South Korea Carbon Offset/Carbon Credit Market
South Korea carbon offset and carbon credit market, underpinned by the government’s strong commitment to reducing greenhouse gas emissions. The country’s carbon trading scheme, the Korea Emissions Trading Scheme (K-ETS), was launched in 2015 and is the first nationwide cap-and-trade program in East Asia. The K-ETS is central to South Korea’s efforts to achieve its target of carbon neutrality by 2050, covering around 70% of the country’s emissions.
Under K-ETS, companies that exceed their emissions allowance can purchase carbon credits from companies that have reduced their emissions below the required levels, fostering a market for carbon trading. The carbon offset market is also bolstered by the government’s support for Clean Development Mechanism (CDM) projects, which enable South Korean companies to earn carbon credits by investing in emission reduction projects abroad.
Voluntary carbon offset initiatives are also gaining traction as corporations strive to meet growing consumer demand for sustainable business practices. The market’s growth is driven by both domestic and international demand, as South Korea’s industrial and energy sectors are major contributors to the country’s carbon footprint. However, ensuring the credibility and transparency of offset projects remains a challenge, with a need for more robust monitoring and reporting frameworks to maintain market integrity.
Comprehensive Research Study by Market Research Future (MRFR), Carbon Offset/Carbon Credit Market Information by Type, Project Type, End User, and By Region - Forecast till 2032 The carbon offset/carbon credit industry size shall expand from USD 541.8 Billion in 2023 to USD 4994.3 Billion by 2032, with a CAGR of 32.0% during the appraisal period (from 2024 to 2032).
Organizations can generate verified emission reductions (VERs) in the voluntary carbon offset market by voluntarily lowering their own greenhouse gas emissions. By purchasing VERs, other organizations can offset their excess carbon emissions or other equivalent GHG emissions.
Companies can produce these offsets by cutting emissions in a number of ways, including by putting in place low-carbon manufacturing techniques, upgrading their factories, encouraging reforestation, avoiding deforestation, moving to renewable energy sources, and more.
Market Competitive Landscape:
- WGL Holdings, Inc.
- Enking International
- Green Mountain Energy
- Native Energy
- Cool Effect, Inc.
- Clear Sky Climate Solutions
- Sustainable Travel International
- 3 Degrees
- Terrapass
- Sterling Planet Inc.
Market Drivers:
As early as 2037, the total value of carbon credits generated and sold to assist organizations and individuals in reaching their de-carbonization objectives may be close to $1 trillion. But as it stands now, the so-called voluntary carbon market, which permits the trading of verified emission reduction credits worth one ton of carbon each, is not designed for long-term viability. Stricter standards for quality and a stronger focus on carbon removal could boost demand, increase prices, and bolster market confidence.
In the first voluntary market scenario, businesses would require 5.4 billion annual offsets in 2050 to reach their net-zero targets and could buy any kind of carbon offset. In 2050, the market would continue to be oversupplied and 8 billion offsets—mostly from prevented deforestation—would be produced annually.
Since only offsets from projects that truly removed carbon from the atmosphere would be allowed to count, the supply-demand balance would be much tighter under the removal scenario. There would be no more credits from clean energy projects or from prevented deforestation. According to this scenario, the market would experience a brief shortage beginning in 2037 because it is still expensive to build direct air capture (DAC), a method of removing carbon from the atmosphere, on a large scale. The annual market for carbon offsets would reach almost $1 trillion, with prices rising to over $250 per ton.
Under international agreements like the Paris Agreement, numerous nations and regions have committed to reducing their greenhouse gas emissions. These pledges frequently contain audacious goals to slow the rise in global temperatures. Governments and organizations need to take proactive steps to cut emissions if they want to meet these targets. Although energy efficiency, the use of renewable energy sources, and sustainable practices are used to reduce emissions, it is frequently difficult to totally eliminate emissions. Certain industries, such as aviation, may produce emissions that are challenging to remove using current technologies.
Market Restraints:
Lack of understanding of how carbon offsetting operates can lead many to believe that they are lowering their own carbon emissions when they are not. This may therefore lessen their motivation to cut personal carbon emissions. In order to offset the carbon emissions, other people must also reduce their carbon emissions.
Market Segmentation
The Compliance Market and the Voluntary Market are included in the type-based segmentation of the Carbon Offset/Carbon Credit Market.
In terms of project type, the Carbon Offset/Carbon Credit Market is segmented into two groups: Removal/Sequestration Projects and Avoidance/Reduction Projects.
The end-user segmentation of the carbon offset/carbon credit market comprises Power, Energy, Aviation, Transportation, Industrial, Buildings, and Others.
Regional Insights
North America is the market leader, in light of the surging environmental consciousness and climate change awareness, corporate sustainability commitments, a wide range of offset project options, and advantageous regulatory frameworks. These elements have been primarily credited with the region's market dominance.
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