Industry, including the steel, chemical, and petroleum sectors, said the goals set in the government's soon-to-be-finalized "4th emissions allowance transaction scheme (2026–2030) allocation plan" are excessive and urged the government to establish a 2035 national greenhouse gas reduction target (NDC) that considers feasibility and industrial competitiveness.
Eight associations — the Korea Chamber of Commerce and Industry, Korea Iron & Steel Association, Korea Chemical Industry Association, Korea Cement Association, Korea Petroleum Association (KPA), Korea Nonferrous Metals Association, Korea Paper Manufacturers Association, and Korea Chemical Fibers Association — said on the 5th they submitted a joint petition to the government containing these points.
The government plans to hold a public hearing on the "2035 NDC" on the 6th of this month and then draw up the final 4th emissions allowance transaction scheme. The plan will apply for the next five years. The government intends to submit the finalized NDC to the United Nations Framework Convention on Climate Change (UNFCCC) before the 30th Conference of the Parties (COP30) opens next month.
The government has proposed a plan to cut advance allocations of emissions allowances by 48% to 65% compared with 2018. Industry said, "The 2035 NDC reduction scenario and the emissions allowance transaction scheme allocation plan presented by the Ministry of Climate, Energy and Environment will place an excessive burden on industry," adding, "Beyond the 48% reduction plan, the remaining 53%, 61%, and 65% reduction plans lack details on how much and how each institutional sector and industry should reduce."
They added, "To meet an unreasonable reduction target, the only alternative is an artificial cut in production," and said, "This will lead to weakened industrial competitiveness and reduced exports and employment, dealing a serious blow to national competitiveness."
Industry argued that if the 4th emissions allowance transaction scheme is finalized as prepared by the Ministry of Climate, Energy and Environment, the burden from electricity rates and the purchase of emissions allowances will increase. According to a survey by the Korea Chamber of Commerce and Industry of major industries, during the 4th plan period the steel sector would need to purchase an additional 51,419,000 tons (t) of allowances, refining 19,122,000 t, cement 18,989,000 t, and petrochemicals 10,288,000 t.
Industry said, "Assuming an allowance price of 50,000 won per t, the total expense for allowance purchases during the 4th plan period comes to about 5 trillion won," adding, "This survey covered only some corporations in the four industries, meaning industry will face an excessive carbon cost burden going forward."