South Korea is putting institutional weight behind the growth of its domestic carbon credit market, combining a new industry alliance, dedicated legislation, and a trading exchange expected to be operational by the end of next year.
Alliance and legislation
The Korean Voluntary Carbon Market Alliance, established jointly by the Ministry of Planning and Budget and the Korea Chamber of Commerce and Industry (KCCI), is set to serve as a bridge between project developers and credit buyers, as well as an advisory body on policy development.
Alongside the alliance, the government is preparing the Voluntary Carbon Market Act—legislation that will define the rules governing credit certification, issuance, and retirement. A designated registration agency or standard, such as Verra or KCCI, will manage this process end to end. Projects will be subject to independent verification, with evaluation results disclosed publicly to support market integrity.
Exchange infrastructure
A dedicated carbon exchange is being built through a partnership between the Korea Exchange and US-based Xpansiv, with a launch target of end-2026. The platform will connect directly to registration agencies via an integrated registry, keeping transaction and retirement records current in real time.
Credits will be listed under product categories following quality assessments, with some government support available to ease the regulatory load in the market's early stages. The government is also considering access for foreign buyers and the listing of credits issued under overseas standards. Partnerships with international carbon rating agencies are planned to bolster the exchange's standing in global markets.
ETS context
South Korea's emissions trading scheme (ETS) covers 71% of national emissions, yet the government has acknowledged it falls short in providing meaningful incentives for small and medium-sized enterprises (SMEs) to reduce their footprint.
'Although emission allowance prices have been on the rise since the announcement of the fourth emission allowance allocation plan last year, they remain low compared to major countries, and there is still a long way to go to boost the incentive for reduction in our economy,' said Park Hong-geun, Minister of Planning and Budget.
The Korean Allowance Unit price has climbed 63% this year to $11.43 (KRW16,800) per tonne of CO₂ equivalent as of last Friday, with supply concerns in the second half of the decade driving demand from emitters looking to build up allowance reserves.
What comes next
Beyond the immediate infrastructure build-out, the government plans to publish regular market statistics and set up a dedicated support centre to promote market development. Longer-term, it is exploring ways to connect the domestic verified carbon market with international mechanisms, including the CORSIA aviation decarbonisation scheme and the country's own ETS.