The Republic of Korea held its first auction for allowances under its national Emissions Trading System (KETS) on 23 January 2019. Seven companies participated with the bidding price ranging from KRW 23,100 (USD 20.41) to KRW 27,500 (USD 24.30). Four companies successfully bid for all available allowances (550,000 KAUs) for a settlement price of KRW 25,500 (USD 22.53) – two percent higher than the secondary market price closed earlier in the day. The total bid volume was 1.07 million tonnes, with a 194.55% bid rate, showing an overall demand for allowances.

Among other major changes for the second phase (2018-2020) of the KETS, a key change is the introduction of monthly auctions for three percent of the total share of allowances. Additional guidance on auctioning was released in March 2018, including sectors such as electricity and domestic aviation. Participation in the auction is also subject to some limitations. Only companies that do not receive all their allowances for free will be eligible to bid.  Additionally, no one bidder can purchase more than 30% of the allowances of one auction. The auctions are also subject to a minimum auction price, which is set by the government for each auction based on recent market developments.

While auctioning was originally set to begin in 2018, this was delayed until 2019. A total of 7.95 million tonnes are set to be auctioned this year, with 550,000 offered in the first, third and fourth quarters; a million tonnes will be offered in the second quarter.

Auctioning revenue will go towards funding emissions-reducing equipment projects and mitigation technology research and development.