Korea has, recently, established the world's second largest carbon trading market. Caps, as of this week, are imposed on over 500 Korean-based companies. Carbon credits, in Korea, shall be traded via the Korean Exchange.
The Korean government has set limits on carbon emissions for these companies for the period of 2015 to 2017 at a little over 1.6 million tonnes. Any company emitting more than the amount the company has permits for must purchase carbon credits from the open market.
Korea is the second country in Asia to develop a national carbon trading
system. China has regional trading systems and may launch a national
carbon trading system within the next couple of years.
It is expected that the market will have a low number of transactions for the next two quarters and the market will, quickly, pickup in the second half of this year. Many commentators have noted that the cost of carbon credits, in Korea, may, drastically, increase by next year.
I will update the reader on enforcement actions and on the success of the market when more information is known.
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Sean Hayes may be contacted at: SeanHayes@ipglegal.com.
Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.
Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.