On 2 May 2018, the Republic of Korea amended its offset rules for the national emissions trading system to allow the use of international credits from the start of the second phase (2018-2020). Currently, regulated entities can use offset credits to meet up to 10% of their compliance obligations under the ETS. In the next phase, up to 50% of these credits can be from projects developed by Korean companies under the Clean Development Mechanism (CDM). These requirements are largely in line with the draft rules published in March 2018. 
 
Additional eligibility criteria on Korean company ownership were outlined in the final rules. CDM projects operated by Korean companies will be realized when: (i) at least 20% of the ownership rights, operating rights or the voting stocks are owned by a Korean company; (ii) a Korean company sells or distributes more than 20% of the total project cost; or (iii) the projects are funded by a Korean company with a national or regional government operating in a UN-designated Least Developed Country or a low-income economy as classified by the World Bank.
 
Regulated entities also must convert CDM credits (Certified Emission Reduction units)to Korean Carbon Units (KCUs) in order to be used for compliance.