The government is building an international carbon market that companies can use not only to trade voluntary greenhouse gas reduction credits but also to meet regulatory requirements, including national emissions targets. To that end, it will split the credit issuance system into two categories and begin full-scale operation of the Global Verified Carbon Market (GVCM) next year.
Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung-il discussed the detailed implementation plan for the GVCM at a ministerial meeting on international economic affairs on the 12th. The GVCM is designed to spur trading in greenhouse gas reduction credits, whose credibility has been questioned because of a lack of internationally standardized criteria. The government fleshed out the operating framework based on a roadmap announced in December last year.
Credits will first be divided into two types depending on whether the host country of a project has approved their transfer. Credits approved for transfer, designated "GVCM A," can be used to meet an investing country's nationally determined contribution (NDC) or to comply with regulations in the international aviation sector. Credits without such approval, designated "GVCM NA," will be used for companies' voluntary environmental activities. Their scope of use can be expanded if the host country grants approval later.
The government will also review linking the credits to the domestic emissions trading scheme and the greenhouse gas target management system if certain conditions are met. In line with that shift, the market's previous name, the Global Voluntary Carbon Market, has been changed, with "Voluntary" replaced by "Verified."
To improve the credibility of transactions, key information such as project operators and reduction volumes will be recorded on a blockchain. The government plans to build the trading platform using the Korea Exchange (KRX) and to consider issuing credits in the form of digital assets in the future.
The government will secure participating countries this year and form an issuing body next year to flesh out the project. It will also discuss converting credits generated by greenhouse gas reduction projects of the World Bank (WB) and the Green Climate Fund (GCF) into GVCM credits.
The meeting also reaffirmed existing plans, including the creation of a 3 trillion won ($2.1 billion) overseas construction fund, follow-up negotiations on the South Korea-China free trade agreement (FTA), and an industrial complex in India dedicated to Korean companies. Lee said exports have maintained solid momentum, noting that the current account posted a surplus of $46.11 billion in August. He cited trade issues with the U.S., supply chain instability and the possibility of adjustments in artificial intelligence (AI) investment as external risks. "The government will respond to external uncertainties without wavering as one economic team and create new growth opportunities," Lee said.