SEJONG, March 16 (Korea Bizwire) – South Korea will inject a fresh 26.2 billion won (US$23.1 million) worth of greenhouse gas emissions rights in the trading market this month as part of its efforts to foster the local carbon trading system, the finance ministry here said Thursday.
A government panel chaired by Vice Finance Minister Choi Sang-mok approved some 1.31 million tons of greenhouse gas reductions achieved by non-mandatory businesses, according to the finance ministry.
The total amount to be injected is based on the average trading price of 20,000 won per ton.
Under the country’s greenhouse gas emissions trading system (ETS) launched in January 2015, some 600 local companies are given their own Korean allowance units (KAUs) to buy extra emissions rights when they surpass their own quota. Some 543 million tons of KAUs were allocated to the companies in 2015.
In order to facilitate the ETS market, the government allows other businesses that are not subject to the cap-and-trade scheme to sell their extra emissions rights on the exchange if they win approval.
The over-the-counter emissions reductions are dubbed Korean offset credits (KOC), which are eligible to be traded on the ETS market.
During the 2015-2016 period, the panel approved a combined 15.6 million tons of KOC.
The government has been trying to increase the supply of emissions rights in the market as rising demand for KAUs has pushed up the price in recent months.
The trading price of emissions rights per tonne soared 40 percent to 23,700 won as of March from 17,000 tallied six months earlier.
South Korea is planning to curb greenhouse gas emissions by 37 percent from 2030 business-as-usual levels.