By Park Si-soo
The government is expected to delay implementing a controversial carbon emissions trading program after the new finance minister called the plan "flawed."
Major manufacturing companies have protested against the program and demanded the government delay it.
"I think the existing plan is likely to be modified to delay its implementation or to reduce financial burden on companies," Park Ryun-min, an environment ministry official familiar with the case, told The Korea Times on Friday.
"We will soon start talking with two other ministries involved in the case ㅡ the Ministry of Trade, Industry and Energy and the Ministry of Strategy and Finance ㅡ to tackle the issue."
Under the original plan, the environment ministry planned to impose a certain quota on greenhouse gas a company can emit from next year. A company that emits less than its quota can sell the remaining emission rights.
New Deputy Prime Minister and Finance Minister Choi Kyung-hwan said on Thursday that the program was "flawed in many ways," hinting that he would pressure other related ministries to delay the scheme.
During his visit to a conventional market on Thursday morning, Choi said, "If it's found to have problems during preparation, we should revise related regulations to address them," he said.
Many problems had been found, although the program was set to take effect from January, he said.
"We will review the problems and then decide whether to implement it as scheduled," he said.
The government has so far maintained that the program intended to levy a hefty tax on energy-intensive industries will come into force as planned, ignoring industry calls to delay it.
But Choi's comments have raised the possibility that the implementation will be rescheduled, or the program will at least be modified to minimize its impact.
Early this week, the Federation of Korean Industries (FKI), Korea's biggest business lobby group, called for implementation to be delayed until 2020, arguing that its earlier adoption would severely hurt competitiveness of major companies such as Samsung Electronics, Hyundai Motor and POSCO.
Under the program, the FKI estimates, Korean companies will have to pay additional taxes of 27.5 trillion won ($26.6 billion) in additional taxes between 2015 and 2017.
The government denied the FKI's estimation, saying that companies would pay about 1.1 trillion won extra.
The FKI said Korea was not a major per capita greenhouse-gas emitter compared to China, the United States and Japan. The federation said the carbon tax would lead to higher energy costs for businesses and private users.
As of 2013, China was the world's biggest greenhouse gas emitter with 28.6 percent, followed by the United States with 15.1 percent, India with 5.7 percent and Russia with 3.8 percent, according to data from the FKI. Korea was seventh with 1.8 percent.
Then President Lee Myung-bak first included the carbon emission trading program on the national agenda in August 2008 as part of a "green growth" strategy. One month later, the government proclaimed that the country would reduce its greenhouse gas emissions by 30 percent by 2020.
The government is expected to delay implementing a controversial carbon emissions trading program after the new finance minister called the plan "flawed."
Major manufacturing companies have protested against the program and demanded the government delay it.
"I think the existing plan is likely to be modified to delay its implementation or to reduce financial burden on companies," Park Ryun-min, an environment ministry official familiar with the case, told The Korea Times on Friday.
"We will soon start talking with two other ministries involved in the case ㅡ the Ministry of Trade, Industry and Energy and the Ministry of Strategy and Finance ㅡ to tackle the issue."
Under the original plan, the environment ministry planned to impose a certain quota on greenhouse gas a company can emit from next year. A company that emits less than its quota can sell the remaining emission rights.
New Deputy Prime Minister and Finance Minister Choi Kyung-hwan said on Thursday that the program was "flawed in many ways," hinting that he would pressure other related ministries to delay the scheme.
During his visit to a conventional market on Thursday morning, Choi said, "If it's found to have problems during preparation, we should revise related regulations to address them," he said.
Many problems had been found, although the program was set to take effect from January, he said.
"We will review the problems and then decide whether to implement it as scheduled," he said.
The government has so far maintained that the program intended to levy a hefty tax on energy-intensive industries will come into force as planned, ignoring industry calls to delay it.
But Choi's comments have raised the possibility that the implementation will be rescheduled, or the program will at least be modified to minimize its impact.
Early this week, the Federation of Korean Industries (FKI), Korea's biggest business lobby group, called for implementation to be delayed until 2020, arguing that its earlier adoption would severely hurt competitiveness of major companies such as Samsung Electronics, Hyundai Motor and POSCO.
Under the program, the FKI estimates, Korean companies will have to pay additional taxes of 27.5 trillion won ($26.6 billion) in additional taxes between 2015 and 2017.
The government denied the FKI's estimation, saying that companies would pay about 1.1 trillion won extra.
The FKI said Korea was not a major per capita greenhouse-gas emitter compared to China, the United States and Japan. The federation said the carbon tax would lead to higher energy costs for businesses and private users.
As of 2013, China was the world's biggest greenhouse gas emitter with 28.6 percent, followed by the United States with 15.1 percent, India with 5.7 percent and Russia with 3.8 percent, according to data from the FKI. Korea was seventh with 1.8 percent.
Then President Lee Myung-bak first included the carbon emission trading program on the national agenda in August 2008 as part of a "green growth" strategy. One month later, the government proclaimed that the country would reduce its greenhouse gas emissions by 30 percent by 2020.
