Korea plans to revise Guidelines related to GHG trading to add benefits for reduction

South Korea Ministry of Environment plans to enforce the public notice regarding the partial amendment of the Guidelines for Allocation and Cancellation of Greenhouse Gas Emissions Credits (administrative notice period: November 19, 2021 – December 9, 2021) and the Guidelines for Emissions Reporting and Certification of Greenhouse Gas Emissions Trading System (administrative notice period: November 22, 2021 – December 13, 2021) after each administrative notice period. The former amendment aims to provide quota holders who participate in GHG reduction with advantages in allocating emissions credits in order to encourage quota holders to actively reduce GHG emissions, and to avoid disadvantages of emissions credits due to emissions reductions. The latter amendment aims to improve the emissions calculation method (excluding indirect emissions) of quota holders participating in the GHG emissions trading system, and to ensure sufficient activities data of companies that apply the emissions efficiency standard (Benchmark: BM) at the time of allocation.

Guidelines for Allocation and Cancellation of Greenhouse Gas Emissions Credits

The main revisions to the Guidelines for Allocation and Cancellation of Greenhouse Gas Emissions Credits are as follows.
https://www.epeople.go.kr/cmmn/idea/redirect.do?ideaRegNo=1AE-2111-0000868

1. In addition to the existing reduction achievements within the quota holders, the scope of certification shall be expanded to include external reduction achievements and achievements in the use of renewable energy. (Article 7, Annex 1, and Attachment No. 26)
2. For companies that did not apply for quotas in preparing a draft decision of the quota amount for each company for a plan period, it shall be possible to calculate the draft decision of the quota amount by utilizing the reference period description of such companies. (Article 12)
3. If the emissions in a performance year increase by more than twice as much as the expected emissions in that performance year due to an increase in the operating rate of a facility newly constructed during the reference period, it shall be considered that an additional facility has been constructed, and additional allocation can be applied for. (Article 15)
4. When additionally calculating the amount of allocation and cancellation at a facility with reduction achievements recognized by the Minister of Environment, the amount of the emissions shall reflect the reduction achievements. (Article 15, Article 19, Article 24, and Article 29)
5. A new clause shall be established to provide a basis for enabling ex officio correction of the amount of additional allocation and cancellation calculated on the basis of the company’s emissions in a performance year in case a company files an objection to its emissions and the final amount of the certified emissions are changed. (Article 20 and Article 30)
6. Revise the relevant forms for additional quota applications so that details are provided on the relevant information and the amount of quota cancellation by each fiscal year. (Attachment form No. 14 and Attachment form No. 19)

Guidelines for Emissions Reporting and Certification of Greenhouse Gas Emissions Trading System

The main revisions to the Guidelines for Emissions Reporting and Certification of Greenhouse Gas Emissions Trading System are as follows.
https://www.epeople.go.kr/cmmn/idea/redirect.do?ideaRegNo=1AE-2111-0001107

1. When a quota holder receives the supply of electricity produced by utilizing waste heat from waste treatment facilities or industrial processes, the indirect emissions of greenhouse gas associated with the use of electricity shall be excluded. (Article 18, Paragraph 1, Item 4, and Appendix 6)
2. In the case where a quota holder receives the supply of electricity directly from renewable energy electricity suppliers without going through the electricity market, indirect emissions of greenhouse gas associated with the use of electricity shall be excluded. (Article 18, Paragraph 6, Item 2)
3. The format for greenhouse gas emissions description will be changed in order to ensure that activities data of companies applying the emissions efficiency standard (Benchmark: BM) and the data on the current status of emissions facilities are available at the time of allocation. (Attachment 3 and Reference 8 of Attachment form No. 11)