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| South Korean industries will no longer get 100 percent free carbon permits from 2019, when they will be required to buy 3 percent of their assigned permits at a monthly auction. / Screen capture from YouTube |
By Ko Dong-hwan
From 2019, South Korean companies will be required to buy a portion of assigned carbon permits at auction, according to the Ministry of Environment Wednesday.
Three percent of carbon permits assigned by the central government to each company will be up for grabs at a monthly auction at the Korea Exchange during the second phase of the nation's emissions trading scheme (2018-20), also known as the South Korean ETS.
The permits were distributed to companies free during the first phase (2015-17).
The list of industrial categories required to purchase permits will be announced in June. The permit cap for each category will be decided in September. These are the preliminary steps before Seoul's launch of the bidding system the following year.
Companies eligible to join the auction are those with a bidding price equivalent to or higher than the minimum set by the environment minister each month.
Reserved permits held by the central government for market stabilization will also be traded to companies through the auctions.
The ministry's latest carbon permit measures are part of the revised greenhouse gas emission trading scheme laws. The ministry slated Mar. 26 as the deadline for a grace period before launching the updated environmental scheme.
Also known as cap and trade, the emissions trading scheme is an eco-friendly measure taken by the European Union and countries like the United States, Japan, Australia, China and India. Mandated by governments, it is the market-based approach to controlling pollution by providing economicincentives for achieving emissions reductions.
