 tCO2/yr or installation (site) > 25,000 tCO2/yr |
| LIABLE ENTITIES | 700+ entities |
| EMISSIONS COVERAGE | 73.5% |
| ALLOCATION |
90% free allocation, 10% auctioning (Phase 3) (100% free allocation in Phase 1, 97% free allocation in Phase 2) |
| FLEXIBILITY MECHANISMS | Offset*, Banking, Borrowing |
| MARKET STABILIZATION MEASURE | Market Stabilization, New Entrants, Market Making |
| PENALTY |
Three(3) times the average market price of allowance of the given compliance year, not exceeding KRW 100,000/ton |
* Note: K-ETS allows the use of offset credits for up to 5% of the compliance obligations (as of Phase 3)
Marketdata
| Market Price Information | Link to KRX (Korea Exchange) - CLICK |
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