Will South Korea's Greenhouse Gas Emission Permits Be Traded Like Stocks?
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Synopsis
South Korea is revolutionizing its approach to greenhouse gas emission permits by allowing trading similar to stocks, promoting greater participation from financial institutions. As the nation sets ambitious targets for reducing emissions, find out how this new system aligns with global climate commitments and enhances market dynamics.
Key Takeaways
- South Korea expands emission permit trading to include financial institutions.
- Trading system allows transactions similar to stocks.
- Emission reduction target set for 53-61% by 2035.
- New trading hours established for more convenience.
- Future market for emissions trading on the horizon.
Seoul, Nov 23 (NationPress) South Korea is set to enhance its greenhouse gas emission permit trading framework this week, enabling transactions akin to stock trading, as announced by the climate ministry on Sunday.
Beginning Monday, various financial institutions—including banks, insurance companies, and pension funds—will have the opportunity to establish accounts with securities firms, allowing them to trade emission permits via their trading platforms, according to the Ministry of Climate, Energy and Environment.
Previously, emission permits could only be traded directly through the Korea Exchange, the primary stock market operator, and were restricted to designated companies, as reported by Yonhap news agency.
The trading hours will be from 10 a.m. to 12 p.m., with permit auctions scheduled for an hour starting at 2 p.m., and over-the-counter trading will be available for three hours from 2 p.m.
The ministry indicated that the revamped trading system for emission permits is anticipated to enhance transaction convenience for companies and boost trading volumes through the inclusion of financial institutions.
This new framework will also facilitate the establishment of a futures market for emission trading and related financial instruments, as noted by the ministry.
Simultaneously, a presidential commission revealed its endorsement of a target to reduce South Korea's greenhouse gas emissions by 53-61 percent from levels recorded in 2018 by the year 2035, aiming to expedite the shift towards carbon neutrality while bolstering industrial competitiveness.
The Presidential Commission on Carbon Neutrality and Green Growth confirmed its approval of the nationally determined contribution (NDC) target for 2035, which is slightly above the government's initial proposal of a 50-60 percent reduction.
The government plans to finalize the emissions target during a Cabinet meeting on Tuesday and will officially unveil the plan at the 30th United Nations Climate Change Conference (COP30) in Belem, Brazil, which commences on Tuesday and continues until Nov. 21, as stated in a commission release.
According to the Paris Agreement, each nation must submit and update its NDC every five years, outlining initiatives to reduce greenhouse gas emissions.
Point of View
It's essential to recognize South Korea's proactive steps towards addressing climate change through innovative measures. The expansion of the emission permit trading system not only facilitates market dynamics but also aligns with global sustainability goals. The government's commitment to significantly reduce emissions underscores the urgency of transitioning to a greener economy while maintaining industrial competitiveness.
NationPress
23/11/2025
Frequently Asked Questions
What is the new trading system for greenhouse gas emissions in South Korea?
South Korea's new trading system allows financial institutions to trade greenhouse gas emission permits similarly to stocks, increasing market participation and convenience.
What are the trading hours for emission permits?
The trading hours for emission permits are from 10 a.m. to 12 p.m., with permit auctions from 2 p.m. to 3 p.m. and over-the-counter trading available from 2 p.m. to 5 p.m.
What are South Korea's emission reduction targets?
South Korea aims to reduce its greenhouse gas emissions by 53-61% from 2018 levels by 2035, as part of its commitment to carbon neutrality.
Where will the emissions reduction plan be announced?
The emissions reduction plan will be officially announced at the 30th United Nations Climate Change Conference (COP30) in Belem, Brazil.
What is the significance of the new trading system?
The new trading system is expected to enhance transaction convenience and increase trading volumes, paving the way for the introduction of a futures market for emissions trading.
