KCGS 한국ESG기준원

- Companies will face an increased risk associated with greenhouse gas emission allowances with strengthening reduction requirements applicable in Phase 3 of the Korea Emissions Trading System starting in 2021.



- This paper reviews the status of emission liabilities during the Phase 2 Allocation Plan period (2018~2020) and the likelihood of emission liability expansion to identify the financial burden imposed on the companies.



- According to a review of the emission liability details over the last three years, the number of firms with relatively large emission liabilities diminished. Moreover, the companies having fewer emission liabilities outnumbered those having increased emission liabilities. The data suggest that companies are working to reduce their emission liabilities, and the trading system serves as an incentive to drive down carbon emissions. 



- Companies not subject to 100% free allocation in both Phase 2 and 3 had their emission liabilities almost double year-over-year on average, with a max increase by 9 times. Companies should prepare an action plan, and investors need to monitor the portfolio companies closely.



For the details, please check the attached file.