South Korea’s government is facing opposition from business groups over its proposal to start a carbon-emissions trading system in 2013.
Business groups, including the Federation of Korean Industries, the Korea International Trade Association, the Korean Employers Federation and the Korea Federation of Small and Medium Business, want the government to delay the adoption of carbon emissions trading, the Korea Chamber of Commerce & Industry said at a conference today on the subject in Seoul.
The system will increase costs for domestic companies and make them less competitive than rivals from Japan and China, which don’t have emissions trading, Lee Jong In, head of climate change team at the Korea Chamber of Commerce. He didn’t give a figure for the increase in costs.
The government of Asia’s fourth-biggest polluter said in November it will aim to adopt a carbon-emissions trading system in 2013 as part of its efforts to reduce greenhouse gas emissions and fight global warming. The proposal requires public hearing sessions and parliamentary approval.
The Federation of Korean Industries, the country’s largest business group, has 507 members including Posco, South Korea’s largest steelmaker and Korea Electric Power Corp.
Annual revenue at South Korea’s main industries may fall 12 trillion won ($10.7 billion) should emissions trading be introduced, the Korea Economic Daily reported on Nov. 25, citing a research paper by the Korea Economic Research Institute.
Saving energy
The government also announced on Sept. 28 that companies with factories producing at least 25,000 metric tons of carbon dioxide a year must set energy-saving and greenhouse gas-reduction targets by September 2011. They will face fines of as much as 10 million won if the targets aren’t met.
South Korea said in 2009 that it would voluntarily reduce carbon emissions by 30 percent from the expected 2020 level, or 4 percent below its emissions in 2005. South Korea may become the second nation to start emissions trading in Asia after New Zealand if the parliament approves.
Europe accounted for 81 percent of total emissions trades in 2010, according to Bloomberg New Energy Finance. This trend is set to continue through 2020 given the lack of progress on legislation in the U.S., Japan and Australia, Guy Turner, an analyst at Bloomberg New Energy Finance said last week.
Japan’s Environment Minister Ryu Matsumoto declined to commit to a schedule in a press conference on Dec. 28 after a meeting with other ministers to discuss the nation’s emissions trading plans. In August, an environment ministry panel recommended starting emission trading in fiscal 2013.
