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It has been pointed out that the carbon credit market, which is one of the government’s carbon neutral implementation plans, has not stabilized, and that the policy is not effective due to excessive reduction targets.
The Ministry of Environment’s Greenhouse Gas Information Center announced on the 3rd a survey conducted on companies subject to allocation for a month in September of last year through the ‘2019 Emissions Trading System Operation Result Report’.
According to the report, 70% of the respondents said that the transaction price of emission permits would increase from the base price of 21,700 won on September 18 last year. For that reason, they suggested the lack of quotas (80.5%) and the actual supply in the market (43.4%).
The trading volume of carbon credits was 38 million tons in 2019, a decrease of 9.3 million tons from a year ago, and the average price was 28,445 won, an increase of 6,325 won from the previous year. The reason for the soaring price of emission permits is that companies do not put surpluses on the market in preparation for rising prices.
As the supply-demand imbalance is intensifying, the industry has argued that emission permits are acting as uncertainty. An official in the chemical industry said, “Because of the nature of the industry, it is difficult to reduce carbon emissions unless the factory is closed, so if the price of carbon credits is predicted to rise, we have no choice but to equip them according to the market.” I’m trying to do it, but it’s difficult to be true.
Although the government is in a position that companies should make efforts to reduce carbon neutrality, companies agree that it is virtually impossible to develop technologies that meet the goals set by the government in a short period of time.
Experts pointed out that the government’s high reduction targets are lowering the effectiveness of the policy. Lim Jae-gyu, a senior researcher at the Energy Economics Research Institute, said, “Companies have no choice but to buy emission permits because it is difficult to reduce them, and if they have emission permits, the policy becomes less effective. ”Explained.
The government announced that it will reduce the greenhouse gas reduction targets (NDC) for 2030, which was submitted to the United Nations last year, by 24.4% compared to the emissions in 2017. It was set higher than the NDC submitted in 2015.
As the government has raised its GHG reduction target, it has entered a period of imprisonment for companies to achieve this. During the 3rd emission permit plan, which will be implemented for 5 years from this year, the paid allocation ratio has been greatly increased from 3% to 10%. Due to the nature of Korea, which has a large portion of the manufacturing industry, it is judged that carbon neutrality is difficult unless the efforts of the industry expand.
However, in the industry, regulations are continuously strengthening, and support measures for this are insufficient. An official from the oil refinery said, “It is expected that the reduction target will continue to be raised, but I am not sure if it is an effective goal. It seems that there is only a vision or slogan,” he said. “It is said that it supports companies, but there is no policy that touches it.”
Experts advised that for the effectiveness of carbon neutrality, support to the industry should be accompanied.
Lee Chang-seok, a professor of bio-environmental engineering at Seoul Women’s University, said, “The government’s reduction target does not include what part to reduce, so I have no faith in the effectiveness.” ”
Senior Researcher Lim also explained that “a system should be prepared to directly support the profits generated from the paid allocation and the emission trading system to companies participating in the emission trading system and use it to develop technologies for carbon neutrality.”
The government pointed out that it is difficult to agree with the point that the target value is excessive. An official from the Ministry of Environment said, “The reduction of greenhouse gases will be gradually achieved over the next 10 years. However, since the first one to two years, the amount of reduction is not much and will increase in the future, so it is difficult to regard it as an excessive goal.” Said.