Korea Emissions Trading Scheme

The Korea Emissions Trading Scheme (K-ETS) launched in 2015 as East Asia’s first nationwide, mandatory ETS. It covers around 74% of South Korea’s national GHG emissions and will help the country in its objective to become carbon neutral by 2050, a target embedded in the “Carbon Neutral Framework Act” of 2021.

The K-ETS covers 684 of the country’s largest emitters in the power, industrial, buildings, waste, transport, and domestic aviation sectors. At least 10% of allowances must be auctioned. Free allocation is provided for EITE sectors based on production cost and trade intensity benchmarks. Since 2021, domestic financial intermediaries and other third parties have been able to participate in exchange.

The K-ETS was established by the “Framework Act on Low Carbon, Green Growth” (2010). It was preceded by a mandatory Target Management System (TMS) which launched in 2012, following a two-year pilot phase. The TMS facilitated the collection of verified emissions data and training in the MRV process, and still applies to smaller entities not covered by the K-ETS.

The scheme covers the following sectors: Waste, Domestic Aviation, Transport, Buildings, Industry and Power.

For more information please visit: