Policy Overview

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.

Evidence Profile

94029111

Key

opposing not supporting mixed/unclear
supporting strongly supporting

Policy Engagement Overview

The aggregated evidence of corporate and industry engagement with the Korea Emissions Trading Scheme (K-ETS) shows significant opposition from cross-sector associations and heavy industry including the steel, automotive, and petrochemical sectors. Among individual corporates, KOGAS and POSCO have taken negative positions on increasing the carbon price and effectiveness of the K-ETS, while other companies have positively engaged with the policy.

Policy Engagement Trends

Large cross-sector industry associations have not supported the Korea Emissions Trading Scheme (K-ETS). The Korea Enterprises Federation (KEF) and the Korea International Trade Association (KITA) did not support the revision of allowances allocation plan of the K-ETS, suggesting the suspension of revision application. The Federation of Korean Industries advocated for moving the K-ETS away from a regulated to a voluntary system, in July 2022.

Heavy industry associations representing the steel, automotive, and petrochemical sectors have also not fully supported an ambitious K-ETS. The Korea Iron and Steel Association (KOSA) and the Korea Petrochemical Industry Association (KPIA) did not support including indirect GHG emissions in the K-ETS. The Korea Automobile Manufacturers Association (KAMA) opposed the K-ETS and advocated for reforming the policy for weaker regulations.

The Independent Power Producers Association (IPPA), did not support reform of the K-ETS to increase the ratio of paid allocations.

Some South Korean companies broadly supported the K-ETS, including companies such as Hyundai Steel, SK Innovation, and SK E&S. Meanwhile, the Korea Gas Corporation (KOGAS) did not support the K-ETS and advocated for increasing number of free allowances.

Evidence Profile

94029111

Key

opposing not supporting mixed/unclear
supporting strongly supporting

Live Lobbying Alerts

Federation of Korean Industries appears to oppose regulated carbon markets

23 June 2022

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’.

KT Corporation calls for a more ambitious K-ETS

28 October 2022

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.”

Korea Iron and Steel Association unsupportive of ambitious reforms to the Korean Emissions Trading Scheme

22 December 2022

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.

Federation of Korean Industries supports K-ETS reforms

14 July 2022

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.

Korea Petrochemical Industry Association supports the Korean Emissions Trading System

11 November 2022

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.

Korea International Trade Association advocates for increasing free emission allowances under the Korea Emissions Trading System

27 January 2023

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).

Entities Engaged on Policy

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 BandOrganizationEngagement Intensity
DKorea Iron and Steel Association (KOSA)21Metals & MiningAsia
D+POSCO29Metals & MiningAsia
D+Hyundai Steel Co12Metals & MiningAsia
EKorea Automobile & Mobility Association (KAMA) (formerly Korea Automobile Manufacturers Association)22AutomobilesAsia
D-Korea Enterprises Federation (KEF)16All SectorsAsia
D+Korea International Trade Association (KITA)14All SectorsAsia
D+Korea Gas Corporation (KOGAS)12EnergyAsia
E-Federation of Korean Industries (FKI)20All SectorsAsia
E+Korea Independent Power Producers Association (IPPA)10EnergyAsia
D+Korea Business Council for Sustainable Development (KBCSD)8All SectorsAsia
D+Korea Electric Power Corporation (KEPCO)28UtilitiesAsia
CLG Chem28ChemicalsAsia
C-Samsung Electronics14Information TechnologyAsia
DKorea Chamber of Commerce and Industry (KCCI)26All SectorsAsia
D+SK Hynix8Information TechnologyAsia
D+Lotte Chemical10ChemicalsAsia
C-KT Corporation6TelecommunicationsAsia
D+LG Electronics2Information TechnologyAsia
D+Doosan Enerbility (formerly Doosan Heavy Industries)16IndustrialsAsia
D-Korea Petrochemical Industry Association (KPIA)8ChemicalsAsia
D+Hyundai Motor Group36AutomobilesAsia
D+SK Innovation Co12EnergyAsia