The Korea Exchange (KRX) will host trading under South Korea’s emissions trading scheme, set to become the world’s second biggest when it launches on January 1, 2015, the Ministry of Environment said Monday.
KRX, the nation’s only securities exchange, won the bid to service the nation’s carbon market ahead of the Korea Power Exchange, a senior government official told Reuters.
The scheme will cap greenhouse gas emissions from over 400 of South Korea’s biggest polluters, mainly power generators and manufacturers.
Firms will be given free permits by the government based on their historical emission levels, but must buy more in the market if their emissions exceed allocated levels. The amount of free permits given out will reduce over time.
The Korean government aims to limit emissions in 2020 at 30 per cent below business-as-usual levels, with the emissions trading scheme as its center-piece policy to achieve the target.
South Korea emitted 669 million tonnes of carbon dioxide equivalent in 2010, making it the world’s eighth biggest emitter.
