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June 25, 2026 • 11:30 am - 12:30 pm est

The Cost of Power: Rising Electricity Prices, AI, and the Grid

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Event • Rayburn House Office Building, Room 2168 (Gold Room)
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The Cost of Power: Rising Electricity Prices, AI, and the Grid

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South Korea

Fact Sheet by Gautam Jain, Preetha Jenarthan, Victoria Prado + 1 more • June 17, 2026

This Country Framework is part of the Regulatory Frameworks for Project-Based Carbon Credit Markets. To learn more click here.

Overview

South Korea’s project-based carbon credit market (PCCM) is embedded within the Korea Emissions Trading System (K-ETS) through a statutory offsetting regime for external projects.1 The legal backbone of this regime is the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits (ETS Act) and its Enforcement Decree, which together define how greenhouse gas (GHG) reductions from external projects can be certified, registered in a dedicated offset registry, and converted into offset emission permits for surrender under the K-ETS.2

South Korea also operates a second, structurally distinct project-based crediting pillar: international mitigation activities implemented under Article 6 of the Paris Agreement. In the National Framework Plan for Carbon Neutrality and Green Growth,3 the government sets an explicit 2030 “international mitigation sector” contribution of reducing 37.5 million metric tons of carbon and frames delivery by (1) establishing implementation foundations (including project guidelines and a public-private support platform) and (2) identifying projects through bilateral agreements with key countries. This pillar is separate from the K-ETS domestic external offset framework and is oriented toward government-to-government cooperation and the transfer of mitigation outcomes for use toward South Korea’s national targets.

Under Articles 29–31 of the ETS Act,4 emission reductions from projects implemented in sectors or locations outside the K-ETS coverage but in line with international standards may be converted into tradable emission permits after approval and certification by the competent authority and registration in the Offset Registry System (ORS). These certified reductions are issued as Korean Offset Credits (KOCs), which can then be converted into Korean Credit Units (KCUs) for compliance use in the ETS.5

In practice, this forms a government-run, compliance-grade project-based crediting program rather than a free-standing voluntary carbon market standard. As of December 2024, South Korea had 317 registered methodologies (211 Clean Development Mechanism [CDM] and 106 domestic credits)6 and hundreds of registered projects.7 Project types range from fuel switching and industrial efficiency to renewable energy and certain land use activities, with forest carbon offset projects specifically governed by the Act on the Management and Improvement of Carbon Sink and allowed to feed into the K-ETS external project pipeline.

A distinctive South Korea-specific feature is that forestry-based project crediting is governed through a dedicated statutory framework under the Act on the Management and Improvement of Carbon Sink (administered by the Korea Forest Service), which establishes a forest carbon center, project registration procedures, third-party verification provisions, a forest carbon registry, credit validity rules, and explicit linkages for using forest carbon stock to offset targets, including the compliance targets.8

The Ministry of Environment has progressively tightened carbon credit use. In Phase 3 (2021–2025), entities could use carbon credits for up to 5 percent of their compliance obligation, down from 10 percent in earlier phases, and international credits were capped as a subset of that limit.9 Recent rule changes extended KOC validity from three to five years, and Phase 3 also opened the door to credits from Article 6 projects implemented by South Korean companies abroad, subject to forthcoming guidance.

South Korea is also one of the first movers on Article 6.2 implementation. In July 2025, South Korea and Cambodia launched a landmark Internationally Transferred Mitigation Outcomes (ITMO) project for e-mobility and charging infrastructure in Cambodia, authorized as the first Article 6.2 project under their bilateral partnership.10 These units are designed to be integrated into South Korea’s international carbon credit portfolio (international KOCs or ITMOs) and then into the K-ETS and nationally determined contributions (NDCs) accounting via the legal link in Article 36.11

I. Supply-Side Regulations

On the supply side, the core of South Korea’s domestic PCCM is the K-ETS offset or external project mechanism established under the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits.12 Under this mechanism, project developers implement external projects that generate certified GHG reductions,13 which are issued as offset-eligible reductions and can be converted by K-ETS compliance entities into offset emission permits and surrendered for compliance (i.e., project-based credits function as compliance-linked offsets once converted). The Act expressly allows an eligible entity to request conversion of GHG reductions from an external project into emission permits and requires those converted units to be registered in the statutory offset register.

South Korea’s supply-side eligibility is operationalized through (1) a statutory external project eligibility mechanism14 and (2) an official catalogue of approved methodologies. In practice, project eligibility is defined by the approved methodology inventory in the government registry system, which currently lists 317 methodologies (with sector tags such as forestry, carbon sinks, transport, waste, energy demand, and renewable energy production) and shows the effective date and registration status of each methodology.15

A. Regulatory Framework

  • Market Classification: South Korea’s PCCM supply is compliance-anchored; external project reductions become usable for the K-ETS only after government certification and conversion into offset emission permits that can be surrendered instead of allowances.

There is also a compliance-linked international mitigation cooperation Article 6.2 pillar that is distinct from domestic K-ETS offsets. Under the government’s National Framework Plan architecture, international mitigation is treated as a dedicated mitigation sector contributing to the national 2030 pathway rather than a domestic voluntary market.

  • Regulatory Status: The supply-side rules are legally anchored by a combination of the Act and presidential decree and implemented via binding administrative guidance for feasibility assessment, monitoring, verification, and certification.16
  • Binding Legal Foundation: The ETS Act defines emission permits and establishes the offset mechanism (Article 29), certification of external project reductions (Article 30), and the offset register (Article 31).17
  • Binding Operational Rules through Government Guidelines: The Act requires certification and conversion to follow guidelines prescribed by presidential decree, and the external project feasibility and certification guideline is issued as a formal administrative rule with cross-ministry versions and periodically updated (including updates referenced as recently as 2025).18
  • Key Authorities: Domestic external projects linked to the K-ETS offset framework:
  • Ministry of Climate, Energy and Environment (MCEE): As the competent authority, the MCEE converts external project reductions into emission permits (offset emission permits), certifies reductions, and maintains the ORS, which must be linked to the main permits register.19
  • Ministry of Trade, Industry and Resources (MOTIR): The MOTIR serves as the sectoral competent agency for industrial and energy sector external projects, coordinating with the MCEE on methodology approval and project certification. While the MCEE functions as the overall competent authority for the K-ETS and offset mechanism, the MOTIR implements project authorization and emission reduction certification for projects within its specific sectoral domains (industrial efficiency, energy production).20
  • Korea Forest Service (KFS): The KFS manages forest-based carbon offset projects under the Act on the Management and Improvement of Carbon Sink and coordinates with the MCEE on forestry external projects eligible for the K-ETS offset mechanism.21
  • Ministry of Agriculture, Food and Rural Affairs: This ministry manages agricultural soil carbon sequestration projects and coordinates with the Korea Chamber of Commerce and Industry (KCCI) Carbon Reduction Certification Center for agricultural offsets.22
  • Ministry of Oceans and Fisheries: This ministry serves as the sectoral competent agency for the fields of ports, marine, and shipping sectors’ external projects and coordinates with the MCEE on methodology approval and project certification.
  • Ministry of Land, Infrastructure, and Transport: This ministry serves as the sectoral competent agency for external projects related to fuel conversion and energy efficiency in buildings as well as low-carbon transportation, coordinating with the MCEE on methodology approval and project certification.
  • Korea Environment Corporation (K-ECO): The K-ECO reviews project design documents (PDD) and monitoring reports evaluated by each government department and requests the certification committee to review external project approval and emission reduction certification.23
  • Greenhouse Gas Inventory and Research Center of Korea (GIR): The GIR operates the government registry infrastructure (ORS) that publishes approved methodologies and supports project credit administration (methodology status, effective dates, etc.).24
  • National Institute of Environmental Research (NIER): The NIER accredits and supervises third-party verification bodies for K-ETS external projects pursuant to delegated authority from the MCEE; conducts regular comprehensive evaluations of verification bodies once per year, including on-site inspections and witnessed assessments to ensure verification quality and maintenance of qualifications; and may establish and publicly announce standards for calculating verification costs subject to ministerial approval and enforce administrative sanctions, including designation revocation or business suspension for non-compliance.25

International mitigation activities implemented under Article 6 of the Paris Agreement:

  • Office for Government Policy Coordination: This office publishes the National Framework Plan (April 2023) that sets the 37.5 million metric tons reduction target and implementation tasks for international mitigation.26
  • MOTIR: This ministry publicly describes and operationalizes Article 6.2 cooperation via authorized bilateral projects (e.g., the Cambodia project) and describes an investment support program launched in 2023.27
  • Korean Standards Association: Approved as a Designated Operational Entity under Article 6.4 mechanism in October 2025,28 this association is authorized to conduct project validation, verification, and Sustainable Development Goals impact assessment for Article 6.4 emission reductions.
  • Host-Country Authorities: These authorities provide formal authorization for projects under their national Article 6 governance framework (e.g., Cambodia’s Ministry of Environment issued a Letter of Authorization for the first project).
  • Sanctions:
  • Registry Account Suspension: The Korea Offset Registry System can suspend or freeze accounts for criminal purposes (e.g., money laundering, fraud, or tax evasion),29 repeated unauthorized access attempts, unfair trading practices related to offset credits, or pending investigation of project violations.
  • Cancellation of Korean Offset Credits: If verification fails or is found to be fraudulent, project information is false, misleading, or incomplete, or a project breaches program documentation or legal requirements, KOCs can be cancelled.
  • Criminal Penalties for Fraud in External Project Certification: A person who obtains certification of GHG reductions from an external project by fraud or other illegal means shall be punished by a fine not exceeding KRW 100 million (approx. USD 68,900);30 where three times the amount of profits obtained or losses avoided as a result of such violation exceeds KRW 100 million, the person shall be punished by a fine not exceeding three times the amount of such profits or avoided losses. 31

B. Credit Generation Standards

  • Eligible Activities: For the K-ETS offset framework, eligible project types are defined by 317 government-approved methodologies (as of December 2025)32 across multiple sectors:
  • Forest and Land Use (Carbon Sink Management and Improvement): Forest creation and afforestation projects, forest restoration and reforestation after disasters, and sustainable forest management
  • Energy Industry (Renewable Energy Production): Solar photovoltaic systems, wind power generation, and geothermal energy production
  • Energy Demand: Energy efficiency improvements (e.g., insulation, HVAC upgrades), industrial energy efficiency, and heat pump installations
  • Transport: Electric vehicle deployment and charging infrastructure, fleet electrification for public transport, freight, rail, and maritime
  • Industrial Processes: Fuel conversion (e.g., coal to natural gas, biomass, or renewable energy) and carbon capture and storage projects

Eligible activities under South Korea’s Article 6 pillar are defined through bilateral cooperative agreements with host countries and participation in the Article 6.4 centralized mechanism. As of April 2026, South Korea has signed more than 10 bilateral Article 6.2 agreements, including with Ghana (March 2022, authorization for sustainable cookstoves and charcoal projects),33 Indonesia (June 2024, projects not yet specified), and Cambodia (July 2025, e-mobility and charging infrastructure). In May 2025, the South Korean government selected six carbon reduction projects for Article 6 financial support, though project-specific details remain undisclosed.34

  • Methodology Framework:

For the K-ETS offset framework, each approved methodology operates under a formal regulatory framework that sets requirements for additionality, baseline determination, permanence, leakage assessment, and measurement, reporting, and verification (MRV). South Korea uses two parallel methodological systems:35

  • CDM-Based Methodologies (211 methodologies): International methodologies adopted from the United Nations Convention on Climate Change (UNFCCC) Clean Development Mechanism, including
  • approved CDM methodologies adapted for domestic use,
  • CDM baseline and monitoring methodologies, and
  • sector-specific CDM tools and guidelines.
  • Domestic South Korean Methodologies (106 methodologies): Domestically developed methodologies for
  • activities not covered by the CDM (e.g., domestic building efficiency, South Korean forest types),
  • projects tailored to the South Korean regulatory context, and
  • simplified methodologies for small-scale projects.

For international mitigation activities implemented under Article 6 of the Paris Agreement, projects utilize methodologies approved by host countries in accordance with UNFCCC guidance, including adapted CDM methodologies such as AMS-III.C for the Cambodia e-mobility project. Article 6.4 projects will employ centralized methodologies approved by the Article 6.4 Supervisory Body.36 South Korea submitted views to the UNFCCC in April 2023 supporting the development of simplified baseline and monitoring methodologies for Article 6.4 to reduce transaction costs, particularly for small-scale and least-developed country projects.

  • MRV Requirements: External projects under South Korea’s K-ETS offset mechanism must undergo structured measurement, reporting, and verification by independent third-party verification bodies accredited by the NIER. Project proponents submit monitoring plans with their PDD for project registration and are required to produce annual monitoring reports documenting emissions reductions or removals according to approved methodologies. Certified emission reductions (KOCs) are then issued following independent verification of the monitoring report and certification by the competent authority, with documented QA-QC procedures ensuring data accuracy. Independent verification must comply with ISO 14065:2020 and ISO 14064-3:2019, and verification bodies must conduct mandatory on-site inspections before submitting verification reports to the MCEE and relevant sectoral agencies. Following technical review by the MCEE and sectoral competent agencies (such as the KFS for forestry projects), certification is issued for verified reductions, and KOCs are registered in the government-operated ORS maintained by the GIR. The NIER supervises all accredited verification bodies and enforces minimum fee schedules to ensure verification quality and prevent inadequate due diligence.37
  • Registry System: South Korea’s statutory offset framework mandates the government-operated ORS38 managed by the GIR to register, track, and manage certified reductions from external projects. The ORS is linked to the main Emissions Trading Registry System (ETRS), enabling seamless integration between offset credit issuance and compliance surrender. The registry maintains electronic records of all KOCs, including project identification, certified reduction quantities, verification body details, certification dates, and credit vintages with specified validity periods (currently five years). The ORS is integrated with the National GHG Management System (NGMS) to prevent double counting between domestic offset credits and international credits (CDM or Article 6 units) and coordinates with the Korea Exchange (KRX) to track trading activities and ensure proper accounting of KOC to KCU conversions.39 Public disclosure functions include publishing approved methodologies, project lists, certified reduction volumes, and offset credit issuance data to ensure transparency.

C. Integrity Principles

  • Additionality Tests: Projects must demonstrate additionality through a structured evaluation process as defined in Article 14 of the external business feasibility assessment guidelines.
  • Legal and Institutional Additionality: Mandatory for all projects. The project must go beyond legal and regulatory requirements and cannot be mandated by existing South Korean or international law.
  • Economic Additionality: Mandatory for projects with estimated annual GHG reductions of 60,000 tCO₂-eq or more. These projects must demonstrate financial barriers or that the project would not be economically viable without carbon credit revenue. For small-scale projects (below 60,000 tCO₂-eq/year), this evaluation is not mandatory, simplifying the process to reduce administrative burden.
  • Permanence Safeguards: South Korea employs differentiated crediting periods for general projects and for agriculture, forestry, and other land use projects. Forestry projects under the Act on the Management and Improvement of Carbon Sink must implement long-term forest management plans with operating standards conforming to UNFCCC norms,40 and forest carbon stock validity periods are prescribed by presidential decree based on project type and size. A mandatory risk buffer system requires 10–30 percent of issued credits to be withheld in pooled buffer accounts, calculated based on a structured assessment of project implementation risks in accordance with Annex 10 (Project Implementation Risk Analysis and Forest Buffer Operation Standards) of the Guideline on Feasibility Assessment and Certification of Emission Reductions for External Projects. Project proponents bear strict liability for intentional reversals and must compensate through credit retirement or cash payment within 30 days, with non-compliance triggering account suspension. For K-ETS external projects, annual monitoring and periodic re-verification by NIER-accredited verification bodies ensure ongoing compliance for forestry projects under the K-ETS offset mechanism.41 The Forest Carbon Offset Scheme (FCOS) is operated by the Forest Carbon Center under the Act on the Management and Improvement of Carbon Sink. This institutionally distinct program employs designated verification agencies to conduct document reviews and field surveys. The center holds the authority to revoke project registration or certification if documents or monitoring reports are falsely stated. 42
  • Quantification Standards: Project-level emission reductions or removals must be quantified using one of 317 government-approved methodologies registered in the ORS. The 317 approved methodologies referenced here specifically refer to methodologies eligible for use in external projects under the K-ETS: 211 adapted UNFCCC CDM methodologies and 106 domestic South Korean methodologies for activities not covered by the CDM.43 Under the FCOS, projects registered under the Act on the Management and Improvement of Carbon Sink must use operating standards established by the KFS that conform to UNFCCC and international norms. These standards cover afforestation, reforestation, forest management, harvested wood products, forest biomass energy, and the monitoring and verification of forest carbon stock. Forestry projects intended for K-ETS compliance use methodologies and standards under the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits, distinct from the Forest Carbon Center’s voluntary program.44
  • Double-Counting Prevention: South Korea operates the government-run ORS and the Forest Carbon Registry as separate and independent systems with no direct technical linkage. Instead, double-counting prevention is addressed through rigorous evaluation procedures conducted during the external project registration process to ensure no duplicate issuance or claims occur across the two frameworks. The ORS,45 operated by the GIR, assigns unique serial numbers to all KOCs for K-ETS external projects, logging all issuance, conversion (KOCs to KCUs),46 transfer, surrender, and cancellation events with time stamps. The ORS is linked to the ETRS as mandated by Articles 3147 and 41 of the ETS Act and Enforcement Decree, ensuring seamless tracking across credit and allowance pools. The Forest Carbon Registry operated by the KFS under Article 24 of the Carbon Sink Act48 manages forest carbon stock information, with forest carbon stock loss effects being recorded when used as offset outcomes or upon validity expiration to prevent double use. Persons trading forest carbon stock must register trading accounts and credits in the Forest Carbon Registry, paying registration fees per ton of CO₂. Integration with the NGMS prevents double counting between domestic projects and international offset credits (CDM, Article 6 ITMOs),49 with cross-checks ensuring no project is registered in multiple programs.

D. Sustainable Development

  • Co-Benefits: Co-benefits are not formally required to issue KOCs under the K-ETS external project framework, but both statutory frameworks emphasize wider environmental, social, and economic outcomes. The Act on the Management and Improvement of Carbon Sink explicitly requires forest carbon offset activities to deliver multiple benefits beyond carbon sequestration, including biodiversity conservation, rural development, water quality improvement, recreational use, and support for local economies. Forest carbon offset projects must promote sustainable forest management aligned with international forestry norms and emphasize social, economic, and environmental benefits centered on residents and societal welfare, including health promotion, quality of life improvement, and the pursuit of happiness for all citizens through forest welfare programs.50 While co-benefits do not affect carbon crediting quantities or offset conversion eligibility, project developers frequently report them to buyers and government agencies, and South Korea’s Fifth National Biodiversity Strategy (2024–2028) explicitly encourages nature-positive and community-positive project outcomes through ecosystem services enhancement, improved public access to nature’s benefits, and sustainable use of genetic resources with benefit-sharing.51
  • Net-Zero Compatibility: South Korea’s overarching climate framework, anchored in the Framework Act on Carbon Neutrality and Green Growth for Coping with Climate Crisis (enacted September 24, 2021),52 legally commits the country to carbon neutrality (net-zero GHG emissions) by 2050 and establishes binding 2030 NDCs with enhanced emissions reduction targets. The 2050 Carbon Neutral Strategy (December 2020) positions domestic nature-based solutions, particularly forest carbon sink management, afforestation, reforestation, forest restoration, urban green space creation, coastal wetland restoration, and sustainable forest management, as critical contributions to South Korea’s long-term decarbonization pathway.53 The government plans to maintain forest carbon removals at the highest level possible through innovative forest management, changing tree species, implementing forest health programs, restoring degraded forestlands, and planting trees on underutilized lands to increase carbon stocks and offset 26.7 million metric tons of CO₂ emissions through nature-based solutions by 2030.54

II. Demand-Side Regulations

A. Use Authorization Framework

  • Applications Allowed: For domestic external projects linked to the K-ETS offset framework, the following apply:
  • Compliance Integration: Project-based credits from external projects and forest carbon offset programs may be used for K-ETS compliance after conversion from KOCs to KCUs.55 KOCs represent certified reductions from domestic or international external projects registered in the ORS, while KCUs are compliance-grade units eligible for surrender. Covered entities under the K-ETS may use carbon credits for up to 5 percent of their annual compliance obligation (reduced from 10 percent in Phases 1–2 to 5 percent in Phases 3–4, 2021–2030), regardless of whether credits are domestic or international. KOCs must be converted to KCUs within five years of KOC issuance to maintain eligibility for compliance use. For the 2024 compliance period, 1.9 million KOCs (1.7 million domestic, 0.2 million international) were converted to KCUs, and over 71,000 were surrendered for compliance.56
  • K-ETS Compliance: For forestry projects specifically, only those registered as external projects under the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits can generate KOCs convertible to KCUs for K-ETS compliance.
  • Voluntary Use: Forest carbon stock certified under the Act on the Management and Improvement of Carbon Sink operates as an institutionally distinct scheme. While these achieved-reduction type credits represent verified carbon benefits, they are certified in the Forest Carbon Registry and are not eligible for surrender to satisfy K-ETS compliance obligations.
  • Voluntary Claims: South Korean companies, financial institutions, and individuals may voluntarily purchase and retire project-based carbon credits, including forest carbon stock from domestic forestry projects, agricultural offsets from KCCI Carbon Reduction Certification,57 and eligible international standards (e.g., Verified Carbon Standard, Gold Standard, and CDM), to support climate finance objectives, achieve corporate net-zero pledges, or make climate-related claims. Forest carbon stock may be used for a social contribution-type forest carbon offset by participating in voluntary projects to reduce GHG and save energy, with relaxed standards prescribed by presidential decree compared to compliance-grade offsets. The South Korean government is establishing a voluntary carbon exchange (announced in September 2025) operated by Korea Exchange in collaboration with Xpansiv to enable trading of certified voluntary carbon credits, expand demand beyond K-ETS compliance obligations, and support corporate environmental, social, and governance (ESG) strategies and 2050 carbon neutrality commitments.58
  • NDC Alignment: Emission reductions and removals from South Korean domestic projects, including external projects under the K-ETS offset mechanism and forest carbon offset projects under the Act on the Management and Improvement of Carbon Sink, are accounted for in South Korea’s national GHG inventory and contribute to its NDC under the Paris Agreement (40 percent emission reduction below 2018 levels by 2030, with 37.5 million international credits targeted for NDC achievement).59 The South Korean government does not apply corresponding adjustments to voluntary credit purchases or retirements from domestic projects, meaning the underlying mitigation continues to contribute to the country’s NDC rather than to private voluntary claims. For international credits used for K-ETS compliance or voluntary retirement, South Korea is implementing Article 6 of the Paris Agreement, including bilateral cooperative agreements under Article 6.2, requiring corresponding adjustments to prevent double counting where the host country authorizes transfer of ITMOs and adjusts its GHG inventory accordingly.

For international mitigation activities implemented under Article 6 of the Paris Agreement:

  • NDC Alignment: Official government sources frame international mitigation outcomes as a tool to support South Korea’s national mitigation pathway. The MOTIE’s official description of South Korea’s first Article 6.2 project states that 400,000 tons of the project’s expected reductions will be transferred to South Korea and counted toward its NDC.60
  • Regulatory Status:
  • Compliance Use: The K-ETS establishes legal obligations permitting covered entities to use project-based carbon credits for statutory compliance. Under Article 2961 of the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits, external project reductions certified as KOCs may be converted to KCUs and surrendered to satisfy compliance obligations.62 Covered entities can replace one compliance unit per ton of carbon dioxide equivalent (tCO₂e) emitted, with carbon credits allowed up to 5 percent of each entity’s annual compliance obligation (Phase 3–4, 2021–2030), regardless of whether credits are domestic or international.63
  • Guidance-Based Voluntary Use: Currently, there are no official government guidelines or binding regulations governing corporate use of voluntary carbon credits beyond compliance obligations, though the subject remains under active discussion by relevant authorities. The Ministry of Economy and Finance (MOEF) outlined the Korean Carbon Credit Activation Plan (August 2025), emphasizing robust verification, certification measures to prevent greenwashing, transparency in the market, and active private sector participation.64 The planned Korea Exchange voluntary carbon exchange will enable trading of certified voluntary carbon credits, expanding demand beyond the K-ETS compliance scope to support corporate ESG strategies and net-zero pledges.
  • Oversight Bodies:
  • MOEF and MCEE: The MOEF initially set the policy direction for voluntary and compliance carbon markets through the Korean Carbon Credit Activation Plan. Following the renaming of the Ministry of Environment to the MCEE in October 2025, overall policy authority for climate and carbon markets was consolidated under the new ministry, which now oversees the implementation of these frameworks, emphasizing robust verification, anti-greenwashing measures, and transparency. The MCEE65 consolidates climate, energy, and environmental policy, including carbon markets, and establishes principles for corporate net-zero credit use, double-counting prevention, and alignment with Article 6 of the Paris Agreement.
  • Korea Fair Trade Commission (KFTC): The KFTC enforces consumer protection law through the Act on Fair Labeling and Advertising, requiring environmental claims (e.g., carbon neutral, net-zero, and eco-friendly) to be truthful, substantiated, and not misleading. Following revised environmental advertising guidelines (August 2023),66 the KFTC issued its first greenwashing warnings to fashion brands (May 2025)67 for unsubstantiated eco-claims. Under the proposed Amendment to the Environmental Technology Act, the MCEE will gain authority to fine companies up to KRW 3 million (USD 2,070)68 for misleading environmental claims, positioning South Korea as an emerging nation with dedicated anti-greenwashing legislation.69
  • Financial Services Commission (FSC): The FSC regulates sustainability-related claims by financial institutions and Korea Composite Stock Price Index (KOSPI)-listed companies. It also mandates ESG disclosure for KOSPI companies with assets valued at over KRW 2 trillion, extending to all KOSPI companies by 2030.70
  • Financial Supervisory Service and Korea Financial Investment Association: This association introduced the Guidelines on ESG Bond Certification and Evaluation (January 2023) and Guidelines on ESG Fund Disclosure (effective December 2023) to prevent greenwashing in financial markets. These standards require credit rating agencies and asset managers to ensure sustainability claims are fair, clear, and substantiated by verifying the use of proceeds and disclosing investment strategies.71
  • Korea Exchange: The KRX operates the K-ETS compliance trading platform and is launching a voluntary carbon exchange in collaboration with Xpansiv.72 It provides market infrastructure, price discovery, transaction settlement, and trading oversight, and enforces listing requirements and market surveillance to prevent manipulation for both compliance and voluntary markets.
  • Greenhouse Gas Inventory and Research Center of Korea: The GIR operates the ORS and the ETRS.73 It also maintains transaction records, assigns unique serial numbers, and implements sanctions for fraud―including account suspension, credit cancellation, and project de-registration, pursuant to Article 41 (Penalties) of the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits—while providing public disclosure of methodologies and certified reductions to prevent double counting.74
  • Standards Integration: South Korea does not legally mandate the use of the Science Based Targets Initiative (SBTi), Voluntary Carbon Markets Integrity Initiative, or Integrity Council for the Voluntary Carbon Market but actively engages with international integrity frameworks. The country’s 2050 Carbon Neutral Strategy and Framework Act on Carbon Neutrality align with Paris Agreement Article 6 requirements for international offset use.
  • Enforcement Mechanisms: South Korea employs a multi-layered enforcement regime. Under Article 33 of the ETS Act,75 covered entities may use KOCs to meet up to 5 percent of their K-ETS compliance obligations.76 Entities that fail to surrender sufficient units are subject to administrative fines of up to KRW 100,000 (USD 68,900)77 per tCO₂e.
  • Consumer Claims: The KFTC enforces the Act on Fair Labeling and Advertising against greenwashing, requiring environmental claims (e.g., carbon neutral, net-zero, and eco-friendly) to be truthful and substantiated.78
  • Financial Sector: The Financial Services Commission and Korea Sustainability Standards Board regulate sustainability-related claims by FSC-authorized firms and KOSPI companies, requiring ESG disclosures, including carbon credit use, to be fair, clear, and substantiated (mandatory from 2026 for large KOSPI companies).79

B. Corporate Use Requirements

  • Mitigation Hierarchy: South Korea has no statutory reduce-first mandate requiring companies to cut internal emissions before using offsets.
  • Scope Coverage: South Korea has no legal prescription limiting which emission scopes (1, 2, or 3) may be offset through voluntary claims.
  • Quality Standards: South Korea has no binding list of approved programs or methodologies for voluntary corporate use. The 317 registered methodologies in the ORS (211 CDM, 106 domestic)80 are subject to approval by the MCEE and sectoral agencies; domestic forest carbon credits under the Act on the Management and Improvement of Carbon Sink must conform to UNFCCC and international norms (Art. 27).81
  • Accounting Treatment: South Korea does not currently mandate disclosure of carbon credit use in corporate climate reporting under the Korea Sustainability Standards Board (KSSB) climate standard (KSSB 2, aligned with International Financial Reporting Standards [IFRS] S2).82 Mandatory disclosures focus on gross emissions (Scopes 1–2 and, where material, Scope 3), targets, transition plans, and internal carbon pricing, without requiring credits to be disclosed or separated from emissions totals.

C. Transparency and Assurance

  • Public Reporting:
  • There is no clear, standalone South Korean legal requirement that mandates separate disclosure of carbon credit volumes or types used to achieve net claims in corporate reporting.
  • Mandatory climate disclosure is emissions-focused (not carbon offset use–focused). South Korea’s upcoming mandatory sustainability disclosure regime is being built on KSSB 1 (general) and KSSB 2 (climate), aligned to IFRS S1 and S2, with climate disclosures becoming mandatory from 2026 on a phased basis for listed firms under the Financial Services Commission road map. KSSB 2 requires disclosure of absolute gross Scope 1 and Scope 2 emissions (and Scope 3 as applicable).83 KSSB 2 requires companies to disclose whether and how they use internal carbon pricing to manage climate risks or opportunities.
  • Third-Party Verification:
  • Since South Korea does not currently require carbon credit use disclosures as a standard corporate reporting item, there is no corresponding mandatory assurance requirement specifically for carbon credit usage statements.
  • Market readiness assessments note that a large majority of South Korean companies already have third-party verification of emissions data, reflecting stronger controls around emissions reporting accuracy (in terms of emissions assurance, not offset disclosure).84
  • Science-Based Targets: South Korea has no legal requirement for companies to obtain SBTi validation. However, KSSB 2 requires companies to disclose climate targets and progress, with an implicit expectation that targets align with the Paris Agreement’s 1.5°C pathways.
  • Policy Advocacy: South Korea does not impose any legal rule requiring companies to purchase a minimum volume or type of project credits. Demand for project-based credits is primarily created indirectly via K-ETS offset use rules (limits on surrender), rather than an obligation to buy credits.

D. Market Integrity Protection

  • Anti-Greenwashing: The KFTC, the primary anti-greenwashing authority, enforces the Act on Fair Labeling and Advertising, under which false, exaggerated, or misleading environmental claims are prohibited. This applies to all commercial environmental claims, including claims such as carbon neutral, net-zero, and low-carbon, or claims implying emissions have been offset. The commission has also registered complaints against major energy companies for carbon offset greenwashing. SK Lubricants Co. faced greenwashing allegations for advertising products with unreliable carbon-offsetting projects, and SK E&S faced complaints for falsely marketing liquefied natural gas from its Barossa project as CO₂-free when only a limited amount of upstream emissions were offset, as the company failed to account for combustion emissions and relied on carbon credits that activists deemed inadequate.85
  • Co-Benefits Delivery: South Korea does not require buyers of project-based credits to select projects with biodiversity, social, or community co-benefits. The Carbon Sink Act structurally recognizes social and environmental value in forest carbon projects, but this does not translate into a buyer-side mandate or claim requirement.

III. Market-Side Regulations

A. Infrastructure Framework

  • Market Structure:
  • The K-ETS compliance market, one of the world’s largest, facilitates trading of Korean Allowance Units (KAUs), KOCs, and KCUs through the KRX, the exclusive auctioning and secondary trading venue for emissions allowances covering over 80 percent of national emissions. The KRX manages the spot secondary market platform where allowances, KCUs, and KOCs are traded for different vintage years.
  • NH Investment & Securities was designated as the first brokered emissions trading provider to allow third-party participants―such as financial institutions, investment entities, and pension fund operators―to join.86 Meanwhile, the ETRS and ORS facilitate seamless transaction processing.
  • For voluntary carbon credits, South Korea is launching the KRX Carbon Credit Market in a strategic partnership with Xpansiv (operator of the world’s largest voluntary carbon spot exchange, CBL).87
  • Registry Operations: South Korea operates two integrated but distinct government registry systems. The ETRS88 is operated by the GIR.89 The MCEE serves as the official electronic record for K-ETS compliance units (KAUs, KCUs) and covered entity accounts, tracking allocations, auctions, secondary market transactions, banking or borrowing, and compliance surrender. The ORS, also operated by the GIR, records all domestic and international external project registrations, certified reductions (KOCs), conversion to compliance units (KCUs), transfers, and retirements. The ORS lists project and unit-level information, including project status, methodology, verification body, certified reduction volumes, and credit vintage years, providing a publicly viewable ledger. The ETRS and ORS are organically linked as mandated by Articles 31 and 41 of the ETS Act,90 ensuring offset credits converted from KOCs to KCUs are tracked across both registries without double counting. The relay management system developed by Koscom connects the GIR, the KRX, securities firms, the ETRS, and the ORS through dedicated servers, networks, and data-verification protocols, creating an integrated “cradle-to-retirement” ledger infrastructure.91 South Korea’s registries include trading venue integration; while the ORS itself does not facilitate trading, KOCs registered in the ORS can be traded over-the-counter (OTC) bilaterally, then settled through registry transfers or converted to KCUs and traded on the KRX exchange, with all transactions automatically recorded across linked registry systems.
  • Data Standards: South Korea applies rigorous data standards across compliance and voluntary markets aligned with international norms. MRV for external projects is conducted under ISO 14065:2020 (requirements for GHG validation and verification bodies) and ISO 14064-3:2019 (specification for verification and validation of GHG statements) via NIER-designated verification bodies,92 ensuring data feeding into the ORS issuance meets internationally recognized assurance standards. For forest projects, the Korea Forest Service mandates operating standards conforming to UNFCCC and international norms (Art. 27 Carbon Sink Act), with MRV systems measuring, reporting, and verifying forest GHG emissions using country-specific biomass expansion factors for 22 tree species.93 At a broader carbon market level, South Korea is developing cross-market data frameworks, including integration with Xpansiv’s CBL platform (which has traded over 250 million tCO₂e since 2020), and exploring blockchain-based registry architecture to enhance transparency, prevent double counting, and enable automated smart-contract settlement.94

B. Trading and Participation

  • Eligibility Rules:
  • Compliance Market: Participation in South Korea’s carbon markets requires opening accounts in the ORS or ETRS operated by the GIR. For the compliance market (K-ETS), covered entities automatically have ETRS accounts; non-covered entities (e.g., financial institutions, asset managers, and retail investors) may participate via secondary market trading on the KRX or through consignment trading (launched in 2025). Financial intermediaries must be approved by the MCEE before participating. As of December 2025, 21 intermediaries were approved.95 Following regulatory reforms in November 2025, South Korea opened carbon trading to securities firms through brokered trading, significantly expanding market participation beyond the original 21 approved intermediaries.96
  • Voluntary Market: The KRX Carbon Credit Market will permit broader participation from companies, financial institutions, and individuals; registry account opening requires organization details, tax identification, and acceptance of registry terms and conditions.97
  • Offset Credits: Korean Offset Credits can be traded among ETS and non-ETS entities bilaterally. Also, both KOCs and KCUs can be traded on the KRX exchange.
  • Trading Mechanisms:
  • South Korea operates a compliance-anchored carbon trading system under the K-ETS, with trading of allowances (KAUs) and compliance-eligible offset credits (KCUs) conducted primarily through the KRX and settled via official registries (the ETRS or ORS). Spot trading occurs both on the organized exchange and through permitted OTC transactions, with all trades requiring registry settlement and account holder status.
  • South Korea is exploring (but has not yet operationalized) a centralized voluntary carbon market platform and potential derivatives such as allowance futures; exchange-based trading of voluntary credits, Article 6 ITMOs, or Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) units is not yet legally established. All trades require registry account holder status, and no off-registry assignment mechanism exists.98
  • Settlement Systems: Settlement of exchange-traded allowances, KCUs, and KOCs occurs on the KRX with real-time clearing; units are electronically transferred in the integrated registry system (the ETRS or ORS) with unique serial numbers and vintage linkage recorded. OTC bilateral trades are settled privately and then recorded in the government registries to ensure ownership transfer and prevent double counting.99
  • Price Discovery: South Korea has no mandatory transaction-level price reporting for KOCs or KCUs. Price discovery mechanisms include KRX spot exchange prices for allowances and KCUs published daily; Platts Carbon Markets pricing (effective January 16, 2024)100 for KOC 25―27 and future vintages reflecting market-based won/tCO₂e valuation; and OTC bilateral prices for KOCs negotiated privately between project developers and buyers.
  • Oversight Authority:
  • MCEE oversees K-ETS compliance and external project offsets and consolidates climate, energy, and environmental policy, including carbon markets. It also establishes principles for corporate net-zero credit use, double-counting prevention, and alignment with Article 6 of the Paris Agreement.
  • FSC regulates sustainability-related claims by financial institutions and KOSPI-listed companies and mandates ESG disclosure for KOSPI companies with KRW 2 trillion+ in assets from 2026, extending to all KOSPI companies by 2030.101 The Korea Sustainability Standards Board released interim standards in October 2025 that are aligned with IFRS S1/S2 and require climate-related disclosures, including Scope 3 emissions. FSC Guidelines on ESG Bond Certification (January 2023) and ESG fund disclosure standards (December 2023) prevent greenwashing in financial markets, requiring sustainability claims to be fair, clear, and substantiated.102
  • KRX operates the K-ETS compliance trading platform and will be launching a voluntary carbon exchange through a strategic partnership with Xpansiv, signed in September 2025.103 It provides market infrastructure, price discovery, transaction settlement, and trading oversight, and enforces listing requirements and market surveillance to prevent manipulation for both compliance and voluntary markets.
  • GIR operates the ORS and ETRS,104 maintains transaction records, assigns unique serial numbers, implements sanctions for fraud (account suspension, credit cancellation, project de-registration), and provides public disclosure of methodologies, projects, and certified reductions to prevent double counting.
  • NIER accredits verification bodies and monitors MRV compliance under ISO standards.
  • Legal Classification:
  • Registry-Based Property Rights: Emission permits (including offset emission permits) exist only as electronic registry entries; they have no physical form, and their legal existence depends on registration in the government-operated registry system.105 Each unit of certified GHG reduction from an external project converts to one offset emission permit representing 1 tCO₂e.106 Offset emission permits are transferable and may be traded, but only liable entities under the K-ETS can convert KOC into KCU for compliance surrender.107 The legal framework distinguishes between domestic offset emission permits (from domestic external projects) and international offset emission permits (from CDM, Article 6.4, Article 6.2 ITMOs).108 Emission permits are not classified as financial investment products under Korean financial law, but their derivatives are regulated under the Financial Investment Services and Capital Markets Act.109 Upon surrender for compliance, offset emission permits are permanently cancelled and removed from circulation.110
  • K-IFRS (Korean-Adopted IFRS) for Listed Companies and Major Unlisted Companies: There is no Korea-specific accounting standard for carbon credits, whether compliance or voluntary. Accordingly, companies apply general K-IFRS principles,111 with classification depending on the purpose and intent of holding. While South Korea’s sustainability disclosure regime under KSSB will mandate disclosure of gross emissions, targets, transition plans, and internal carbon pricing from 2026, it does not currently require disclosure of carbon credit use or mandate separation of credits from emissions totals. Treatment of carbon credits, therefore, remains governed by accounting policy and general disclosure principles rather than carbon market-specific accounting rules.112

C. Market Integrity Safeguards

  • Anti-Manipulation and Fraud Prevention: South Korea’s project-based carbon market relies on serialized registry systems (the ETRS, ORS, and Forest Carbon Registry) that prevent double issuance and double counting through unique serial numbers, immutable transaction records, and organic linkage across integrated platforms. Fraudulent behavior, including selling nonexistent units, misrepresenting credit ownership, or submitting false verification documents, falls under the Criminal Act (theft, fraud, forgery) with imprisonment of up to 10 years and fines of up to KRW 100 million.113
  • Transparency and Reporting Requirements: The Korea Exchange publishes daily spot prices for KAUs and KCUs with high, low, and closing prices and transaction volumes. Platts Carbon Markets publishes daily KOC pricing benchmarks (effective January 16, 2024)114 for KOC 25―27, KOC 26-28, and KOC 27-29 vintages reflecting market-based valuation.

D. Financial and Cross-Border Integration

  • Financial Regulation Integration: South Korea does not classify KOCs or forest carbon stock as financial products by default. However, carbon credit activities fall within the Financial Service Commission regulatory perimeter when structured as investment products, collective schemes, or fund strategies. South Korea’s tax authority has not published comprehensive VAT guidance on voluntary carbon credits.
  • Cross-Border Trading Framework: South Korea actively pursues Article 6.2 bilateral agreements enabling ITMO transfer with corresponding adjustments to prevent double counting. As of April 2026, South Korea had signed 10 bilateral Article 6.2 cooperation agreements with multiple countries.115 The government is targeting 37.5 million international carbon credits from Article 6 projects to support its 2030 NDC (40 percent emissions reduction from 2018 levels).
  • Corresponding Adjustments: When South Korea transfers ITMOs to buyer countries under Article 6.2, the government deducts transferred emissions from the country’s NDC accounting to prevent double claims, ensuring high environmental integrity.
  • Domestic Project Accounting: Mitigation achieved through domestic K-ETS external projects and forest carbon offsets continues to count toward South Korea’s NDC even when credits are sold to private corporate buyers. South Korea applies no corresponding adjustments for domestic credits exported voluntarily, consistent with UNFCCC guidance that credits not transferred internationally remain in the host country’s NDC accounting.

E. Regulatory Advancement Development Road Map

  • Infrastructure Plans: South Korea is building a centralized exchange-based architecture rather than a decentralized voluntary market infrastructure.
  • KRX Carbon Credit Market: This is a centralized exchange for voluntary credits, Article 6 ITMOs, and CORSIA credits, with real-time price discovery and integrated settlement via a relay management system.116
  • Cross-Market Data Standards: The MCEE is developing interoperability protocols enabling seamless integration between the ETRS (compliance), the ORS (external projects), the Forest Carbon Registry (forestry), and the KRX voluntary platform.117
  • International Cooperation: South Korea actively participates in Article 6 Paris Agreement implementation with clear strategic positioning. As of April 2026, 11 bilateral Article 6.2 agreements have been signed with corresponding adjustment mechanisms to prevent double counting. South Korea is targeting 37.5 million carbon credits from Article 6 projects to support its 2030 NDC (40 percent reduction from 2018).118
  • Regulatory Evolution: South Korea’s regulatory evolution is centered on integrating carbon markets into compliance trading and climate disclosure, rather than mandating carbon credit transparency. KSSB 2 (phased from 2026) will require disclosure of gross emissions, targets, transition strategies, and internal carbon pricing, but does not mandate separate reporting of carbon credit use.119 Project-based credits are integrated into the compliance market via conversion into KCUs under the K-ETS, which trades on the KRX, while voluntary credit markets remain underdeveloped. The Financial Services Commission has enabled security token offerings, but carbon credit tokenization remains exploratory. South Korea currently lacks an engineered removals standard, with policy emphasis on nature-based sinks, and no binding requirement yet exists to mainstream carbon credit use into regulated financial reporting.
  • Enforcement Enhancement: Enforcement of market integrity is strengthening across consumer protection, environmental, and ETS authorities. The KFTC120 remains the primary enforcer against greenwashing under the Act on Fair Labeling and Advertising, supported by revised Environmental Labeling and Advertising Review Guidelines (2023) that require substantiated and non-misleading environmental claims.121 The MCEE enforces administrative sanctions for misleading environmental information under sector-specific environmental statutes. In financial markets, the FSC oversees disclosure accuracy for ESG-labeled securities and funds.122 Within the K-ETS, the Korea Exchange conducts market surveillance for abnormal trading, while criminal and administrative penalties apply under the ETS Act and general criminal law for false certification, fraud, or obstruction. Registry operators (the ETRS, ORS, and Forest Carbon Registry) may suspend accounts, cancel credits, or de-register projects for non-compliance.123

References

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  2. Ecoeye, “Offsetting in the Korea Emission Trading Scheme,” PMI Climate, Presentation for: ICAP & PMI Asia and Pacific ETS Training Course, October 2023, 8,https://www.pmiclimate.org/sites/default/files/2023-11/Offsetting%20in%20ETS%20-%20Ecoeye.pdf. ↩
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  12. Ibid., Articles 29–31. ↩
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  14. Ibid. ↩
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  19. Ibid., Article 38. ↩
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  64. Green Earth, “South Korea to Launch Voluntary Carbon Exchange,” August 27, 2025, https://www.green.earth/news/south-korea-to-launch-voluntary-carbon-exchange. ↩
  65. Chia-Erh Kuo, “South Korea Environment Ministry to Take Charge of Energy Policy,” Carbon Pulse, September 6, 2025, https://carbon-pulse.com/432436/. ↩
  66. Yuhan-Kimberly, 2024 Yuhan-Kimberly’s 19th Sustainability Report – People: Our Strength and Source of Hope, 2024, 28–29, https://www.yuhan-kimberly.co.kr/pdf/report/yk_2024_en.pdf. ↩
  67. Internews, “S. Korea: Fair Trade Commission Warns Fashion Giants over False Advertising of Eco-Friendly Vegan Leather Products,” Business & Human Rights Resource Centre, May 14, 2025, https://www.business-humanrights.org/en/latest-news/skorea-fashion-giants-warned-over-false-eco-claims-on-vegan-leather-products/. ↩
  68. Xe Currency Converter, 1 South Korean Won (KRW) to US Dollars (USD) mid-market exchange rate: 1 USD = 1,450.28 KRW, accessed February 1, 2026, https://www.xe.com/en-us/currencyconverter/convert/?Amount=1&From=KRW&To=USD. ↩
  69. Marina Dorileo Barros and Paula Galbiatti Silveira, “Global Greenwashing Laws,” Enhesa, June 12, 2024, https://www.enhesa.com/resources/article/global-regulatory-changes-designed-to-prevent-greenwashing/. ↩
  70. Curie Lee, Eugenia Stavropoulou, Hye Sung Kim, and Sae Youn Kim, “Law Over Borders Comparative Guide: Environmental, Social & Governance Law Guide,” The Global Legal Post, March 2023, https://www.globallegalpost.com/lawoverborders/environmental-social-governance-559211028/south-korea-298758758. ↩
  71. Rudy Kwack, “ESG Regulation in South Korea: Disclosure Guidance,” ISS Insights, November 21, 2023, https://insights.issgovernance.com/posts/esg-regulation-in-south-korea-disclosure-guidance/. ↩
  72. Xpansiv, “Xpansiv and KRX to Collaborate on Korean Carbon Credit Market Launch,” September 15, 2025, https://xpansiv.com/xpansiv-and-krx-to-collaborate-on-korean-carbon-credit-market-launch/. ↩
  73. International Carbon Action Partnership, “Korea Emissions Trading System (K-ETS),” December 2024, https://icapcarbonaction.com/en/ets/korea-emissions-trading-system-k-ets. ↩
  74. Republic of Korea, “Act on the Allocation and Trading of Greenhouse-Gas Emission Permits,” “Act No. 20172,” January 30, 2024, Article 41, https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=64708&type=sogan&key=60. ↩
  75. Republic of Korea, “Act on the Allocation and Trading of Greenhouse-Gas Emission Permits,” “Act No. 11419,” May 14, 2012, Korea Legislation Research Institute, Articles 29, 34, https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=24561&type=new&key=. ↩
  76. International Emissions Trading Association, IETA Business Brief: Korea, (July 2025), https://www.ieta.org/uploads/wp-content/Resources/Busines-briefs/2025/IETA_Business_Brief-Korea-final.pdf. ↩
  77. Xe Currency Converter, 1 South Korean Won (KRW) to US Dollars USD – South Korean Won to US Dollars Exchange Rate, (USD) mid-market exchange rate: 1 USD = 1,450.28 KRW, accessed February 1, 2026, https://www.xe.com/en-us/currencyconverter/convert/?Amount=1&From=KRW&To=USD. ↩
  78. Yuhan-Kimberly, 2024 Yuhan-Kimberly’s 19th Sustainability Report – People: Our Strength and Source of Hope, 2024, 28–29, 2024, https://www.yuhan-kimberly.co.kr/pdf/report/yk_2024_en.pdf. ↩
  79. Curie Lee, Eugenia Stavropoulou, Hye Sung Kim, and Sae Youn Kim, “Law Over Borders Comparative Guide: Environmental, Social & Governance Law Guide,” The Global Legal Post, March 2023, https://www.globallegalpost.com/lawoverborders/environmental-social-governance-559211028/south-korea-298758758. ↩
  80. Greenhouse Gas Inventory and Research Center, Ministry of Environment, “Offset Registry System – Methodology Status” (방법론 현황), translated by Google Translate, accessed December 19, 2025, https://m.ors.gir.go.kr/ors/orme/ormeList.do. ↩
  81. Republic of Korea, “Act on the Management and Improvement of Carbon Sink,” “Act No. 11360,” February 22, 2012, as amended through August 16, 2023, Korea Legislation Research Institute, Article 27, https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=63698&type=part&key=26. ↩
  82. Rudy Kwack and Ingo Tietboehl, “Mandatory Climate Disclosure in South Korea,” ISS-Corporate, May 31, 2024, https://www.iss-corporate.com/resources/blog/mandatory-climate-disclosure-in-south-korea/. ↩
  83. Ibid. ↩
  84. Greenplaces, “KSSB Sustainability Disclosure Standards,” July 31, 2025, https://greenplaces.com/regulation/kssb-sustainability-disclosure-standards/. ↩
  85. Heesu Lee, “Korean Oil Firm Faces Greenwashing Claims Over Carbon-Offset Ads – SK Lubricants,” Bloomberg, October 25, 2022, https://www.bloomberg.com/news/articles/2022-10-27/korean-oil-firm-faces-greenwashing-claims-over-carbon-offset-ads; Heesu Lee, “Gas Giant in Korea Accused by Activists of Greenwashing,” Bloomberg, December 22, 2021, https://www.bloomberg.com/news/articles/2021-12-22/gas-giant-in-korea-accused-by-activists-of-greenwash-advertising. ↩
  86. Choi Ji-won, “Korea Starts Brokered Carbon Trading,” The Korea Herald, November 23, 2025, https://www.koreaherald.com/article/10622335. ↩
  87. Xpansiv, “Xpansiv and KRX to Collaborate on Korean Carbon Credit Market Launch,” September 15, 2025, https://xpansiv.com/xpansiv-and-krx-to-collaborate-on-korean-carbon-credit-market-launch/. ↩
  88. International Carbon Action Partnership, “Korea Emissions Trading System (K-ETS),” December 2024, https://icapcarbonaction.com/en/ets/korea-emissions-trading-system-k-ets. ↩
  89. Greenhouse Gas Inventory and Research Center, Ministry of Environment, “Offset Registry System – Methodology Status” (방법론 현황), translated by Google Translate, accessed December 19, 2025, https://m.ors.gir.go.kr/ors/orme/ormeList.do. ↩
  90. Republic of Korea, “Act on the Allocation and Trading of Greenhouse-Gas Emission Permits,” “Act No. 11419,” May 14, 2012, Korea Legislation Research Institute, Article 31, https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=24561&type=new&key=. ↩
  91. Choi Ayeong, “Coscom Completes Relay Management System – Infrastructure Connects GIR, KRX, Securities Firms, ETRS, ORS,” Maeil Business Newspaper, November 24, 2025, https://www.mk.co.kr/en/stock/11476478. ↩
  92. Asia Society Policy Institute, Korea Study Tour on ETS Design and Implementation (December 2022), 7, https://asiasociety.org/sites/default/files/inline-files/ASPI%20Study%20Tour%20on%20ETS%20Design%20and%20Implementation%20-%20summary%20report.pdf. ↩
  93. Republic of Korea, “Act on the Management and Improvement of Carbon Sink,” “Act No. 11360,” February 22, 2012, as amended through August 16, 2023, Korea Legislation Research Institute, Article 27, https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=63698&type=part&key=26. ↩
  94. Xpansiv, “Xpansiv and KRX to Collaborate on Korean Carbon Credit Market Launch,” September 15, 2025, https://xpansiv.com/xpansiv-and-krx-to-collaborate-on-korean-carbon-credit-market-launch/. ↩
  95. International Carbon Action Partnership, “Korea Emissions Trading System (K-ETS),” December 2024, https://icapcarbonaction.com/en/ets/korea-emissions-trading-system-k-ets. ↩
  96. Kang Jung-a, “NH Investment & Securities Launches Carbon Credit Brokerage Trading System,” Chosun Biz, November 24, 2025, https://biz.chosun.com/en/en-finance/2025/11/24/WNYTGUY5NFG3ZFNVKI567YBC7E/. ↩
  97. Xpansiv, “Xpansiv and KRX to Collaborate on Korean Carbon Credit Market Launch,” September 15, 2025, https://xpansiv.com/xpansiv-and-krx-to-collaborate-on-korean-carbon-credit-market-launch/. ↩
  98. Ibid. ↩
  99. International Carbon Action Partnership, “Korea Emissions Trading System (K-ETS),” December 2024, https://icapcarbonaction.com/en/ets/korea-emissions-trading-system-k-ets. ↩
  100. S&P Global Platts, “Platts Will Change Korean Offset Credit Specifications to Align with New Regulation,” January 15, 2024, https://www.spglobal.com/energy/en/pricing-benchmarks/our-methodology/subscriber-notes/011624-platts-will-change-korean-offset-credit-specifications-to-align-with-new-regulation. ↩
  101. Curie Lee, Eugenia Stavropoulou, Hye Sung Kim, and Sae Youn Kim, “Law Over Borders Comparative Guide: Environmental, Social & Governance Law Guide,” The Global Legal Post, March 2023, https://www.globallegalpost.com/lawoverborders/environmental-social-governance-559211028/south-korea-298758758. ↩
  102. Rudy Kwack, “ESG Regulation in South Korea: Disclosure Guidance,” ISS Insights, November 21, 2023, https://insights.issgovernance.com/posts/esg-regulation-in-south-korea-disclosure-guidance/. ↩
  103. Xpansiv, “Xpansiv and KRX to Collaborate on Korean Carbon Credit Market Launch,” September 15, 2025, https://xpansiv.com/xpansiv-and-krx-to-collaborate-on-korean-carbon-credit-market-launch/. ↩
  104. International Carbon Action Partnership, “Korea Emissions Trading System (K-ETS),” December 2024, https://icapcarbonaction.com/en/ets/korea-emissions-trading-system-k-ets. ↩
  105. Republic of Korea, “Enforcement Decree of the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits,” Presidential Decree No. 24180, November 15, 2012, as amended through February 7, 2025, Korea Legislation Research Institute, Article 41, https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=46598&type=part&key=4. ↩
  106. Kim Seonghee, “Korea Emissions Trading Scheme (K-ETS),” Institute of Energy Economics, Japan, August 2023, 7, https://eneken.ieej.or.jp/data/11487.pdf. ↩
  107. Republic of Korea, “Act on the Allocation and Trading of Greenhouse-Gas Emission Permits,” “Act No. 11419,” May 14, 2012, Korea Legislation Research Institute, Article 29, https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=24561&type=new&key=. ↩
  108. Ecoeye, “Offsetting in the Korea Emission Trading Scheme,” PMI Climate, Presentation for: ICAP & PMI Asia and Pacific ETS Training Course, October 2023, 8,https://www.pmiclimate.org/sites/default/files/2023-11/Offsetting%20in%20ETS%20-%20Ecoeye.pdf. ↩
  109. Financial Services Commission, Republic of Korea, “Revised Rule to Require IPO Bookrunners to Check Payment Capability of Institutional Investors,” Korea.net, April 26, 2023, https://www.korea.net/Government/Briefing-Room/Press-Releases/view?articleId=79875&insttCode=A260302&type=N. ↩
  110. Republic of Korea, “Act on the Allocation and Trading of Greenhouse-Gas Emission Permits,” “Act No. 11419,” May 14, 2012, Korea Legislation Research Institute, Article 8, https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=24561&type=new&key=. ↩
  111. International Financial Reporting Standards Foundation, “Use of IFRS Standards by Jurisdiction: South Korea,” November 20, 2024, https://www.ifrs.org/use-around-the-world/use-of-ifrs-standards-by-jurisdiction/view-jurisdiction.html/south-korea/. ↩
  112. Rudy Kwack and Ingo Tietboehl, “Mandatory Climate Disclosure in South Korea,” ISS-Corporate, May 31, 2024, https://www.iss-corporate.com/resources/blog/mandatory-climate-disclosure-in-south-korea/. ↩
  113. Republic of Korea, “Act on the Allocation and Trading of Greenhouse-Gas Emission Permits,” “Act No. 11419,” May 14, 2012, Korea Legislation Research Institute, Articles 29, 34, https://elaw.klri.re.kr/eng_mobile/viewer.do?hseq=24561&type=new&key=. ↩
  114. S&P Global Platts, “Platts Will Change Korean Offset Credit Specifications to Align with New Regulation,” January 15, 2024, https://www.spglobal.com/energy/en/pricing-benchmarks/our-methodology/subscriber-notes/011624-platts-will-change-korean-offset-credit-specifications-to-align-with-new-regulation. ↩
  115. Kelley Hamrick Malvar, Kim Myers, and Beatriz Granziera, Article 6 Implementation: Emerging Trends for Countries’ National Strategies, The Nature Conservancy, October 15, 2024, https://www.nature.org/content/dam/tnc/nature/en/documents/Article-6-Implementation.pdf. ↩
  116. Xpansiv, “Xpansiv and KRX to Collaborate on Korean Carbon Credit Market Launch,” September 15, 2025, https://xpansiv.com/xpansiv-and-krx-to-collaborate-on-korean-carbon-credit-market-launch/. ↩
  117. Choi Ayeong, “Coscom Completes Relay Management System – Infrastructure Connects GIR, KRX, Securities Firms, ETRS, ORS,” Maeil Business Newspaper, November 24, 2025, https://www.mk.co.kr/en/stock/11476478. ↩
  118. ECCO, “Article 6 of the Paris Agreement,” April 30, 2025, https://eccoclimate.org/article-6-of-the-paris-agreement/. ↩
  119. Rudy Kwack and Ingo Tietboehl, “Mandatory Climate Disclosure in South Korea,” ISS-Corporate, May 31, 2024, https://www.iss-corporate.com/resources/blog/mandatory-climate-disclosure-in-south-korea/. ↩
  120. Yuhan-Kimberly, 2024 Yuhan-Kimberly’s 19th Sustainability Report – People: Our Strength and Source of Hope, 2024, 28–29, 2024, https://www.yuhan-kimberly.co.kr/pdf/report/yk_2024_en.pdf. ↩
  121. Internews, “S. Korea: Fair Trade Commission Warns Fashion Giants over False Advertising of Eco-Friendly Vegan Leather Products,” May 14, 2025, Business & Human Rights Resource Centre,https://www.business-humanrights.org/en/latest-news/skorea-fashion-giants-warned-over-false-eco-claims-on-vegan-leather-products/. ↩
  122. Rudy Kwack, “ESG Regulation in South Korea: Disclosure Guidance,” ISS Insights, November 21, 2023, https://insights.issgovernance.com/posts/esg-regulation-in-south-korea-disclosure-guidance/. ↩
  123. International Carbon Action Partnership, “Korea Emissions Trading System (K-ETS),” December 2024, https://icapcarbonaction.com/en/ets/korea-emissions-trading-system-k-ets. ↩
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