March 5 (Bloomberg) -- South Korea’s government plans to meet in May with the nation’s biggest emitters to provide information about the start of cap and trade in 2015.
The government plans to select an exchange for greenhouse- gas emissions in the second half of this year and decide how to allocate free allowances to an estimated 480 emitters by June 2014, Lee Hyung Sup, a deputy-director at the Ministry of Environment, said in a phone interview yesterday in Seoul. Trials for carbon trading are set to start in June 2014, he said.
“The government’s preparation is on track,” regardless of the change in leadership, to start the system in 2015, said Lee, one of 40 members of a state task force formed Feb. 22. “We will estimate emissions by emitters and map out allocations based on those projections.”
South Korea last month inaugurated President Park Geun Hye, who has nominated Yoon Seong Kyu as her environment minister. The country has pledged a 30 percent cut in emissions by 2020 from forecast levels. It joins the European Union and California in letting emitters buy and sell and fixed number of emission permits. Cap and trade is set to start in 2015 in Australia and this year in seven Chinese provinces.
Emissions from Korean companies and buildings rose 9.8 percent to 668.8 million metric tons of carbon dioxide equivalents in 2010, the biggest annual increase since 1993, as demand for power and steel production capacity increased, the ministry said on Feb. 27. Thermal power generators and steelmakers accounted for 74 percent of the jump in 2010 emissions.
South Korea will give emitters all their allowances for free from 2015 until 2017. It rejected requests for giveaways through 2020 from emitters and announced guidelines on Nov. 13 for giving away as much as 97 percent of firms’ emission allowances between 2018 and 2020.
“We continue to ask the government to adjust schedules for the trading,” said Kim Tae Yoon, head of strategic industries team at the Federation of Korean Industries, one of the nation’s top two business lobby groups. “It’s inevitable for the start in 2015 to increase the burden on companies that compete with rivals in countries that don’t introduce such systems,” he said yesterday by phone.
Gross domestic product in South Korea rose 2 percent in 2012, the slowest pace since 2009, as Europe’s debt crisis and a global slowdown sapped overseas demand for Korean products. The government is considering the Korea Exchange or the Korea Power Exchange as emissions-trading platforms, Nam Kwang Hee, director general of the Presidential Committee on Green Growth, said on Nov. 15.
--Editors: Mike Anderson, Andrew Reierson.