Sejong, December 9 - The Ministry of Environment (Minister Han Wha-jin) designated two additional market makers to encourage companies participating in the emissions trading scheme to reduce greenhouse gas by vitalizing the trading market. The ministry will also increase the emission permits the local brokerage firms can hold. 

The Ministry of Environment designated KB Securities and Shinhan Securities as market makers on December 2, along with the existing five brokerage firms, to bring the total to seven. These seven firms will serve as the market makers of the emissions trading market for 2023 from January 2, 2023. They are required to place orders for buying and selling every day to provide liquidity. They will also reduce price volatility by expanding their response to repeated increases or decreases in price. 

Meantime, the ministry increased the limit of emissions permits allowed to the brokerages (emissions trading brokers) from 200,000 tons to 500,000 tons. Experts constantly argued that the lower limit of emissions permits held by brokerage firms made it difficult for businesses to actively participate in the market, even though local brokerage firms began to engage in the emissions trading market last December. The increased limit is expected to allow local brokerages to participate in the market more proactively, contributing to reducing the price uncertainty caused by the demand-supply imbalance of the market.

In addition, the Ministry of Environment intends to promptly implement various measures to improve the system. For instance, the ministry plans to establish further measures for stabilizing the market according to the market price, trade volume, etc., veering away from the previous approach determined at the government's discretion and criticized by many due to its poor predictability. The ministry plans to adopt emissions trading with consignment auctions to increase the trading convenience of companies. It will also prepare emission permit futures to eliminate the risk of price volatility for the long term.

Through such measures, the ministry will strive to support companies in using the market functions to reduce their GHG emissions effectively and not to undermine their investment in GHG reduction caused by the sudden increase/decrease of carbon permit prices.

Contact: Kim Hye-mi, Deputy Director

Climate Economy Division / +82-(0)44-201-6593

Foreign Media Contact: Chun Minjo(Rachel)

+82-(0)44-201-6055 / rachelmchun@korea.kr