In January 2015, the South Korean government launched the Korea Emissions Trading Scheme (K-ETS). The K-ETS applies to six sectors (heat and power, industry, buildings, transportation, waste, public sector), in total covering 73.5% of South Korea’s national GHG emissions. The scheme covers the direct emissions of six greenhouse gases, and indirect emissions from electricity consumption.
Currently, South Korea is in the Third Allocation Phase of the K-ETS (2021-2025). The Korean government is required to adjust sectoral and annual emissions targets by March 2023, in order to reflect the updated 2030 NDC emissions reduction target passed in October of last year. In mid-August 2022, the Ministry of Environment (MoE) under the new Yoon Sok-yeol government created an Emissions Trading Advancement Council, including representatives from relevant ministries, companies and industry associations covered by the K-ETS, and non-governmental experts. ways to improve the K-ETS to stimulate carbon neutrality. The MoE announced that this Council would be used to gather opinions on reforms for System Improvement, Paid Allocations, and Emission Efficiency Standard Allocations.
On January 16th the Maeil Business Newspaper reported that the Vice Chairman of the Korea International Trade Association (KITA), Jung Man-ki, advocated for converting the allocation of paid emission permits to free emission permits under the Korea Emissions Trading System to “supplement the industrial competitiveness” of Korean exporting companies in response to the Inflation Reduction Act (IRA) of the US and the EU Carbon Border Adjustment Mechanism (CBAM).
At the November 3rd ‘Industry Conference on the EU Carbon Border Adjustment Mechanism (CBAM)’ hosted by the Ministry of Trade, Industry and Energy (MoTIE), the Korea Petrochemical Industry Association (KPIA) advocated for the Korean Emissions Trading System to be included in the EU CBAM, without a clear position on strengthening of carbon price within Korea.
On the 12th July, E-Daily News Korea reported that the Federation of Korean Industries (FKI) supported reforming the Korea Emissions Trading Scheme (K-ETS) to link it to international voluntary carbon markets, running contrary to the policy’s objective to increase carbon prices and reduce emissions within Korea.
In the December 2022 Steel Paper of the Korea Iron and Steel Association (KOSA), KOSA did not support reform of the K-ETS, such as expanding paid allocations in the 4th trading phase (2026-2030), advocating for the Korean steel industry’s exemption from paid allocation expansion during the 4th trading phase.
In a 25th October Gwangju Dream op-ed article, the Honam Branch Director of KT Corporation, Ryu Pyeong, advocated for a more ambitious Korea Emissions Trading Scheme (K-ETS), arguing “a more stringent signal should be given to corporate customers.”
On 21st June, the Federation of Korean Industries (FKI) advocated for the Korea Emissions Trading Scheme (K-ETS) to adopt the use of international ‘voluntary carbon market’ credits, and suggested that the K-ETS should ‘turn away from the focus on the regulatory carbon market’.
The table below lists the entities found to be most engaged with the policy. InfluenceMap tracks over 400 companies and 200 industry associations globally. Each entity name links to its full InfluenceMap profile, where the evidence of its engagement can be found.
| Influencemap Performance Band | Organization | Engagement Intensity | ||
|---|---|---|---|---|
| D+ | Hyundai Steel Co | 11 | Metals & Mining | Asia |
| D+ | POSCO | 25 | Metals & Mining | Asia |
| D+ | Korea Gas Corporation (KOGAS) | 12 | Energy | Asia |
| D+ | Korea Electric Power Corporation (KEPCO) | 27 | Utilities | Asia |
| C+ | LG Chem | 20 | Chemicals | Asia |
| D+ | Lotte Chemical | 8 | Chemicals | Asia |
| D+ | Samsung Electronics | 11 | Information Technology | Asia |
| C- | SK Hynix | 8 | Information Technology | Asia |
| D | LG Electronics | 1 | Information Technology | Asia |
| D+ | Hyundai Motor Group | 35 | Automobiles | Asia |
