Korea Environment Corporation (K-eco) said the greenhouse gas emissions allowance price needs to be at least 20,000 won per ton for the emissions allowance transaction system to operate properly.
On the 14th at the Government Sejong Complex, Director Lim Sang-jun of Korea Environment Corporation (K-eco) answered this way when Minister Kim Sung-hwan of the Ministry of Climate, Energy and Environment asked about the expected emissions allowance price for the "4th emissions allowance transaction scheme period," which runs from this year through 2035, during a briefing by environment-affiliated agencies.
The greenhouse gas emissions allowance transaction system requires corporations to emit greenhouse gases only within the allowances they hold, and allows shortages or surpluses to be traded in the market.
Lim said, "Currently, Europe's allowance price is 120,000 won, and the United States is around 40,000–50,000 won," adding, "We will have to judge the appropriate price as we operate the system, but I believe it needs to be at least 20,000–30,000 won for the transaction system to be activated and for market functions to work."
Last year's allowance price was 10,600 won per ton, meaning the current price would have to double for the system to function properly. Assuming this year's allowance price is 20,000 won, 10 companies in steel, refining, cement, and petrochemicals are expected to spend 358.4 billion won to purchase allowances totaling 17,924,000 tons.
Minister Kim said, "Please build case studies on what changes occur depending on the allowance price," adding, "For example, if the allowance price reaches 20,000 won, collect cases such as a certain corporation taking action so that the positive functions of the transaction system can be better communicated to corporations."