ENFORCEMENT DECREE OF THE ACT ON THE ALLOCATION AND TRADING OF GREENHOUSE GAS EMISSION PERMITS
Presidential Decree No. 24180, Nov. 15, 2012
Amended by Presidential Decree No. 24429, Mar. 23, 2013
Presidential Decree No. 25179, Feb. 13, 2014
Presidential Decree No. 25751, Nov. 19, 2014
Presidential Decree No. 26439, Jul. 24, 2015
Presidential Decree No. 27181, May 24, 2016
Presidential Decree No. 27953, Mar. 27, 2017
Presidential Decree No. 28211, Jul. 26, 2017
Presidential Decree No. 28234, Aug. 9, 2017
Presidential Decree No. 28562, Dec. 29, 2017
CHAPTER I GENERAL PROVISIONS
CHAPTER II FORMULATION, ETC. OF MASTER PLANS FOR EMISSIONS TRADING SYSTEM
| Article 2 (Formulation, etc. of Master Plans for Emissions Trading System) |
| (1) | Pursuant to Article 4 of the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits (hereinafter referred to as the "Act"), the Minister of Strategy and Finance and the Minister of Environment shall jointly establish a master plan for the emissions trading system (hereinafter referred to as "master plan") by not later than one year prior to the commencement of each commitment period. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | When the Minister of Strategy and Finance and the Minister of Environment formulate or revise a master plan, he/she shall gather opinions from interested parties, etc. by means of public hearings, etc. pursuant to Article 4 (4) of the Act, and when opinions presented are deemed rational, shall reflect opinions in the master plan. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | When the Minister of Strategy and Finance and the Minister of Environment formulate or revise (excluding matters referred to in paragraph (4)) a master plan, he/she shall have the established or revised master plan deliberated upon by the Presidential Committee on Green Growth (hereinafter referred to as the "Green Growth Committee") established under Article 14 of the Framework Act on Low Carbon, Green Growth (hereinafter referred to as the "Framework Act") and by the State Council pursuant to the main sentence of Article 4 (5) of the Act after gathering opinions thereon pursuant to paragraph (2). <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | "Minor matters prescribed by Presidential Decree" in the proviso to Article 4 (5) of the Act means either of the following: |
| 2. | Matters concerning the training of professional human resources, education, public relations, etc. referred to in Article 4 (2) 8 of the Act. |
| (5) | The Minister of Strategy and Finance and the Minister of Environment may request the Integrated Information Center for Greenhouse Gases (hereinafter referred to as the "Integrated Information Center") established under Article 36 of the Enforcement Decree of the Framework Act on Low Carbon, Green Growth (hereinafter referred to as the "Enforcement Decree of the Framework Act") to conduct surveys and research for formulating master plans. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 3 (Formulation, etc. of Plans to Allocate National Emission Allowances) |
| (1) | Pursuant to Article 5 of the Act, the Minister of Environment shall establish a plan to allocate national emission allowances (hereinafter referred to as "allocation plan") in consideration of conformity to targets for reducing greenhouse gases referred to in Article 42 (1) 1 of the Framework Act. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | Where the Minister of Environment formulates or revises an allocation plan, he/she shall consult with the heads of relevant central administrative agencies thereon and submit the relevant matters for deliberation and mediation by the Emission Permits Allocation Committee established under Article 6 of the Act (hereinafter referred to as the "Allocation Committee"). <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | The Minister of Environment may request relevant data from the head of any relevant central administrative agency if necessary for formulating or revising allocation plans, and the head of the agency upon receipt of such request shall render cooperation therein except in extenuating circumstances. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | "Matters prescribed by Presidential Decree" in Article 5 (1) 11 of the Act means the following matters: <Amended by Presidential Decree No. 28234, Aug. 9, 2017> |
| 1. | Matters concerning the classification of sectors and types of business eligible for allocation of emission permits; |
| 3. | Matters concerning additional allocation of emission permits and adjustment of allocated emission permits pursuant to Article 16 of the Act; |
| 4. | Matters concerning revocation of emission permits allocated or adjusted, pursuant to Article 17 of the Act; |
| 5. | Matters concerning the ratio of emission permits gratuitously allocated after the third commitment period after the Act enters into force (hereinafter referred to as "third commitment period") pursuant to Article 13 (3); |
| 6. | Matters concerning the limit on surrender of offset emission permits under Article 38 (4); |
| 7. | Matters necessary to increase trading of emission permits such as the number of emission permits carried forward to the next commitment period, which have influence on the standards for the allocation of emission permits pursuant to Article 5 (1) 4 and 5; |
| 8. | Other matters necessary for allocating and trading emission permits, which are resolved upon by the Allocation Committee. |
| (5) | The Minister of Environment may revise the relevant allocation plan in any of the following cases: <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Where a substantial ground arises to revise an allocation plan due to a sudden change in a domestic or international economic situation, technological advancement, and unexpected fluctuations in domestic power demand; |
| 2. | Where it is necessary to revise an allocation plan according to the outcome of international negotiations on climate change. |
| (6) | Where the Minister of Environment formulates or revises (excluding matters referred to in paragraph (7)) an allocation plan, he/she shall submit the relevant matters for deliberation by the Green Growth Committee and State Council pursuant to the main sentence of Article 5 (5) of the Act after gathering opinions pursuant to Article 5 (4) of the Act, and undergoing consultation with the heads of relevant central administrative agencies and having them deliberated on and mediated by the Allocation Committee pursuant to paragraph (2). <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (7) | "Minor matters prescribed by Presidential Decree" in the proviso to Article 5 (5) of the Act means either of the following: <Amended by Presidential Decree No. 28234, Aug. 9, 2017> |
| 1. | Matters concerning the carryover and borrowing of emission permits and standards for and implementation of setoff under Article 5 (1) 10 of the Act; |
| 2. | Matters resolved upon by the Allocation Committee pursuant to paragraph (4) 8. |
| (8) | The Minister of Environment shall publicly announce allocation plans finalized pursuant to Article 5 (5) of the Act in the Official Gazette, website, etc. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (9) | The Minister of Environment may require the Integrated Information Center to conduct surveys and research for formulating allocation plans. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 4 (Organization and Operation of Allocation Committee) |
| (1) | "Relevant central administrative agencies prescribed by Presidential Decree" in Article 7 (2) 1 of the Act means the Ministry of Foreign Affairs, the Ministry of the Interior and Safety, the Ministry of Oceans and Fisheries, and the Korea Forest Service. <Amended by Presidential Decree No. 24429, Mar. 23, 2013; Presidential Decree No. 25751, Nov. 19, 2014; Presidential Decree No. 28211, Jul. 26, 2017> |
| (2) | Members of the Allocation Committee referred to in Article 7 (2) 2 of the Act shall be commissioned by the Minister of Strategy and Finance upon the recommendation by the heads of relevant central administrative agencies. |
| (3) | The Vice Minister of Environment shall become the secretary of the Allocation Committee referred to in Article 7 (5) of the Act (hereinafter referred to as "secretary"). <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | The secretary shall handle the following administrative affairs under the command of the chairperson of the Allocation Committee: |
| 1. | Preparation of matters to be deliberated upon by the Allocation Committee (including preparation of a review report); |
| 2. | Consultation with the heads of relevant central administrative agencies on matters to be deliberated upon and collection of opinions of relevant experts, etc.; |
| 3. | Other matters concerning preparation for meetings of the Allocation Committee. |
| Article 4-2 (Dismissal of Members of Allocation Committee) |
Where a commissioned member of the Allocation Committee under Article 7 (2) 2 of the Act falls under any of the following, the Minister of Strategy and Finance may dismiss the relevant member: | 1. | Where he/she becomes unable to perform his/her duties due to mental disorder; |
| 2. | Where he/she has committed any misconduct related to his/her duties; |
| 3. | Where it is deemed that he/she is not suitable for a member due to neglect of duties, injury to dignity and other reasons; |
| 4. | Where he/she indicates his/her intention by himself/herself that it is difficult for him/her to perform his/her duties. |
[This Article Newly Inserted by Presidential Decree No. 27181, May 24, 2016]
| Article 5 (Meetings, etc. of Allocation Committee) |
| (1) | Meetings of the Allocation Committee shall be held when the chairperson of the Allocation Committee deems it necessary or at the request of at least 1/3 of all incumbent members. |
| (2) | Meetings of the Allocation Committee shall commence deliberation with the attendance of a majority of all incumbent members and pass resolutions with the affirmative vote of a majority of members present. |
| (3) | If necessary, the chairperson of the Allocation Committee may require relevant public officials of central administrative agencies or experts in relevant fields to appear at meetings to listen to opinions therefrom. |
| (4) | Except as otherwise expressly provided for in Article 4 and paragraphs (1) through (3), the chairperson of the Allocation Committee shall determine detailed matters necessary for the operation of the Allocation Committee through resolution by the Allocation Committee. |
| Article 5-2 (Composition and Operation of Consultative Body on Emissions Trading System) |
| (1) | The Minister of Environment shall organize and operate a consultative body on the emissions trading system in order to have consultations on the following matters: |
| 1. | Matters related to establishing a master plan, etc.; |
| 2. | Matters related to establishing an allocation plan, etc.; |
| 3. | Detailed matters related to the methods for calculating the allocation of emission permits, etc. prescribed in Article 12 (2); |
| 4. | Detailed matters related to the procedures, etc. for submitting and examining applications for allocation prescribed in Article 15 (2); |
| 5. | Matters related to additional allocation prescribed in Article 20 (2); |
| 6. | Detailed matters related to determining additional allocation of emission permits and adjusting allocated emission permits prescribed in Article 21 (9); |
| 7. | Detailed matters related to revocation of allocation of emission permits prescribed in Article 22 (10); |
| 8. | Detailed matters related to the criteria for certification of emission levels, procedures for certification, etc. provided for in Article 33 (6); |
| 9. | Detailed matters related to the criteria and procedures for approval of external projects provided for in Article 39 (5); |
| 10. | Detailed matters related to certification of greenhouse gas reductions from external projects provided for in Article 40 (6); |
| 11. | Other matters on which the Minister of Environment admits that he/she needs to hear the opinions of the relevant central administrative agencies. |
| (2) | The chairperson of the consultative body prescribed in paragraph (1) shall be appointed by the Minister of Environment from among high-ranking public officials belonging to the Ministry of Environment, and its members shall be appointed by the head of the relevant agency from among public officials of Grade IV or higher belonging to any of the following relevant central administrative agencies: |
| 1. | The Ministry of Strategy and Finance; |
| 2. | The Ministry of Agriculture, Food and Rural Affairs; |
| 3. | The Ministry of Trade, Industry and Energy; |
| 4. | The Ministry of Environment; |
| 5. | The Ministry of Land, Infrastructure and Transport; |
| 6. | The Office for Government Policy Coordination; |
| 7. | Other relevant central administrative agencies deemed necessary by the Minister of Environment. |
[This Article Newly Inserted by Presidential Decree No. 28562, Dec. 29, 2017]
CHAPTER III DESIGNATION OF BUSINESS ENTITIES ELIGIBLE FOR ALLOCATION AND ALLOCATION OF EMISSION PERMITS
SECTION 1 Designation of Business Entities Eligible for Allocation
| Article 6 (Designation, etc. of Business Entities Eligible for Allocation) |
| 1. | Matters related to the following: The Minister of Environment: |
| (d) | Additional allocation of emission permits in accordance with recognition of the outcomes of earlier reduction prescribed in Article 15 of the Act; |
| (e) | Additional allocation of emission permits and adjustments to allocated emission permits pursuant to Article 16 of the Act; |
| (i) | Receipt of reports on trading of emission permits by a person who trades emission permits pursuant to Article 21 of the Act; |
| (j) | Designation, establishment and operation of an emission permits exchange, approval of operational regulations, and supervision of emission permits exchange prescribed in Article 22 of the Act; |
| (n) | Organization, operation, etc. of the Emissions Certification Committee provided for in Article 26 of the Act; |
| (p) | Approval and processing of carryover or borrowing of emission permits provided for in Article 28 of the Act; |
| (y) | Delegation or entrustment of authority prescribed in Article 40 of the Act (limited to the affairs referred to in items (a) through (x)); |
| (b) | Delegation or entrustment of authority pursuant to Article 40 of the Act (limited to the matter referred to in item (a)). |
| (2) | "Preceding three years" in Article 8 (1) 1 of the Act means three years from four years prior to the beginning of each commitment period: Provided, That it means three years immediately preceding the year in which a business entity is designated and publicly notified as a new entrant with respect to a new entrant referred to in Article 9 of the Act (hereinafter referred to as "new entrant"). |
| (3) | The Minister of Environment shall designate any of the following business entities as a business entity eligible for allocation of emission permits (hereinafter referred to as "business entity eligible for allocation") and publicly notify such business entity in the Official Gazette by not later than five months prior to the beginning of each commitment period (in cases of business entities referred to in subparagraph 2, by not later than five months prior to the beginning of each compliance year). <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | A business entity referred to in Article 8 (1) 1 of the Act (including business entities designated as business entities eligible for allocation for the commitment period in which the business entities eligible for allocation are designated falls and satisfying the standard volume of greenhouse gas emissions referred to in the same subparagraph); |
| 3. | A business entity which fails to submit an application to abandon voluntary participation for the following commitment period referred to in paragraph (7) among business entities designated as business entities eligible for allocation for the commitment period in which they are designated as voluntarily participating business entities falls. |
| (4) | A voluntarily participating business entity shall prepare an application for voluntary participation stating the following matters and submit it to the Minister of Environment by electronic means (referring to the method using the Integrated Information Management System for Greenhouse Gases established under Article 45 of the Act; hereinafter the same shall apply) by not later than six months prior to the beginning of the relevant compliance year: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | The trade name or name of a business entity; |
| 2. | The representative of a business entity; |
| 3. | The location of the headquarters and places of business of a business entity; |
| (5) | Where the Minister of Environment deems it inappropriate to designate a voluntarily participating business entity as a business entity eligible for allocation due to its failure to conscientiously perform target management pursuant to Article 42 of the Framework Act or for fear that the voluntarily participating business entity is likely to substantially undermine market stability, he/she may not designate the voluntarily participating business entity as a business entity eligible for allocation. In such cases, the Minister of Environment shall, without delay, notify the relevant business entity thereof, stating the ground therefor, etc. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (6) | When the Minister of Environment accepts an objection to the designation of a business entity eligible for allocation filed under Article 38 (1) 1 of the Act, he/she shall publicly notify changed matters in the Official Gazette by not later than three months (when the period is extended pursuant to the proviso to paragraph (2) of the same Article, by not later than two months prior to the beginning of each commitment period) prior to the beginning of each commitment period (referring to a compliance year, in cases of voluntarily participating business entities; hereafter the same shall apply in this paragraph). <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (7) | A voluntarily participating business entity that no longer desires to be designated as a business entity eligible for allocation in the following commitment period (excluding business entities referred to in Article 8 (1) 1 of the Act) shall submit an application to abandon voluntary participation to the Minister of Environment by not later than six months prior to the beginning of the following commitment period. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (8) | The Minister of Environment shall not designate a voluntarily participating business entity which has submitted an application to abandon voluntary participation pursuant to paragraph (7) as a business entity eligible for allocation for the following commitment period, and shall close the emission trading account of the relevant business entity which are registered in the emission permits register referred to in Article 11 of the Act (hereinafter referred to as "emission permits register") upon the expiration of the deadline for the surrender of emission permits referred to in Article 27 (1) of the Act for the last compliance year of the relevant commitment period. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 7 (Procedures for Designation and Public Notice of New Entrants) |
| (1) | Pursuant to Article 9 of the Act, the Minister of Environment shall designate business entities which newly fall under Article 8 (1) 1 of the Act and reports a statement prepared under Article 44 of the Framework Act at least once after verification of such statement as business entities eligible for allocation, and publicly notify such business entities in the Official Gazette by not later than five months prior to the beginning of each compliance year. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | Article 6 (6) shall apply mutatis mutandis to filing objections to the designation of new entrants as business entities eligible for allocation. In such cases, "commitment period" shall be construed as "compliance year." |
| Article 8 (Notification, etc. of Designation and Public Notice of Business Entities Eligible for Allocation) |
| (1) | When the Minister of Environment designates and publicly notifies a business entity eligible for allocation pursuant to Articles 6 and 7 or fails to re-designate a business entity eligible for allocation as a business entity eligible to allocation for the following commitment period, he/she shall, without delay, give notice thereof to the relevant business entity and the competent authorities by sector. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | When a business entity designated and publicly notified as a business entity eligible to allocation fails to be re-designated as a business entity eligible for allocation for the following commitment period, it shall be deemed already designated as a controlled business entity in the relevant compliance year if the business entity satisfies the standards for designation of controlled business entities referred to in Article 42 (5) of the Framework Act (hereinafter referred to as "controlled business entity"). |
| Article 9 (Management, Operation, etc. of Emission Permits Register) |
| (1) | Pursuant to Article 11 of the Act, the Minister of Environment shall manage and operate the emission permits register by electronic means so that information on the allocation, trading, reporting, verification, certification, etc. of emission permits can be managed in a consistent and systematic manner. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | Any of the following persons may request the Minister of Environment to permit inspection of the information registered in the emission permits register and the Minister of Environment shall comply therewith except in extenuating circumstances: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Amount of emission permits additionally allocated based on the outcomes of earlier reduction under Article 15 (1) of the Act; |
| 2. | Amount of emission permits additionally allocated to business entities eligible for allocation and adjustment of allocated emission permits under Article 16 of the Act; |
| 3. | Amount of revoked emission permits allocated to or adjusted with respect to business entities eligible for allocation under Article 17 of the Act; |
| 8. | Matters concerning statements and verification reports submitted under Article 31 (2). |
| 2. | Matters referred to in the subparagraphs of paragraph (3); |
| 3. | Total amount of emission permits held which is calculated by including the matters referred to in the subparagraphs of paragraph (3); |
| 4. | Other matters determined in public notice of the management and operation of the emission permits register referred to in Article 11 (3). |
| Article 10 (Disclosure of Information Registered in Emission Permits Register) |
The following information among the information registered in the emission permits register shall be disclosed in principle:
| 2. | Information referred to in the subparagraphs (excluding subparagraph 4) of Article 9 (3). |
| Article 11 (Corrections, etc. of Matters Registered in Emission Permits Register) |
| (1) | When any error or mistake is found with respect to a matter registered in the emission permits register, the Minister of Environment may correct such matter, ex officio or upon the request of a person who has filed for registration of his/her account for trading emission permits pursuant to Article 20 of the Act. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | When the Minister of Environment corrects a registered matter pursuant to paragraph (1), he/she shall give notice thereof to the person who has filed for registration of his/her account for trading emission permits. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | Except as otherwise expressly provided for in Articles 9, 10 and paragraphs (1) and (2) of this Article, the Minister of Environment shall determine detailed matters concerning the protection of information registered in the emission permits register, protection of confidential business information of enterprises, fees for the issuance of certificates under subparagraph 1 of Article 39 of the Act, etc. and publicly notify matters so determined in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
SECTION 2 Allocation of Emission Permits
| Article 12 (Criteria, etc. for Allocation of Emission Permits) |
| (1) | The Minister of Environment shall determine the number of emission permits to be allocated to each business entity eligible for allocation, in consideration of the matters referred to in the subparagraphs of Article 12 (2) of the Act and the following matters: <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28234, Aug. 9 ,2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| 3. | Greenhouse-gas emission levels or technological level of a relevant business entity eligible for allocation; |
| 4. | Ratio of emission permits allocated gratuitously pursuant to Article 13 (hereinafter referred to as "gratuitous allocation ratio"); |
| 5. | Anticipated growth rate of a relevant type of business or business entity eligible for allocation during a commitment period; |
| 7. | The level of contribution made to reducing national greenhouse gas emissions by utilizing combustible wastes instead of fossil fuels; |
| 9. | The volume of greenhouse gas emitted per unit activity data, such as a product output, calculated by the method comparing it with those of domestic or foreign emission facilities or processes of the same type (hereinafter referred to as "benchmarking method"); |
| 10. | The level of contribution made by each business entity eligible for allocation to increasing the market of the emission permits through the trading thereof. |
| (2) | The Minister of Environment shall determine detailed matters concerning the methods of calculating the number of emission permits allocated under paragraph (1) jointly with the competent authorities by sector, and publicly notify matters so determined in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 13 (Gratuitous Allocation Ratios, etc. of Emission Permits) |
| (1) | All emission permits allocated to each business entity eligible for allocation shall be allocated gratuitously during the first commitment period referred to in Article 2 (1) of the Addenda to the Act (hereinafter referred to as "first commitment period"). |
| (2) | 97/100 of emission permits allocated to each business entity eligible for allocation shall be allocated gratuitously during the second commitment period referred to in Article 2 (1) of Addenda to the Act (hereinafter referred to as "second commitment period"). |
| (3) | The gratuitous allocation ratios during the third commitment period and thereafter shall be determined in the allocation plan within 90/100 in consideration of evaluations of preceding commitment periods, relevant international trends, etc. In such cases, no gratuitous allocation ratios determined in the allocation plan shall exceed the gratuitous allocation ratio of the immediately preceding commitment period. |
| (4) | Emission permits allocated onerously to business entities eligible for allocation during a commitment period pursuant to Article 12 (3) of the Act shall be allocated to business entities eligible for allocation by means of auction or other means. |
| (5) | The Minister of Environment shall determine detailed matters concerning onerous allocation of emission permits, such as the time and venue for auction referred to in paragraph (4), and publicly notify matters so determined in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 14 (Criteria for Types of Business Eligible for Gratuitous Allocation) |
Types of business eligible for gratuitous allocation of all emission permits pursuant to Article 12 (4) of the Act shall be any of the following types of business and determined in the allocation plan through evaluation in each commitment period: | 1. | A type of business, the international trade intensity of which, referred to in attached Table 1 is at least 30/100; |
| 2. | A type of business, the production costs incurrence rate of which, referred to in attached Table 1 is at least 30/100; |
| 3. | A type of business, the international trade intensity and production costs incurrence rate of which, referred to in attached Table 1 are at least 10/100 and at least 5/100, respectively. |
| Article 15 (Submission of Applications for Allocation of Emission Permits) |
| (1) | A business entity eligible for allocation shall prepare an application for allocation of emission permits referred to in Article 13 (1) of the Act (hereinafter referred to as "application for allocation") by the following unit and submit the application to the Minister of Environment by electronic means. In such cases, applications shall be submitted only when the number of emission permits allocated is determined by the benchmarking method with respect to subparagraphs 3 through 5: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Unit of a business entity eligible for allocation, including its all places of business; |
| 2. | Unit of a place of business which belongs to a business entity eligible for allocation; |
| 3. | When a business entity eligible for allocation produces a variety of final product items, the unit of a final product item produced by all of its places of business producing the same item; |
| 4. | When a place of business belonging to a business entity eligible for allocation produces a variety of final product items, the unit of a final product item; |
| 5. | Unit of a place of business belonging to a business entity eligible for allocation and producing only parts or raw materials for the final product items referred to in subparagraphs 3 and 4. |
| (2) | The Minister of Environment shall determine detailed matters concerning procedures for the submission and examination of applications for allocation referred to in paragraph (1) and other matters jointly with the competent authorities by sector, and publicly notify matters so determined in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 16 (Determination of Number of Emission Permits Allocated to each Business Entity Eligible for Allocation) |
| (1) | The Minister of Environment shall determine the number of emission permits allocated to each business entity eligible for allocation after deliberation and adjustment by the deliberation committee on determinations of allocation prescribed in Article 18 (1). <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | The Minister of Environment shall report to the relevant allocation committee the number of emission permits allocated to each business entity eligible for allocation determined under paragraph (1). <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
[This Article Wholly Amended by Presidential Decree No. 27181, May 24, 2016]
| Article 17 (Notification, etc. of Number of Emission Permits Allocated to each Business Entity Eligible for Allocation) |
| (1) | The Minister of Environment shall notify each business entity eligible for allocation of the number of emission permits allocated to the business entity eligible for allocation, which are determined pursuant to Article 16, by no later than two months prior to the beginning of a commitment period (in cases of voluntarily participating business entities and new entrants, by no later than two months prior to the beginning of a compliance year in which emission permits are allocated to them). <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | The Minister of Environment shall register the number of emission permits allocated to a business entity eligible for allocation, which is determined under Article 16, in the emissions trading account of the business entity eligible for allocation, stating the compliance year in which the emission permits are allocated. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 18 (Deliberation Committee on Determinations of Allocation) |
| (1) | A deliberation committee on determinations of allocation shall be established within the Ministry of Environment to deliberate on and adjust the following matters concerning emission permits allocated for each business entity and other matters: <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Emission permits allocated for each business entity eligible for allocation under Article 16 (1); |
| 2. | Additional allocation of emission permits following revisions to allocation plans under Article 20 (2); |
| 3. | Additional allocation of emission permits and adjustment of emission permits allocated, under Article 21 (11); |
| 4. | Revocation of allocation of emission permits under Article 22 (8). |
| (2) | The deliberation committee on determinations of allocation shall be comprised of no more than 16 members, including one chairperson. <Amended by Presidential Decree No. 27181, May 24, 2016> |
| (3) | The Vice Minister of Environment shall serve as the chairperson of the deliberation committee on determinations of allocation, and its members shall be the following persons: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | High-ranking public officials appointed by the head of a relevant agency, from among those who belong to the Ministry of Strategy and Finance, the Ministry of Agriculture, Food and Rural Affairs, the Ministry of Trade, Industry and Energy, the Ministry of Environment, the Ministry of Land, Infrastructure and Transport, the Office for Government Policy Coordination, and other relevant central administrative agencies deemed necessary by the Minister of Environment; |
| 2. | Persons commissioned by the Minister of Environment upon the recommendation of the heads of the central administrative agencies prescribed in subparagraph 1, from among those who have abundant knowledge about and experience in the fields related to climate change, carbon markets, greenhouse gas reduction, etc. |
| (4) | Except as otherwise expressly provided for in paragraphs (1) through (3), the chairperson of the deliberation committee on determinations of allocation shall determine matters necessary for organization and operation of the deliberation committee on determinations of allocation through resolutions by the deliberation committee on determinations of allocation. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 18-2 (Dismissal of Members of Deliberation Committee on Determinations of Allocation) |
Where any member of the deliberation committee on determinations of allocation commissioned pursuant to Article 18 (3) 2 falls under any of the following, the Minister of Environment may dismiss such member: | 1. | Where the member becomes incapable of performing his/her duties due to mental disorder; |
| 2. | Where the member engages in misconduct in connection with his/her duties; |
| 3. | Where the member is deemed unsuitable to serve as a member due to delinquency of duty, injury to dignity, or any other reasons; |
| 4. | Where the member voluntarily admits that it is impracticable for him/her to perform his/her duties as a member. |
[This Article Wholly Amended by Presidential Decree No. 28562, Dec. 29, 2017]
| Article 19 (Recognition of Outcomes of Earlier Reduction) |
| (1) | "Outcomes of earlier reduction" in Article 15 (1) of the Act (hereinafter referred to as "earlier reduction performance") means the following: |
| 1. | Greenhouse-gas reduction performance voluntarily achieved by a business entity eligible for allocation by December 31 of the year in which the first target is set for the business entity as it is designated as a controlled business entity, which are verified by a verifying institution pursuant to Article 33 of the Enforcement Decree of the Framework Act but not reflected in the performance of target management; |
| 2. | A portion achieved in excess of the total reduction target, which is recognized during the period from the year following the year in which the first target is set for a business entity eligible for allocation as it is designated as a controlled business entity to the time an application is submitted under paragraph (2). |
| (2) | A business entity eligible for allocation which achieves the outcomes of earlier reduction shall file an application for recognition of such outcomes of earlier reduction to the Minister of Environment by electronic means, within eight months from the beginning of the second compliance year of the first commitment period. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | The Minister of Environment shall additionally allocate emission permits equivalent to the outcomes of earlier reduction recognized after reviewing an application for recognition of the outcomes of earlier reduction, filed under paragraph (2), as emission permits for the second compliance year and the third compliance year of the first commitment period: Provided, That when the total outcomes of earlier reduction so recognized exceed the number of emission permits under paragraph (4), the Minister of Environment shall additionally allocate the number of emission permits equivalent to the value computed by multiplying the total number of emission permits to be allocated for the recognition of the outcomes of earlier reduction to each business entity eligible for allocation, which obtains recognition of its outcomes of earlier reduction, by the contribution coefficient of earlier reduction performance, computed by the following formula: <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
Contribution coefficient of the outcomes of earlier reduction = Recognized volume of the outcomes of earlier reduction of a business entity eligible for allocation / Sum of recognized volume of the outcomes of earlier reduction of all business entities eligible for allocation.
| (4) | The number of emission permits to be additionally allocated under paragraph (3) shall be determined by the allocation plan in consideration of the total number of emission permits allocated during the first commitment period. <Amended by Presidential Decree No. 27181, May 24, 2016> |
| (5) | Emission permits additionally allocated under paragraph (3) shall be used from the reserve emission permits under Article 18 (hereinafter referred to as "reserve emission permits"). |
| (6) | Except as otherwise expressly provided for in paragraphs (1) through (5), the Minister of Environment shall determine detailed matters concerning procedures for filing applications for recognition of the outcomes of earlier reduction, detailed criteria for recognition, evaluation methods and other matters, and publicly notify matters so determined in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 20 (Adjustment of Allocation Following Revisions to Allocation Plans) |
| (1) | When the total emission allowances increase following a revision to an allocation plan pursuant to Article 16 (1) 1 of the Act, the Minister of Environment may additionally allocate emission permits equivalent to the total emission allowances so increased to all business entities eligible for allocation in proportion to the respective existing allocations or additionally allocate all or some of the increased number of emission permits to a specific sector or type of business. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | The Minister of Environment shall determine additional allocations under paragraph (1) in consultation with the competent authorities by sector and through deliberation and adjustment by the deliberation committee on determinations of allocation. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 21 (Adjustment of Allocation by Applications) |
| (1) | If a business entity eligible for allocation has emissions increased in excess of the emission permits allocated to the business entities due to the establishment and expansion of facilities or acquisition of or merger with some places of business under Article 16 (1) 2 of the Act (hereinafter referred to as “establishment, expansion, etc.”), such business entity may file an application for the additional allocation of emission permits with the Minister of Environment within three months after the last day of each compliance year. <Amended by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | Upon receipt of an application filed under paragraph (1), the Minister of Environment shall determine the volume by which emissions are to be increased based on the criteria applied to the relevant business entity eligible for allocation at the time of determining the number of emission permits allocated to each business entity eligible for allocation under Article 16 or by the benchmarking method, and additionally allocate emission permits equivalent to the determined volume of emissions to be increased within five months after the last day of the pertinent compliance year. In such cases, the additionally allocated emission permits shall be allocated as emission permits for the compliance year in which the ground for additional allocation arises. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | If a business entity eligible for allocation has emissions increased by at least 30/100 of the emission permits allocated to the business entities in the pertinent compliance year due to a change in the range of products, a revision to the business plan (excluding any revision due to the establishment, expansion, etc. of facilities), etc., under Article 16 (1) 2 of the Act, such business entity may file an application for the additional allocation of emission permits with the Minister of Environment within three months after the last day of each compliance year. <Amended by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | Upon receipt of an application filed under paragraph (3), the Minister of Environment shall determine the volume by which emissions are to be increased based on the criteria applied to the relevant business entity eligible for allocation at the time of determining the number of emission permits allocated under Article 16 or by the benchmarking method and additionally allocate emission permits within 50/100 of the determined volume of emissions to be increased within five months after the last day of the pertinent compliance year. In such cases, the additionally allocated emission permits shall be allocated as emission permits for the compliance year in which the ground for additional allocation arises. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (5) | When power generation is increased or decreased due to regulated power generation [referring to power generation under the direction of the Korea Power Exchange established under Article 45 of the Electric Utility Act with respect to restrictions (excluding where the person in question gives a cause) for the operation of electric power systems, such as a power generator failure, power cable failure, regulated heat supply and fuel and regulated power transmission; hereafter referred to as "regulated power generation" in this Article] under Article 16 (1) 2 of the Act, a business entity eligible for allocation which engages in the power industry may file an application for the additional allocation of emission permits or adjustment of emission permits for each business entity with the Minister of Environment within three months after the last day of the pertinent compliance year. <Amended by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| (6) | Upon receipt of an application filed under paragraph (5), the Minister of Environment may additionally allocate emission permits equivalent to power generation so increased or adjust the number of emission permits allocated to the business entity who gives a cause for regulated power generation and to any business entity, the power generation of which is increased thereby. <Newly Increased by Presidential Decree No. 27953, Mar. 27; Presidential Decree No. 28562, Dec. 29, 2017> |
| (7) | A business entity eligible for allocation of which emissions are increased due to additional operation of aircrafts for compliance of technical standards for operation under Article 74-2 of the Aviation Act may apply for additional allocation of emission permits to the Minister of Environment within three months from the termination date of the relevant compliance year. <Newly Inserted by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| (8) | Upon receipt of an application filed under paragraph (7), the Minister of Environment may additionally allocate emission permits corresponding to emissions increased by additional operation of aircrafts to ensure the safe operation of aircrafts. <Newly Inserted by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| (9) | The Minister of Environment shall determine detailed matters necessary for determining additional allocation of emission permits and adjusting the number of emission permits allocated under paragraphs (2), (4), (6) and (8) jointly with the competent authorities by sector, and publicly notify such matters in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| (10) | Emission permits additionally allocated under paragraphs (2), (4), (6) and (8) shall arise from reserve emission permits. <Amended by Presidential Decree No. 27953, Mar. 27, 2017> |
| (11) | The Minister of Environment shall determine additional allocation of emission permits and adjustment of the number of emission permits allocated under paragraphs (2), (4), (6) and (8) in consultation with the competent authorities by sector and through deliberation and adjustment by the deliberation committee on determinations of allocation. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| (12) | A business entity eligible for allocation which intends to adjust allocation by compliance year due to a revision to its business plan, etc. under Article 16 (1) 2 of the Act may file an application for the adjustment of allocations with the Minister of Environment by no later than four months prior to the beginning of each compliance year. In such cases, the Minister of Environment may adjust allocation by compliance year within the scope not changing the total number of emission permits allocated to the relevant business entity eligible for allocation in the commitment period after reviewing the ground for filing the application. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 22 (Revocation of Allocation of Emission Permits) |
| (1) | When the total emission allowances decrease following a revision to an allocation plan pursuant to Article 17 (1) 1 of the Act, the Minister of Environment may revoke emission permits equivalent to the total emission allowances so decreased from all business entities eligible for allocation in proportion to the respective existing allocation or revoke all or some of reduced emission permits from a specific sector or type of business. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | When a business entity eligible for allocation closes all of its facilities pursuant to Article 17 (1) 2 of the Act, the Minister of Environment shall revoke emission permits allocated to the business entity eligible for allocation in proportion to the number of remaining days in the pertinent compliance year from the date of closure of facilities and emission permits allocated for the period from the following compliance year to the last compliance year. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | When Article 17 (1) 3 of the Act applies, the Minister of Environment shall revoke emission permits allocated to a business entity eligible for allocation in proportion to the portion of inoperative facilities in the allocation and the number of days on which facilities are inoperative. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | When the facilities of a business entity eligible for allocation are inoperative for at least one year pursuant to Article 17 (1) 4, the Minister of Environment shall revoke emission permits in proportion to the portion of the inoperative facilities in the allocation and to the number of days on which the facilities are inoperative among emission permits allocated to the business entity eligible for allocation. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (5) | When a business entity eligible for allocation is found to have obtained the allocation of emission permits by fraud or other illegal means pursuant to Article 17 (1) 5 of the Act (including a failure to operate facilities in line with a facility operation plan or facility establishment or expansion plan which is considered at the time of allocation of emission permits without a just ground or a failure to establish or expand facilities), the Minister of Environment shall revoke emission permits corresponding to such portion allocated to the business entity eligible for allocation. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (6) | When there is a ground for revoking the allocation of emission permits under paragraphs (2) through (4), the relevant business entity eligible for allocation shall give notice thereof to the Minister of Environment within 30 days from the date such ground arises. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (7) | When there is a ground for revoking the allocation of emission permits under paragraph (1) through (5), the Minister of Environment may conduct a fact-finding survey on the relevant business entity eligible for allocation under Article 37 of the Act. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (8) | The Minister of Environment shall determine the revocation of allocation of emission permits under paragraphs (1) through (5) in consultation with the competent authorities by sector and through deliberation and adjustment by the deliberation committee on determinations of allocation. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (9) | The revocation of allocation of emission permits under paragraphs (1) through (5) shall be done in such a manner that the Minister of Environment transfers emission permits from the emission trading account of the relevant business entity eligible for allocation to the emission trading account for reserve emission permits under Article 24 (5) 2. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (10) | Except as otherwise expressly provided for in paragraphs (1) through (9), the Minister of Environment shall determine detailed matters concerning revocation of allocation of emission permits jointly with the competent authorities by sector. and publicly notify such matters in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
CHAPTER IV TRADING OF EMISSION PERMITS
| Article 23 (Minimum Trading Unit, etc. of Emission Permits) |
| (1) | A greenhouse gas shall be traded by converting it into tons of comparable CO2 equivalents (tCO2-eq) according to the global warming potentials by greenhouse gas listed in attached Table 2 and converting one ton of comparable CO2 equivalents (tCO2-eq) into one emission permit. |
| (2) | The minimum trading unit of an emission permit is one emission permit. |
| Article 24 (Registration, etc. of Emission Trading Accounts) |
| (1) | A person who intends to trade an emission permit shall file an application for registration of emission trading accounts with the Minister of Environment by electronic means pursuant to Article 20 of the Act. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | In receipt of an application filed under paragraph (1), the Minister of Environment shall register the emission trading account of the applicant in the emission permits register without delay. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | Notwithstanding paragraphs (1) and (2), the Minister of Environment shall, ex officio, register the emission trading accounts of business entities eligible for allocation in the emission permits register. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | "Cases prescribed by Presidential Decree" in Article 20 (2) of the Act means where a foreign corporation or individual is permitted to trade an emission permit in accordance with a treaty or international agreement to correlate or integrate emission trading markets. |
| (5) | The Minister of Environment may register the following emission trading accounts, where necessary: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | An emission trading account for the allocation of emission permits under Article 12; |
| 2. | An emission trading account for emission permits in reserve under Article 18; |
| 4. | Other emission trading accounts for business affairs deemed necessary for ensuring the stability of emission trading markets. |
| Article 25 (Reporting on Trading of Emission Permits) |
| (1) | A person who trades an emission permit shall submit a trading report stating the following matters to the Minister of Environment by electronic means pursuant to Article 21 of the Act: <Amended by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Type and number of emission permits traded; |
| 2. | A notarized emission trading agreement between transferor and transferee: Provided, That it is excluded where emission permits are transferred not by trading, but by inheritance or a merger of corporations; |
| 3. | Other matters determined by a public notice under paragraph (3). |
| (2) | Upon receipt of a trading report submitted under paragraph (1), the Minister of Environment shall ascertain the following matters without delay and register by transferring the type and number of the reported emission permits from the emission trading account of the transferor to that of the transferee: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| 3. | Whether agreement is reached between transferor and transferee. |
| (3) | Except as otherwise expressly provided for in Articles 23 and 24 and paragraphs (1) and (2) of this Article, the Minister of Environment shall determine detailed matters concerning the trading of emission permits, registration of emission trading accounts, registration fees under subparagraph 2 of Article 39 of the Act, reporting on the trading of emission permits and other matters, and publicly notify such matters in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 26 (Establishment, Designation and Supervision of Emission Permits Exchanges) |
| (1) | The Minister of Environment may establish an emission permits exchange under Article 22 of the Act (hereinafter referred to as "emission permits exchange") in consultation with the heads of relevant central administrative agencies or designate an emission permits exchange in receipt of applications from institutions, etc. able to conduct business affairs concerning the trading of emission permits. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | When the Minister of Environment intends to establish or designate an emission permits exchange pursuant to paragraph (1), he/she shall submit the relevant case for deliberation by the Green Growth Committee. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | "Important matters prescribed by Presidential Decree" in the latter part of Article 22 (2) of the Act means the matters referred to in subparagraphs 2 through 4 and 6 of the same paragraph and paragraph (4) 1 and 3 of this Article. |
| 1. | Matters concerning the opening, closure and suspension of emission permits exchanges; |
| 2. | Matters concerning business activities of members of emission permits exchanges under Article 22 (3) of the Act in emission trade markets; |
| 3. | Matters concerning acceptance of entrustment of trading of emission permits by companies that brokering transactions of emission permits under Article 29. |
| (5) | The Minister of Environment shall supervise emission permits exchanges in order to maintain the stability of and orderly trading in emission trade markets. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (6) | The Minister of Environment may revoke the designation of the emission permits exchange, in any of the following cases: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | When an emission permits exchange fails to be equipped with human resources, technology, facilities, equipment, etc. for business affairs to trade emission permits; |
| 2. | When an emission permits exchange is found impossible to be operated in a sound manner any more as a result of supervision under paragraph (5). |
| (7) | When the Minister of Environment intends to revoke designation of an emission permits exchange pursuant to paragraph (6), it shall hold a hearing. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (8) | Except as otherwise expressly provided for in paragraphs (1) through (7), the Minister of Environment shall determine detailed matters concerning requirements for applying for designation as emission permits exchanges, documents to be submitted at the time of applying for designation, criteria for evaluation, supervision and revocation of designation, etc., and publicly notify such matters in the Official Gazette. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 27 (Business Affairs of Emission Permits Exchanges) |
An emission permits exchange shall conduct the following business affairs:
| 1. | Business affairs concerning the establishment and operation of emission trade markets; |
| 2. | Business affairs concerning the purchase and sale of emission permits; |
| 3. | Business affairs concerning the confirmation of purchase and sale following the trading of emission permits, underwriting of liabilities, deduction, determination of emission permits to be settled, items of settlement and amount of settlement, performance guarantee for settlement, treatment following failure to make settlements, and instructions to make settlements; |
| 4. | Business affairs concerning examination of and supervision over abnormal trading, such as trading in which prices for items for purchase and sale of, and the trading volume of, emission permits fluctuate; |
| 5. | Business affairs concerning auctioning emission permits; |
| 6. | Business affairs concerning autonomous mediation of disputes related to the purchase and sale of emission permits (only when requested by parties concerned); |
| 7. | Business affairs incidental to the establishment of emission trade markets; |
| 8. | Other business affairs prescribed by operating regulations under Article 22 (2) of the Act, as deemed necessary by the head of an emission permits exchange. |
| Article 28 (Trading of Emission Derivatives) |
| Article 29 (Companies Brokering Transactions of Emission Permits) |
| (2) | An emission trade brokerage company shall file for registration with the Minister of Environment after satisfying the requirements for registration the Minister of Environment determines and publicly notifies in the Official Gazette. Any person who fails to file for registration shall not engage in the brokerage of transactions of emission permits. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | An emission trade brokerage company shall observe a business standard the Minister of Environment determines and publicly notifies in the Official Gazette. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | When an emission trade brokerage company fails to observe a business standard referred to in paragraph (3), the Minister of Environment may revoke the registration of the relevant company. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 30 (Criteria, etc. for Measures for Market Stabilization) |
| (2) | "Cause or event prescribed by Presidential Decree" in Article 23 (1) 2 of the Act means where the average trading volume of the last one month is increased by at least twice the larger one of the monthly average trading volume of the same months in the immediately preceding two years and the average emission price of the last one month is higher than at least twice the average emission price in the immediately preceding two years. |
| (3) | "Cause or event prescribed by Presidential Decree" in Article 23 (1) 3 of the Act means either of the following cases: <Amended by Presidential Decree No. 27953, Mar. 27, 2017> |
| 1. | Where the average price of a emission permit for the last one month is lower than 60/100 of the average price of a emission permit for the immediately preceding two years; |
| 2. | Where it is impracticable for business entities eligible for allocation to trade emission permits, as emission trading markets significantly lack supplies of emission permits for the reason that the business entities eligible for allocation does not trade its emission permits. |
| (4) | When the Minister of Environment deems it impracticable to achieve the objectives by other market stabilization measures, he/she may set a minimum or maximum holding limit of emission permits under Article 23 (2) 2 of the Act through deliberation by the Allocation Committee: Provided, That when it is deemed that the objective of market stabilization is achieved, he/she shall withdraw such holding limits immediately. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (5) | A minimum or maximum holding limit of emission permits referred to in paragraph (4) shall be set within the scope as classified in the following: Provided, That such maximum holding limit may be set otherwise for trading participants who holds not more than 25,000 emission permits on average in the immediately preceding six months (excluding business entities eligible for allocation): |
| 1. | Minimum holding limits: At least 70/100 of emission permits for the pertinent compliance year, which are allocated to a business entity eligible for allocation; |
| 2. | Maximum holding limits: Not exceeding 150/100 of emission permits for the pertinent compliance year, which are allocated to a business entity eligible for allocation (in the case of a trading participant, other than business entities eligible for allocation, referring to the average amount of emission permits held in the immediately preceding six months). |
| 1. | Increase or decrease in borrowing limits of emission permits under Article 36 (2); |
| 2. | Increase or decrease in surrender limits of offset emission permits under Article 38 (4); |
| 3. | Setting the temporary maximum or minimum purchase and sale prices of emission permits. |
| (7) | When the Minister of Environment deems that the objective of market stabilization is achieved, he/she may cease market stabilization measures through deliberation by the Allocation Committee: Provided, That the Minister of Environment shall cease market stabilization measures when the Allocation Committee resolves to cease market stabilization measures. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (8) | When the Minister of Environment takes or cease market stabilization measures, he/she shall publicly announce the principal ground for taking the market stabilization measures, the details thereof, the fact of ceasing such measures, etc. immediately. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (9) | Except as otherwise expressly provided for in paragraphs (1) through (8), the Minister of Environment shall determine the detailed matters necessary for the specific means of implementation and its procedures of market stabilization measures, and publicly notify such matters in the Official Gazette. <Newly Inserted by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
CHAPTER V REPORTING, VERIFICATION AND CERTIFICATION OF EMISSION LEVELS
| Article 31 (Reporting and Verification of Amounts of Emissions) |
| (1) | A report referred to in Article 24 (1) of the Act shall include the following matters: <Amended by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28234, Aug. 9, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Size, and fuel and raw material consumption and production by major production facility and process of a business entity; |
| 2. | Kind and volume of greenhouse gases emitted by place of business, and kind, size, number and working rate of greenhouse gas emitting facilities (including newly established, expanded and closed facilities); |
| 3. | Kind of energy used and generated by place of business and the volume uses, generated and sold, ingredients in fuels used, and kind, size, number and working rate of facilities using and generating energy; |
| 4. | Volume, kind and scale of greenhouse gases emitted, classified by production processes, production facilities and emission activities; |
| 5. | Volume of greenhouse gases emitted and amount of energy used by process and product item (limited to the allocation of emission permits to business entities eligible for allocation by the benchmarking method); |
| 6. | Kind and volume of greenhouse gases captured and disposed of; |
| 7. | Methods of and basis for calculation and measurement of volume of greenhouse gases emitted by sector under subparagraphs 2 through 6; |
| 8. | Quality control procedures of reports; |
| 9. | Absorption and removal performance of greenhouse gases; |
| 10. | Monitoring plans for collecting activity data and determining parameters; |
| 11. | Sales of business entities or places of business; |
| 12. | Reduction performance by facility of a business entity or place of business (limited to cases such facilities have greenhouse gas reduction performances); |
| 13. | Other matters publicly notified by the Minister of Environment in consultation with the heads of relevant central administrative agencies. |
| (2) | A business entity eligible for allocation shall submit a report under paragraph (1) pursuant to Article 24 (1) of the Act and a verification report of a verifying institution referred to in Article 32 to the Minister of Environment by electronic means. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | If any error or ommission is found in the data submitted under paragraph (2), the Minister of Environment may order the relevant business entity eligible for allocation to correct or supplement such data. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | The Minister of Environment shall manage all data submitted under paragraph (2) by including such data in the emission permits register. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (5) | The Minister of Environment may disclose major information, such as the total greenhouse gas emissions by each business entity eligible for allocation, among information included in the data submitted under paragraph (2): Provided, That a business entity eligible for allocation may request non-disclosure when its rights or confidential business information are at risk of being infringed on by the disclosure of information. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (6) | When the Minister of Environment receives a request for non-disclosure under the proviso to paragraph (5), he/she shall determine disclosure or non-disclosure through examination by the committee for examination on disclosure of statements referred to in Article 35 (5) of the Enforcement Decree of the Framework Act and notify the relevant business entity eligible for allocation of the results thereof immediately. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (7) | Except as otherwise expressly provided for in paragraphs (1) through (6), the Minister of Environment shall determine detailed matters concerning submission of the statements and disclosure of information jointly with the competent authorities by sector and publicly notify such matters in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 32 (Verification of Emission Levels, and Designation etc. of Verifying Institutions) |
| (1) | An independent specialized institution which verifies reports submitted by business entities eligible for allocation pursuant to Article 24 (2) of the Act (hereinafter referred to as "verifying institution") shall be an institution the Minister of Environment designates and publicly notifies in the Official Gazette among institutions satisfying all of the following requirements: Provided, That a verifying institution designated under Article 32 of the Enforcement Decree of the Framework Act (excluding any institution which become business entities eligible for allocation) shall be deemed designated as a verifying institution under this Decree: <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | It shall be equipped with professional human resources, facilities, equipment, etc. to be able to professionally measure, report and verify greenhouse gas emission levels; |
| 2. | It shall purchase a liability insurance policy to pay indemnities in an amount of at least one billion won in connection with the verification of greenhouse gas emission levels; |
| 3. | It shall satisfy other requirements determined in the public notice given under paragraph (6). |
| (2) | If any of the following applies to a verifying institution when it verifies a report of a business entity eligible for allocation, it shall give notice thereof to the business entity eligible for allocation and the business entity eligible for allocation shall make necessary corrections with respect to the matters it is given notice of: |
| 1. | Where a report is not prepared in a measurable, reportable and verifiable manner; |
| 2. | Where a report fails to comply with a monitoring plan under Article 31 (1) 10; |
| 3. | Where actual emission levels are different from the details of a report. |
| (3) | Where any of the following applies to a verifying institution, the Minister of Environment may revoke the designation of the verifying institution under paragraph (1): Provided, That he/she shall revoke designation when subparagraph 1 or 3 applies to a verifying institution (in cases falling under subparagraph 3, limited to intentional cases): <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Where a verifying institution is designated as a verifying institution by false or other illegal means; |
| 2. | Where a verifying institution fails to satisfy the requirements for designation under paragraph (1); |
| 3. | Where a serious error, etc. caused intentionally or by gross negligence is found in the results of verification . |
| (4) | Where the Minister of Environment intends to revoke designation of a verifying institution pursuant to paragraph (3), he/she shall hold a hearing. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (5) | Deleted. <by Presidential Decree No. 28562, Dec. 29, 2017> |
| (6) | Except as otherwise expressly provided for in paragraphs (1) through (4), the Minister of Environment shall determine detailed matters concerning the designation of verifying institutions, duties of verification and revocation of designation and publicly notify such matters in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 33 (Certification of Amounts of Emissions) |
| (1) | Where the Minister of Environment certifies the actual amount of greenhouse gas emissions produced by a business entity eligible for allocation pursuant to Article 25 (1) of the Act, he/she shall refer the relevant matter to the Emissions Certification Committee established under Article 26 of the Act for deliberation. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | The Minister of Environment may order a business entity eligible for allocation which fails to report the amount of emissions by the deadline under Article 24 (1) of the Act to submit a report within a given period not exceeding one month. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | Where a business entity eligible for allocation fails to report the amount of emissions even after the deadline for submission of reports under paragraph (2), the Minister of Environment may, ex officio, calculate and certify the amount of greenhouse gas emissions produced by the business entity eligible for allocation after conducting a fact-finding survey pursuant to Article 37 of the Act: Provided, That if it is impracticable to calculate the amount of greenhouse gas emissions by conducting a fact-finding survey, the Minister of Environment may, ex officio, calculate and certify the amount of emissions based on the previous amount of emissions of the relevant business entity eligible for allocation or amounts of emissions of other business entities eligible for allocation of the same type or in a similar size. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | Deleted. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (5) | When the Minister of Environment notifies a business entity eligible for allocation of the results of certifying the amount of emissions pursuant to Article 25 (3) of the Act, he/she shall also notify the details thereof to the competent authorities by sector. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (6) | Except as otherwise expressly provided for in paragraphs (1) through (5), the Minister of Environment shall determine detailed matters concerning criteria for certifying the amount of emissions, procedure of certification and other matters jointly with the competent authorities by sector, and publicly notify such matters in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 34 (Emissions Certification Committee) |
| (1) | The Emissions Certification Committee referred to in Article 26 of the Act (hereinafter referred to as the "Certification Committee") shall be comprised of one Chairperson and no more than 15 members. |
| (2) | The Vice Minister of Environment shall become the Chairperson of the Certification Committee and the following persons shall become the members thereof: <Amended by Presidential Decree No. 24429, Mar. 23, 2013; Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Persons nominated by the heads of the relevant institutions from among members of the Senior Executive Service of relevant central administrative agencies deemed necessary by the Chairperson of the Certification Committee and the Ministry of Strategy and Finance, the Ministry of Agriculture, Food and Rural Affairs, the Ministry of Trade, Industry and Energy, the Ministry of Environment, the Ministry of Land, Infrastructure and Transport, the Office for Government Policy Coordination, Korea Forest Service; |
| 2. | Persons commissioned by the Minister of Environment from among experts in relevant industrial, research or academic fields upon the recommendations of the heads of relevant central administrative agencies. |
| (3) | The Certification Committee shall deliberate on and moderate the following matters: |
| 2. | Findings from evaluation of feasibility of external projects under Article 39; |
| 3. | Findings from evaluation of validity of greenhouse gas reductions from external projects under Article 40; |
| (4) | Meetings of the Certification Committee shall be held with the presence of a majority of all incumbent members and pass resolutions with the affirmative vote of a majority of members present. |
| (5) | Except as otherwise expressly provided for in paragraphs (1) through (4), the Chairperson of the Certification Committee shall determine matters necessary for the organization and operation of the Certification Committee through resolution by the Certification Committee. |
| Article 34-2 (Dismissal of Members of Certification Committee) |
Where a commissioned member of the Certification Committee under Article 34 (2) 2 falls under any of the following, the Minister of Environment may dismiss the relevant member: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> | 1. | Where he/she becomes unable to perform his/her duties due to mental disorder; |
| 2. | Where he/she has committed any misconduct related to his/her duties; |
| 3. | Where it is deemed that he/she is not suitable for a member due to neglect of duty, injury to dignity and other reasons; |
| 4. | Where he/she indicates his/her intention by himself/herself that it is difficult for him/her to perform his/her duties. |
[This Article Newly Inserted by Presidential Decree No. 27181, May 24, 2016]
CHAPTER VI SURRENDER, CARRYOVER, BORROWING, SETOFF AND TERMINATION OF EMISSION PERMITS
| Article 35 (Surrender of Emission Permits) |
| (1) | Each business entity eligible for allocation shall file a statement of the surrender of emission permits (hereafter referred to as "statement" in this Article) which states the following matters with the Minister of Environment within six months from the last day of the compliance year (when an objection is filed for a reason falling under any of the subparagraphs 3 through 5 of Article 38 (1) of the Act, within ten days from the date the results of the filed objection are notified) to surrender emission permits under Article 27 (1) of the Act: <Amended by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Registration numbers of the emission permits register and the offset register referred to in Article 31 of the Act (hereinafter referred to as "offset register") of the relevant business entity eligible for allocation; |
| (2) | When the Minister of Environment finds any defect in the review of a statement it receives, he/she shall request the relevant business entity eligible for allocation to correct the relevant matters immediately or correct such matters ex officio. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | When the Minister of Environment finds no defect in the review of a statement it receives, he/she shall register it in the emission permits register without delay, and transfer the surrendered emission permits from the emission trade account of the relevant business entity eligible for allocation to the emission trade account under Article 24 (5) 3 and discard the emission permits. <Amended by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | The surrender of emission permits under Article 27 (1) of the Act shall be done by emission permits allocated for the compliance year in which greenhouse gases required to surrender emission permits are emitted or by emission permits carried over from the preceding compliance year or borrowed from the following compliance year, or by offset emission permits under Article 29 (3) of the Act. |
| Article 36 (Borrowing of Emission Permits) |
| (1) | "Ground prescribed by Presidential Decree" in Article 28 (2) of the Act means where it is impracticable to completely fulfill the duty to surrender emission permits, as the number of emission permits held is less than the number of emission permits to be surrendered at the time of surrendering emission permits under Article 27 (1) of the Act. |
| (2) | The borrowing limits of emission permits under Article 28 (3) of the Act shall be calculated by the following formulas. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28234, Aug. 9, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | The first compliance year of the relevant commitment period: the number of emission permits to be surrendered to the Minister of Environment by the relevant business entity eligible for allocation x 15/100; |
| 2. | From the second compliance year of the relevant commitment period until the compliance year immediately before the last compliance year: the number of emission permits to be submitted to the Minister of Environment by the relevant business entity eligible for allocation x [the borrowing limits of emission permits of the immediately previous year during the relevant commitment period - (the ratio of number of borrowed emission permits out of the number of emission permits to be surrendered in the immediately previous year during the relevant commitment period x 50/100)]. |
| Article 37 (Procedures for Carryover and Borrowing of Emission Permits) |
| (1) | A business entity eligible for allocation which intends to carry over or borrow emission permits pursuant to Article 28 of the Act shall file an application for carryover or borrowing of emission permits, with the Minister of Environment by electronic means within ten days from the date classified as follows: <Amended by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Where it is notified of the results of certifying the amount of greenhouse gas emissions under Article 25 of the Act: the date on which it is notified of; |
| 2. | Where an objection is filed due to a reason falling under any of the subparagraphs 3 through 5 of Article 38 (1) of the Act: the date on which it is notified of the results of filing the objection. |
| (2) | A person who holds emission permits, other than a business entity eligible for allocation, shall file an application for carryover of the emission permits he/she holds, with the Minister of Environment by electronic means within ten days from the date five months pass from the last day of a compliance year. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | The Minister of Environment shall review applications filed under paragraphs (1) and (2) and determine approval or non-approval thereof by no later than ten days prior to the deadline for the surrender of emission permits under Article 35 (1) and notify the relevant applicants of the results thereof without delay. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (1) | Greenhouse-gas reductions from an external project, a business entity eligible for allocation may request the Minister of Environment to convert which into emission permits pursuant to Article 29 (1) of the Act shall be limited to greenhouse gas reductions generated and certified within the scope of details of projects registered in the offset register. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | The conversion standards of emission permits under Article 29 (2) of the Act shall be the conversion of 1 ton of comparable CO2 equivalents (tCO2-eq) of greenhouse gas reductions from an external project under paragraph (1) to one emission permit. |
| (3) | Where the Minister of Environment certifies greenhouse gas reductions achieved through a clean development mechanism project referred to in Article 12 of the Kyoto Protocol to the United Nations Framework Conventions on Climate Change (including any project performed within a business entity eligible for allocation and hereinafter referred to as "clean development mechanism project"), he/she shall take necessary measures to prevent unjust enrichment from double sale, etc. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | The limit of surrender of offset emission permits that can be surrendered under the latter part of Article 29 (3) of the Act shall be determined by the allocation plan within 10/100 of emission permits to be surrendered by a business entity eligible for allocation to the Minister of Environment pursuant to Article 27 (1) of the Act. In such cases, an offset emission permit converted from the reductions of greenhouse gases generated through an external project performed in any foreign nation shall not exceed 50/100 of the limit of surrender of offset emission permits. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (5) | An offset emission permit becomes void after the following relevant period elapses: <Amended by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Where it is not surrendered to the Minister of Environment pursuant to Article 29 (3) of the Act or is not carried over to the following compliance year pursuant to Article 28 of the Act: six months from the date of termination of each compliance year; |
| 2. | Where an objection is filed due to a reason falling under any of the subparagraphs 3 through 5 of Article 38 (1) of the Act: ten days from the date on which the results of filing an objection are notified. |
| Article 39 (Evaluation of Propriety and Approval of External Projects) |
| (1) | Where it is necessary to certify greenhouse gas reductions from an external project pursuant to Article 30 (1) of the Act, the competent authorities by sector may approve the external project after the feasibility evaluation of the relevant external project, consultation with the Minister of Environment, and deliberation of the Certification Committee. In such cases, the competent authorities by sector may approve the external project by determining the term of its validity. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | Where a person who conducts an external project applies for approval of the external project pursuant to paragraph (1), the competent authorities by sector shall evaluate the feasibility of the relevant external project by reviewing the following matters: Provided, That the project for forest carbon offset recognized as feasible pursuant to Article 19 (3) of the Act on the Management and Improvement of Carbon Sink, from among projects falling under paragraph (1) 1 of the same Article, shall be deemed to have undergone the feasibility evaluation by the competent authorities by sector: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Whether any additional effort beyond activities which can be done in general business management conditions is made to reduce greenhouse gases artificially; |
| 2. | Whether the effect of greenhouse gas reduction which is achieved through a greenhouse gas reduction project is sustainable in a long term; |
| 3. | Whether it is possible to reduce greenhouse gases to the extent that greenhouse gas reductions are measurable through a greenhouse gas reduction project; |
| 4. | Whether a greenhouse gas reduction project complies with standards and methods determined in the public notice given under paragraph (5). |
| (3) | Where the Certification Committee deliberates on external projects pursuant to paragraph (1), it shall take the following into account: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Matters concerning the sustainability of offset performance and possibility of standardized verification; |
| 2. | Matters concerning the appropriateness of the methods of performing offset projects and monitoring. |
| (4) | The competent authorities by sector shall manage external projects approved under paragraph (1) upon registering them in the offset register. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (5) | Except as otherwise expressly provided for in paragraphs (1) through (4), the competent authorities by sector shall jointly determine detailed matters concerning criteria and procedures for approval for external projects, such as the term of validity of external projects, and publicly notify such matters in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (6) | "Projects prescribed by Presidential Decree" in Article 30 (1) 2 of the Act means clean development mechanism projects and external projects equivalent thereto, and the competent authorities by sector shall jointly determine the types of such projects and publicly notify them in the Official Gazette. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 40 (Certification of Greenhouse Gas Reductions from External Projects) |
| (1) | A person who intends to obtain certification of greenhouse gas reductions from an external project pursuant to Article 30 (2) of the Act shall file an application with the competent authorities by sector, along with the following documents: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | A reductions monitoring report prepared by an external project operator; |
| 2. | A verification report of a verifying institution; |
| 3. | Other data deemed necessary by the competent authorities by sector for the certification of greenhouse gas reductions. |
| (2) | Any person who applies for certification of greenhouse gas reductions under paragraph (1), where he/she has obtained a certificate under Article 21 (1) of the Act on the Management and Improvement of Carbon Sink, may request the Minister of Korea Forest Service to submit the results of certification and matters reviewed during the relevant certification to the competent authorities by sector. In such cases, the Minister of Korea Forest Service in receipt of such request shall cooperate therein, except in extenuating circumstances. <Newly Inserted by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | Upon receipt of an application filed under paragraph (1), the competent authorities by sector shall certify greenhouse gas reductions from an external project in consideration of matters examined at the time of granting approval for the external project under Article 39 and the results of certification and matters reviewed which the Minister of Korea Forest Service has submitted under latter part of paragraph (2) after consultation with the Minister of Environment and deliberation by the Certification Committee. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| (4) | Where the competent authorities by sector grant certification under paragraph (3), it shall not certify greenhouse gas reductions from external projects performed in any foreign nation during the first commitment period and second commitment period: Provided, That it may certify greenhouse gas reductions generated after June 1, 2016 from clean development mechanism projects under Article 39 (6) which domestic enterprises, etc. directly implement in any foreign nation, from the second commitment period. <Newly Inserted by Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| (5) | Deleted. <by Presidential Decree No. 28562, Dec. 29, 2017> |
| (6) | Except as otherwise expressly provided for in paragraphs (1) and (4), the competent authorities by sector shall jointly determine detailed matters concerning the certification of greenhouse gas reductions from external projects, such as criteria for domestic enterprises and criteria for projects directly implemented in any foreign nation, and publicly notify such matters in the Official Gazette. <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 41 (Management, Operation, etc. of Offset Register) |
| (1) | The Minister of Environment shall manage the offset register by electronic means so that it can be managed in a consistent and systematic manner for the verification, certification, etc. of greenhouse gas reductions from external projects. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | The following matters shall be registered in the offset register: <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | An external project plan; |
| 2. | Certification performance of greenhouse gas reductions from external projects; |
| 3. | Other matters the Minister of Environment publicly notifies in the Official Gazette, as deemed necessary. |
| (3) | Articles 9 (2), 10 and 11 shall apply mutatis mutandis to the inspection, disclosure, revision, etc. of information registered in the offset register. In such cases, "emission permits register" and "person who has filed for registration of an emission trading account" shall be construed as "offset register" and "person who has filed for registration of an external project in the offset register," respectively. |
| Article 42 (Penalty Surcharges) |
| (1) | The imposition standard of penalty surcharges under Article 33 (1) of the Act shall be three times the average market price of emission permits calculated by dividing the sum of trading amounts of emission permits traded in an emission permits exchange under Article 22 of the Act by total trading volume in the compliance year in which the obligation to surrender emission permits is imposed. <Amended by Presidential Decree No. 27953, Mar. 27, 2017> |
| (2) | The Minister of Environment shall notify business entities eligible for allocation which fail to surrender emission permits equal to the amount of greenhouse gas emissions certified under Article 25 of the Act even after the deadline for surrender of emission permits referred to in Article 27 of the Act of the ground for imposition, estimated amount, payment due date, etc. of a penalty surcharge and provide such business entities with an opportunity to present opinions within a given period not exceeding ten days. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (3) | When a business entity eligible for allocation fails to present its opinion during the period for presenting opinions referred to in paragraph (2), the Minister of Environment shall impose a penalty surcharge upon the relevant business entity eligible for allocation in the estimated amount and by the due date it has notified. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| Article 43 (Additional Dues for Penalty Surcharges) |
Pursuant to Article 34 (1) of the Act, the Minister of Environment shall collect an additional due equivalent to 12/1,000 of a defaulted penalty surcharge for every month elapsing from the date the payment due date expires: Provided, That the period in which additional dues are collected shall not exceed 60 months. <Amended by Presidential Decree No. 28562, Dec. 29, 2017>
CHAPTER VII SUPPLEMENTARY PROVISIONS
| Article 44 (Financial Support and Tax Incentives) |
| 1. | Projects for developing and distributing technology, products, facilities and equipment related to greenhouse gas reduction; |
| 2. | Projects for measuring amounts of greenhouse gas emissions and for constructing systems for systematically managing amounts of greenhouse gas emissions; |
| 3. | Projects for developing greenhouse gas storage technology and installing storage facilities; |
| 4. | Projects for developing greenhouse gas reduction models and upgrading of statistics on the emission levels; |
| 5. | Projects for technological development for the verification and evaluation of emission and absorption coefficients of greenhouse gases by sector; |
| 6. | Projects for developing and distributing new renewable energy for greenhouse gas reduction; |
| 7. | Projects for encouraging energy-saving and improvement of energy efficiency and facility investment for greenhouse gas reduction. |
| 8. | Other crucial projects related to greenhouse gas reduction and recognized through deliberation by the Allocation Committee. |
| (2) | When the Government provides support under Article 35 (1) of the Act, it may give priority to supporting projects performed by business entities eligible for allocation to which all emission permits are not allocated gratuitously, based on projects performed by small and medium enterprises referred to in paragraph (2) of the same Article. |
| Article 45 (Institutions Specializing in Trading Emission Permits) |
| (1) | When the Minister of Environment designates an institution specializing in trading emission permits pursuant to Article 36 (2) of the Act (hereinafter referred to as "emission-permit trading institution"), he/she shall take into account the links with the Integrated Information Management System for Greenhouse Gases established under Article 45 of the Framework Act. <Amended by Presidential Decree No. 28562, Dec. 29, 2017> |
| (2) | An institution specializing in trading emission permits shall perform the following duties: |
| 3. | Other duties concerning surveys and research, technological development and international cooperation for the link with international carbon markets. |
| Article 46 Deleted. <by Presidential Decree No. 27181, May 24, 2016> |
A person who files an objection pursuant to Article 38 (1) of the Act shall submit a written objection stating the details of the disposition imposed, details of the objection, etc. to the Minister of Environment along with explanatory materials. <Amended by Presidential Decree No. 28562, Dec. 29, 2017>
A person who shall pay fees pursuant to Article 39 of the Act shall pay a fee determined in the public notice given under Articles 11 (3) and 25 (3) to the Minister of Environment: Provided, That fees for issuing certificates and for applying for registration of emission trading accounts via computerized data processing systems may be exempted. <Amended by Presidential Decree No. 28562, Dec. 29, 2017>
| Article 49 (Delegation of Authority and Entrustment of Business) |
| (1) | The Minister of Environment may delegate its authority over the following to the head of the Integrated Information Center pursuant to Article 40 (1) of the Act: <Amended by Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| 1. | Survey and research concerning the link with international carbon markets and international cooperation prescribed in Article 4 (2) 7 of the Act; |
| 2. | Survey and research concerning the calculation of the total amount of greenhouse gas emission allowances, etc. prescribed in Article 5 (1) 1 of the Act; |
| 3. | Survey and research concerning the reporting of the amount of greenhouse gas emissions and the results of verification thereof provided for in Article 24 of the Act; |
| 4. | Matters concerning disclosure of information under Articles 10 and 31 (5) and (6); |
| 5. | Matters concerning management and operation of the emission permits register and the offset register. |
| 1. | Survey and analysis of materials necessary to establish a master plan, allocation plan, etc.; |
| 3. | Survey and analysis of materials necessary to calculate the ratio related to holding emission permits in reserve prescribed in Article 18 of the Act; |
| 4. | Survey and analysis of materials necessary to stabilize markets for trading emission permits provided for in Article 23 of the Act; |
| 6. | Survey and analysis of materials necessary to consult with the heads of the competent authorities by sector during the procedures for approving external projects prescribed in Article 39 (1) and the procedures for certifying greenhouse gas reductions from external projects prescribed in Article 40 (3) of the Act. |
| (3) | In accordance with Article 40 (2) of the Act, the competent authorities by sector shall entrust the duties related to certification of greenhouse gas reductions from external projects provided for in Article 30 (1) and (2) of the Act to any of the following institutions, as jointly determined and publicly notified in the Official Gazette by the competent authorities by sector: <Amended by Presidential Decree No. 25179, Feb. 13, 2014; Presidential Decree No. 26439, Jul. 24, 2015; Presidential Decree No. 27181, May 24, 2016; Presidential Decree No. 27953, Mar. 27, 2017; Presidential Decree No. 28562, Dec. 29, 2017> |
| 6. | Other institutions determined by the competent authority, which have professional human resources, equipment, etc. necessary to perform relevant the affairs. |
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of promulgation.
Article 2 (Special Cases concerning Registration of Emission Trading Accounts)
| (2) | "Date prescribed by Presidential Decree" in Article 3 of the Addenda to the Act means December 31, 2020. |
Article 3 Deleted. <by Presidential Decree No. 27953, Mar. 27, 2017>
ADDENDA <Presidential Decree No. 24429, Mar. 23, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of promulgation.
Articles 2 through 6 Omitted.
ADDENDA <Presidential Decree No. 25179, Feb. 13, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on February 14, 2014.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 25751, Nov. 19, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of promulgation: Provided, That among the Presidential Decrees amended under Article 5 of the Addenda, amendments to a Presidential Decree, which was promulgated before this Decree enters into force but the date on which in enters into force has yet to arrive, shall enter into force on the enforcement date of the relevant Presidential Decree.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 26439, Jul. 24, 2015>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 29, 2015.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 27181, May 24, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on June 1, 2016.
Article 2 (General Transitional Measures concerning Administrative Dispositions, etc. following Changes of Competent Authorities)
Dispositions, procedures and other acts performed by the Minister of Environment, who is the competent authority under the former Article 6 as at the time this Decree enters into force, shall be regarded as dispositions, procedures and other acts performed by the competent authority under the amended provisions of Article 6, and applications, reports and other acts performed to the Minister of Environment, who is the competent authority under the former Article 6 as at the time this Decree enters into force, shall be regarded as applications, reports and other acts performed to the competent authority under the amended provisions of Article 6. Article 3 (Transitional Measures concerning Establishment of Allocation Plans)
An allocation plan which the Minster of Environment establishes as at the time this Decree enters into force shall be regarded as the allocation plan which the Minister of Strategy and Finance establishes under the amended provisions of Article 3. Article 4 (Transitional Measures concerning Designation of Verification Institution of Emissions)
A verification institution which the Minister of Environment designates as at the time this Decree enters into force shall be regarded as the verification institution which the Minister of Strategy and Finance designates under the amended provisions of Article 32. Article 5 Omitted.
ADDENDA <Presidential Decree No. 27953, Mar. 27, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of promulgation.
Article 2 (Applicability concerning Report and Verification of Emissions)
The amended provisions of Article 31 (1) 12 shall apply from the cases where the statement for the compliance year in which the enforcement date of this Decree is included is submitted.
ADDENDA <Presidential Decree No. 28211, Jul. 26, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That among the Presidential Decrees amended by Article 8 of the Addenda, the amendments to Presidential Decrees which have been promulgated, but of which the enforcement dates have not arrived before this Decree enters into force shall enter into force on the enforcement date of the relevant Presidential Decree, respectively.
Articles 2 through 8 Omitted.
ADDENDA <Presidential Decree No. 28234, Aug. 9, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of promulgation.
Article 2 (Applicability to Borrowing Emission Permits)
The amended provisions of Article 36 (2) shall apply from the cases where the emission permits is borrowed during the commitment period commenced after January 1, 2008.
ADDENDA <Presidential Decree No. 28562, Dec. 29, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of promulgation.
Article 2 (General Transitional Measures concerning Administrative Dispositions, etc. following Change of “Central Administrative Agency prescribed by Presidential Decree” referred to in Article 8, etc. of the Act)
The dispositions, procedures, and any others acts conducted by the competent authority pursuant to the former provisions of Article 6 as at the time this Decree enters into force shall be deemed the dispositions, procedures, and acts conducted by the Minister of Environment pursuant to the amended provisions of Article 6; and the applications, reports and any other acts filed or made to the competent authority pursuant to the former provisions of Article 6 as at the time this Decree enters into force shall be deemed the applications, reports, and acts filed or made to the Minister of Environment pursuant to the amended provisions of Article 6. Article 3 (Transitional Measures concerning Establishment of Master Plans)
A master plan established by the Minister of Strategy and Finance as at the time this Decree enters into force shall be deemed a master plan jointly established by the Minister of Strategy and Finance and the Minister of Environment pursuant to the amended provisions of Article 2. Article 4 (Transitional Measures concerning Establishment of Allocation Plans)
An allocation plan established by the Minister of Strategy and Finance as at the time this Decree enters into force shall be deemed an allocation plan established by the Minister of Environment pursuant to the amended provisions of Article 3. Article 5 (Transitional Measures concerning Designation of Institution for Verifying Emission Levels)
A verifying institution designated by the Minister of Strategy and Finance as at the time this Decree enters into force shall be deemed a verifying institution designated by the Minister of Environment pursuant to the amended provisions of Article 32. Article 6 (Transitional Measures concerning Members of Certification Committee)
Any member of the Certification Committee commissioned by the chairperson of the Certification Committee as at the time this Decree enters into force shall be deemed a member of the Certification Committee commissioned by the Minister of Environment pursuant to the amended provisions of Article 34. Article 7 Omitted.