KETS prepares for the expansion of benchmarking

On 9 May 2018, the Ministry of Environment of the Republic of Korea held a briefing session for covered entities under the Korean Emissions Trading System (KETS) where the draft allocation plan, which sees an expansion of benchmarking, was announced. 

 

For the second phase (2018-2020), benchmark-based allocation will be expanded from three sub-sectors (grey clinker, refinery and aviation) to also include the power generation, group energy, industrial complex, petrochemical, and waste subsectors. 

 

Furthermore, according to the draft plan, the public and waste sectors will be disaggregated, so that the KETS will now cover six, rather than five sectors (heat and power, industry, building, transportation, waste and public sector). The sub-sectors will also be reclassified to include 64 rather than 23 sub-sectors. 

 

The government also plans to release a share of the allowances held in reserve for market stabilization in June following the increase of the allowance price to KRW 28,000 (EUR 21.84) at the end of last year. In addition, three market makers including Export-Import Bank, Korea Development Bank and Industrial Bank of Korea will be allowed to participate in the KETS in an effort to increase trade activity. 

 

The allocation plan is still in the process of development and will be finalized by the end of June, following KETS participants’ feedback on the draft.