Updated July. 23, 2014 03:12
The government has decided to postpone the introduction of the greenhouse gas emission trading scheme slated for January next year. The Strategy and Finance Ministry and the Environment Ministry have agreed to delay the implementation of the scheme as companies are strongly against it and Prime Minister Chung Hong-won and Finance Minister Choi Kyung-hwan pointed out its problems.
According to the Strategy and Finance Ministry, the Environment Ministry, and the Trade, Industry and Energy Ministry on Monday, the government had a working-level meeting and decided to recalculate the business as usual (BAU) levels, which will be the base of the greenhouse gas emission scheme, and come up with measures to reduce pressure on companies. The implementation of the scheme will be postponed as it will take a considerable amount of time to recalculate the BAU levels after reviewing the numbers released by the Environment Ministry.
Under a greenhouse gas emission trading scheme, the government allocates the maximum level of greenhouse gases to each company and allows companies buy or sell their gas emissions. A company that emits more than the allocated amount must either purchase the right to emit or pay fines. The business community including the Federation of Korean Industries asked the government to postpone the scheme beyond 2020, saying, The scheme would impose maximum 27.5 trillion won (26.7 million U.S. dollars) on companies for three years from 2015 to 2017.
Finance Minister Choi said in an interview with a media outlet last Thursday, As the emission trading scheme has many problems, we will review issue to decide whether to implement it or not. Choi is the chair of the Emission Allocation Committee, which decides the plan on greenhouse gas emission allocation. Prime Minister Chung said in the Special Committee on Budget and Accounts on last Wednesday, I will discuss (when to implement the scheme) more with relevant ministries considering the pressure on the industries. Since the postponement requires a revision of the Low Carbon and Green Growth Act, it is likely to face significant difficulties in the passage of legislation at the National Assembly.