CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. South Korea Launches Emissions Trading Scheme

South Korea Launches Emissions Trading Scheme

by Mary Swire,, Hong Kong

14 January 2015

South Korea's carbon emissions trading scheme (ETS), a key component of the Government's plan to cut greenhouse gas (GHG) emissions, became operational on January 12, 2015.

The ETS, which was intended to launch last year, plans to reduce GHG emissions to 30 percent below current levels by 2020.

The ETS will impose a cap on GHG emissions by 525 of South Korea's largest companies, including airlines, and automobile, electronics, petrochemical, and steel producers, covering companies responsible for about 65 percent of the country's carbon emissions.

However, during the first three years of the scheme's operation, from 2015 to 2017, companies and energy producers will be allowed 100 percent of their benchmarked emissions limit without charge.

Companies will have to purchase credits if they wish to exceed their limits, and those that do not use their quota may sell their excess credits. The trading scheme has no links to the international carbon market, with participation being restricted to the 525 companies.

Business associations have warned that the ETS could put South Korean companies at a severe cost disadvantage internationally, despite the transitional arrangements, if countries in competition with South Korea have yet to introduce similar carbon tax schemes by the time the concessionary arrangements expire.

However, South Korea, the world's seventh-largest carbon emitter, now has the world's second largest ETS market, after the European Union. In Asia, China plans to have a national ETS in operation by 2020, and it would then have the biggest carbon market in the world. Japan and the United States, two of South Korea's main competitors, have yet to introduce such schemes.

TAGS: environment | compliance | tax | business | tax compliance | energy | aviation | oil and gas | manufacturing | carbon tax | Korea, South

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »