Seoul: The South Korean government has announced plans to align its greenhouse gas emission permit trading system with the minimum reduction target set under its nationally determined contribution (NDC), in an effort to alleviate the additional financial burdens on local businesses. This initiative aims to ensure that the emission permit trading system operates in accordance with the baseline NDC target for 2035, which dictates a 53-61 percent reduction in emissions from 2018 levels, as stated by the industry and climate ministries.
According to Yonhap News Agency, the announcement was made during a meeting between the government and private industry representatives to discuss a strategic road map for achieving the 2035 target. Following the finalization of the NDC target earlier this month, various industries, including automobiles, steel, and petrochemicals, have raised concerns over the potential financial impact of the carbon reduction plan. These industries are apprehensive about the increased costs associated with building carbon reduction facilities and purchasing emission credits.
To mitigate these concerns, the government plans to acknowledge Korean companies' overseas carbon reduction projects and grant additional emission permits to companies that expand their facilities. The Ministry of Trade, Industry and Resources has also pledged to launch a 5 trillion-won (approximately US$3.4 billion) project next year to support research and development in carbon neutrality technologies.
The government will additionally assist companies in upgrading their facilities for emissions reduction by offering various incentives and promoting partnerships between conglomerates and small to medium-sized enterprises. These joint efforts are aimed at achieving carbon neutrality and supporting industries in transitioning towards low-carbon, high-value production.
An official from the industry ministry emphasized, "The government will actively support the 2035 NDC target so that it becomes a turning point for our industries to transition toward low carbon and high-value production."