526 firms to participate in carbon trading scheme

By Kim Se-jeong

Five hundred and twenty-six companies must participate in the country’s Emissions Trading Scheme (ETS), which will go into effect on Jan. 1 next year, the Ministry of the Environment said Thursday.

The amount of carbon they will trade between 2015 and 2017 is estimated at 1.687 billion tons.

Most major Korean companies are subject to the scheme. They include the Korea Electric Power Corp., POSCO, Samsung Electronics and GS Caltex.

Lotte Hotel, Seoul National University, Incheon Airport and Seoul Metropolitan Government will also trade carbon, as their average individual greenhouse gas emission is higher than the minimum 12,500 tons per year, the ministry said.

It said it will unveil the quotas for individual companies later this year.

Out of the estimated 1.687 billion tons, 1.598 billion tons will be allocated in quotas, while the rest will be kept in reserve in case the market becomes overheated.

Individual companies are required to submit preferred allocation amounts by Oct. 14, and the ministry will determine the exact allotment for each by end of November.

The announcement came 10 days after Strategy and Finance Minister Choi Kyung-hwan said the controversial trading scheme will be implemented next year as planned. It survived fierce opposition from heavy and oil refinery industries. A tax program on vehicles with a high emission rate was postponed to 2020, giving into the automobile industry’s interest.

“The Emissions Trading Scheme is finally taking off. Despite the tight deadline, we are working to make everything proceed smoothly,” Park Ryun-min from the Ministry of Environment said in a statement Wednesday.

Korea’s ETS was designed to curb greenhouse gas emission by getting private companies to sell and purchase emission rights. Korea took the example of the European Union, which is a pioneer in the program.

California in the United State has the scheme up and running, as do a couple of provinces in China and Japan. Australia, however, cancelled the program, citing inefficiency.

No guideline is put on price, except that one ton can’t be more expensive than 10,000 won ($9.66).

The scheme is part of the national greenhouse gas reduction plan.

In 2009, the government under then President Lee Myung-bak, pledged that by 2020 Korea would reduce its greenhouse gas emissions by 30 percent from business as usual. Emissions trading legislation passed into law in 2012.