It was found that the top 30 greenhouse gas emitting companies emitted almost all of their emissions free of charge through the ‘free allocation of greenhouse gas emission credits’. In particular, it was pointed out that the wide range of free allocation increases the vulnerability of Korean exports.
According to the data on the allocation of allowances for the top 30 companies that emit the most greenhouse gases in 2021, which was received by the Ministry of Environment and distributed on the 4th by Democratic Party lawmaker Jin Seong-joon, who belongs to the Environment and Labor Committee of the National Assembly, the top 30 companies that emit greenhouse gases account for 94% of the total emissions. was released free of charge.
The top 30 companies emitting greenhouse gases, such as POSCO, South-East Power, Korea Southern Power, Korea Western Power, Korea Midland Power, East-West Power, Hyundai Steel, Samsung Electronics, Ssangyong C&E, and S-Oil, recorded a total of 423.2 million tons of GHG last year. emitted This amounted to 62% of the nation’s total greenhouse gas emissions of 679.6 million tons (provisional) last year.
Thirty companies emitted 398.8 million tons (94%) of their total greenhouse gas emissions as free allocation credits. If the average transaction price of the greenhouse gas emission trading market last year (19,709 won per ton) is applied, it means that about 7.8 trillion won of greenhouse gases were emitted free of charge.
Since the introduction of the emission trading system in 2015, the Ministry of Environment has been allocating 10% of emission allowances to companies subject to paid allocation from the third planning period (2021-2025). However, 100% free allocation is still applied to industries that emit large amounts of greenhouse gas, such as steel, cement, chemical, and fertilizer industries, which have a high proportion of exports and imports and high greenhouse gas reduction costs compared to production. Although the 10% paid allocation is limited to the power generation, automobile, and construction industries, the proportion is only 4.4% of the total greenhouse gas emission allowances.
Meanwhile, the steel industry, which is known to emit a lot of greenhouse gases, emitted more greenhouse gases than last year, but had more than double the amount of free allocation allowances. It has been pointed out that the extensive free allocation to domestic steelmakers increases the vulnerability of Korean exports.
According to data received from the Greenhouse Gas Information Center of the Ministry of Environment on the 4th by Justice Party lawmaker Jang Hye-young, who belongs to the National Assembly Planning and Finance Committee, the three steel companies, POSCO, Hyundai Steel, and Dongkuk Steel, emitted 18.85 million tons of greenhouse gas last year. This amounts to 16% of Korea’s total greenhouse gas emissions (679.5 million tons).
In particular, the three steel companies’ greenhouse gas emissions last year increased by 2.74 million tons compared to the previous year, and by 4.12 million tons compared to 2019, before Corona 19.
A bigger problem is that the amount of free allotment allowances for greenhouse gas emissions to reduce the emissions of companies with excessive greenhouse gas emissions increased by 5.4 million tons, which is larger than the actual emission. That is, twice as many credits were allocated compared to the three steel companies last year.
In a report commissioned by the Ministry of Strategy and Finance, the Peterson Institute (PIIE) of the US pointed out that “extensive free allocation of the Korean emission trading system and the large gap between the EU and Korea emission allowance prices increase the vulnerability of Korean exports.”
Rep. Jang Hye-young said, “Currently, Korea’s emission trading system has not adjusted its quota even if the National Greenhouse Gas Reduction Target (NDC) is raised. You will not even be able to protect your business.”