Junggiyeon "To Achieve Carbon Neutrality for SMEs, a 'Voluntary Carbon Market System' Must Be Established"

Small and Medium Venture Business Research Institute Building.

[Asia Economy Reporter Donghyun Choi] The Small and Medium Business Venture Research Institute announced on the 14th that a policy to establish a ‘voluntary carbon market system’ is necessary to support small and medium enterprises (SMEs) in their transition to carbon neutrality.

Kim Giman, a senior research fellow at the institute, made this announcement in a report titled “The Rise of the Voluntary Carbon Market and Policy Directions for SMEs.”

Kim stated, “Interest in the voluntary carbon market is increasing both overseas and domestically, and the market size is also growing,” adding, “To explore the transition to carbon neutrality and sustainable growth for domestic SMEs, it is necessary to build a voluntary carbon market that SMEs can participate in.”

According to the report, the voluntary carbon market is a market where companies (or institutions) without carbon reduction obligations trade carbon emission rights for social responsibility and environmental protection purposes, and it has shown rapid growth since 2017. The market is expected to increase approximately 15-fold from 2020 to 2030. In particular, it reached about $800 million in the first half of 2021 and is expected to exceed $1.6 billion annually.

The report emphasized, “Unlike the mandatory regulatory market, which operates under strict regulations, the voluntary carbon market has relatively low operating and management costs,” and “Most domestic SMEs can participate in the voluntary market.” It added, “Although the voluntary carbon market has mainly operated overseas so far, domestic cases and trading platforms have recently emerged, so SMEs need to pay attention.”

Kim stressed that in Korea, about 100 SMEs are subject to the emissions trading system, and the vast majority of other SMEs are potential participants in the voluntary market. He then presented policy directions to establish and support a ‘voluntary carbon market system’ that SMEs can participate in.

He first stated that the government should support the operation of the voluntary carbon market as a government-led project until it is formed, expanded, and stabilized. He also pointed out that a dedicated organization for carbon emission certification should be operated at the level of the ministry responsible for SMEs. He emphasized providing incentives for SMEs’ voluntary greenhouse gas reduction activities and establishing the scope of a voluntary market system involving SME participation.

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