Carbon Emission Permits as a 'New Income'... Chungnam's Win-Win Cooperation Between Farms and Industrial Complexes

Wood pellet image photo. The photo is unrelated to the article. Source=Asia Economy DB

[Asia Economy (Hongseong) Reporter Jeong Il-woong] #In Buyeo, Chungnam, Sabiteojeon Agricultural Cooperative Corporation, which cultivates tomatoes, gained a new source of income after replacing its greenhouse heating system from electric heaters to air-source heat pumps in 2017. The income comes from transferring carbon emission rights secured by reducing greenhouse gas emissions from the existing facilities to local industrial complexes. Moreover, the cooperative’s initial investment for facility replacement is expected to be covered by energy savings and various subsidies, which is anticipated to double the farmers’ profits.

Chungnam Province announced on the 5th that the ‘Greenhouse Gas Reduction Agricultural Development Win-Win Cooperation Project’ (hereafter referred to as the Win-Win Project) is creating a win-win effect between local farms and industrial complexes.

The Win-Win Project began in 2015 with an agreement between the province, the Ministry of Agriculture, Food and Rural Affairs, and Western Power. It is the first case in Korea aimed at promoting mutual development between Chungnam’s farms and businesses.

The project encourages local farms to adopt low-carbon facilities and provides subsidies of 15 million KRW annually for 10 years, totaling 150 million KRW.

For example, Sabiteojeon Agricultural Cooperative invested 350 million KRW to replace its heating system and receives 15 million KRW in subsidies annually.

Additionally, the energy cost savings from the facility replacement have been reduced from 100 million KRW to 50 million KRW per year, making it possible to recover the investment in heating system replacement within five years. The province explains that energy savings and Win-Win Project subsidies will continue afterward, remaining as income for the farms.

So far, a total of 80 local farms have participated in the Win-Win Project, and these farms have gained another source of income: carbon emission rights obtained by reducing greenhouse gases through facility replacement. In fact, Western Power has established a project fund of 10 billion KRW over the past five years, including this year, to support the registration and monitoring costs of carbon emission rights for low-carbon facilities introduced by local farms.

The province emphasizes that farms can sell the greenhouse gas reduction performance secured by operating low-carbon facilities to Western Power. Farms participating in the Win-Win Project mainly use (or have replaced with) low-carbon heating facilities such as air-source heat pumps, geothermal heat pumps, wood pellet boilers, or have additionally installed multi-layer thermal curtains.

Through this, the total greenhouse gas reduction achievable by all farms over 5 to 10 years is 115,630 tons, and the sales amount of emission rights ranges from 10,000 KRW to 30,000 KRW per ton, totaling approximately 1.81995 billion KRW. This means an average additional income of 23 million KRW per farm among the 80 farms.

Riding on these effects, the province plans to select about 10 more farms to participate in the Win-Win Project by the end of this year, when the agreement period with Western Power and others expires.

Kim Yong-chan, Deputy Governor of the province, said, “Climate change caused by greenhouse gases directly threatens our lives. The province will continue to discover and promote greenhouse gas reduction projects in various fields to wisely overcome the climate crisis.”

This content was produced with the assistance of AI translation services.