US and EU Build 'Carbon Trade Barriers'... South Korean Government and Companies Must Accelerate Carbon Reduction Measures

[Asia Economy Reporter Hwang Yoon-joo] The Korea Chamber of Commerce and Industry (KCCI), in collaboration with the law firm Hwawoo, held the "8th KCCI Trade Forum" on the 28th. This forum was organized to discuss countermeasures in response to global trade issues such as the carbon border tax and trends in promoting carbon neutrality amid global environmental and climate change concerns.

At the meeting, Lee Seong-beom, a lawyer at Hwawoo who presented on "Trade and Commercial Response Measures of Our Companies to the Introduction of the Carbon Border Tax," stated, "Following the EU, the United States under Biden's administration is also expected to place great importance on climate change and environmental issues," emphasizing, "Our government and companies need to actively prepare by establishing and implementing carbon reduction plans."

Lawyer Lee explained, "In Korea, which operates an emissions trading system, there is a possibility of reducing the carbon border tax from the EU and others based on costs incurred domestically for carbon reduction. Therefore, our companies need to thoroughly manage evidence to prove this."

The Need to Implement an Economic System through the Establishment of High-Efficiency, Low-Carbon Energy Systems

Lee Sang-jun, a researcher at the Korea Energy Economics Institute and the second presenter on the topic of "Carbon Neutrality," argued, "There are limitations to the fossil fuel-based centralized energy supply system for accelerating energy transition," and stated, "The core is to implement an economic system through the establishment of high-efficiency, low-carbon energy systems for a sustainable energy system transition."

He continued, "Along with changes in power generation composition, changes are needed across the entire energy system including energy consumption, supply, transmission systems, and industry, but under the current carbon economy, it is impossible for these changes to form spontaneously," emphasizing, "Interdisciplinary and convergent policy promotion involving energy, industry, trade, technology, finance, taxation, land, and environment is an essential factor."

Lee proposed the following tasks for Korea's carbon neutrality implementation: ▲ Accelerate energy transition toward high-efficiency, clean fuels, new energy industries, and distributed systems ▲ Establish basic directions for decarbonization strategies such as decarbonization, digitalization, and deregulation, and implement them strategically ▲ Implement initiatives for eco-friendly power use, electric vehicle transportation, and maximizing energy efficiency to achieve low-carbon manufacturing production overall ▲ Support strengthening reduction capabilities in sectors where greenhouse gas reduction is difficult.

Participants Emphasize "Preparation for Countervailing Duties" and "Implementation of Decarbonization Initiatives across the Entire Production Process"

Additionally, forum participants noted that if the US and EU fail to introduce the carbon border tax due to concerns over violations of WTO and other international trade laws, they might impose countervailing duties by subsidizing exporting companies in exporting countries by the equivalent amount. Therefore, Korean companies need to prepare for this possibility.

They also stressed that to achieve decarbonization across manufacturing industries, voluntary initiatives and policy incentives should be combined to promote corporate participation, such as by conducting pilot projects centered on industrial complexes.

Woo Tae-hee, Executive Vice Chairman of KCCI who presided over the meeting, said, "One of the policy issues to watch closely under the Biden administration will be the expansion of environmental and climate change issues," adding, "Korea ranks 7th in the world in CO2 emissions, 18th in per capita emissions, and around 60th in emissions per GDP, with an industrial structure centered on energy-intensive industries. Therefore, measures and efforts are needed to overcome structural limitations to achieve greenhouse gas reduction targets."

Meanwhile, KCCI regularly holds the "KCCI Trade Forum" to review trade issues including trade remedy systems and trade issues in major economic zones such as the United States, China, and Japan.

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