KOREAN CARBON MARKET

Korea is the first developing country in the world to establish a domestic carbon trading scheme. The Korean Emissions Trading Scheme (KETS) is currently preparing for its lauch in 2015. The KETS is the Korean government's flagship policy for Green Growth aiming for emission reductions of 30 percent in 2020.

This scheme is expected to start operating at the beginning of 2015 with all six greenhouse gases listed in the Kyoto Protocol covered. Companies covered under the government's Target Management System will be participants in the KETS representing about 60 percent of Korea's emissions. Individual emission caps are imposed on each participant to achieve the emissions reductions desired by the KETS.

The current draft rules allow for carbon credits from emission reduction projects to be used for compliance. The use of Certified Emission Reductions (CERs) generated under the United Nation's Clean Development Mechanism in Korea is permitted. However the use of CERs from outside of Korea is not allowed until at least 2021.