SEOUL: A cap on carbon dioxide emissions that South Korea expects to introduce as part of a carbon trading scheme will be around 3 percent larger than previously touted over the next three years, the government said on Thursday.
Seoul has been under pressure from industry worried about costs from plans to begin what will be the world's second-biggest carbon emissions trading scheme from the start of 2015.
South Korea is one of the world's top 10 carbon producers, so any steps it takes to curb emissions are key to global efforts to combat greenhouse gases in the environment.
It wants to cut emissions in 2020 to 30 percent below business-as-usual levels.
The government said on Thursday that it would distribute 1.687 billion tonnes of carbon-equivalent emission permits from 2015-17 as part of the trading scheme, more than the 1.64 billion that were previously expected.
The country's finance minister had said this month that the government was looking in to measures to ease the impact on industry of the carbon permit trading programme, the centrepiece of its efforts to curb greenhouse gas emissions.
Under such cap-and-trade programmes, companies or countries face a limit on carbon emissions. If they need to exceed their quota, they can buy allowances from others.
"The additional initial allocation on a company-level of 52 million (permits) compared to the draft allocation published in June softens the reduction target particularly for the building and communication sectors but also provides relief for the power sector," said Thomas Winklehner at emissions specialist Korea Carbon.
Of the total permits, 1.598 billion will be distributed to the 526 covered emitters before trading starts, with the remaining 89 million dished out between 2015 and 2017, the environment ministry said in a statement on Thursday.
Firms must participate in the scheme if their emissions exceeded 125,000 tonnes a year between 2011 and 2013 or if they produced more than 25,000 tonnes from one site during that time, the ministry statement noted.
Those companies would account for about 66 percent of the country's total emissions, the government said.
The ministry added that heavy emitters such as power generators, steel makers and petrochemical producers would receive more permits.
A local steelmakers association said in a statement on Thursday said that the scheme would cost its members over 1 trillion won ($965 million) over the next three years.
South Korea last week delayed a proposed tax on vehicle carbon emissions by over five years to the end of 2020, amid pressure from domestic and US car makers who fear the levy would curb sales.
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