"South Korea's Emissions Trading System Standards Should Be Lowered to at Least EU Levels"

Korea Industrial Federation Forum Holds Industrial Development Forum
Chairman Jeong Manki: "Korea Has the Highest Regulatory Intensity"

[Asia Economy Reporter Kiho Sung] South Korea's emissions trading system (ETS) has been pointed out as having the strictest regulations in the world. To improve this, it is advised that the ETS standards be reformed to at least match the level of the European Union (EU).

The Korea Industrial Alliance Forum (KIAF) held the 27th Industrial Development Forum on the 2nd under the theme "How Should the Emissions Trading System Be Managed?" At the forum, KIAF Chairman Manki Jeong stated in his keynote speech, "Carbon taxes have been introduced in 37 regions and countries worldwide, and ETS has been implemented in 34 regions and countries including South Korea," adding, "South Korea operates the world's most stringent ETS."

Chairman Jeong pointed out, "South Korea is almost unique in including indirect emissions such as electricity usage, making the tradable portion of total emissions 73.5%, which is about 30 percentage points higher compared to the EU's 39% and China's 40%." He also noted, "While the EU includes only power generation, industry, and aviation sectors, and China includes only the power generation sector, South Korea includes all sectors."

He identified the biggest problem with the ETS as "the risk that the ETS may hinder disruptive technological innovation." He emphasized, "Our 2050 carbon neutrality scenario is based entirely on disruptive technological innovations such as hydrogen reduction steelmaking. In reality, achieving the goals is difficult with existing technological improvements, so disruptive innovation is necessary, but policies are moving in the opposite direction."

Furthermore, Chairman Jeong argued, "From the perspective of corporate burden, South Korea's ETS should be reformed to at least the same level as the EU," proposing reforms such as ▲ excluding indirect emissions regulation, which no other country in the world implements, to improve compatibility with overseas ETS ▲ easing additional allocation criteria for unavoidable production increases due to economic recovery ▲ simplifying the external project procedures of the triple review structure involving the competent ministry → Ministry of Environment → deliberation committee and raising the offset credit usage limit ▲ relaxing carryover restrictions to ensure price stability and encourage long-term industry strategies and technological innovation ▲ enhancing information disclosure and establishing cooperative systems for the utilization of emissions-related data and information by relevant ministries and research institutions.

The forum continued with a discussion chaired by Professor Seungjin Kang of Korea Polytechnic University, featuring Nam Jeongim, Director of the Korea Iron & Steel Association; Kiyeong Kim of the Korea Petrochemical Industry Association; Uicheol Kim, Center Director of the Korea Cement Association; and Jaeyoon Lee, Research Fellow at the Korea Institute for Industrial Economics & Trade.

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