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Opportunities in Kr ETS for Private sector

Learn about private sector trading opportunities in the Korean Emissions Trading Scheme (ETS) market, including market information, long-term price expectations, international offset credit usage, and emission reduction goals. Gain insights into trading products and strategies. Contact Sang Sun Ha, Head of Carbon Desk at ECOEYE Co., Ltd., a leading offset provider in Korea ETS.

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Opportunities in Kr ETS for Private sector

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  1. Opportunities in Kr ETS for Private sector SANG SUN, HA Head of Carbon Desk ECOEYE Co., Ltd. www.carbon-i.com sangsun.ha@gmail.com +82 2-6480-7346 +82 10-6359-6627 7, Sept. 2016

  2. ECOEYE, a leading offset provider in Kr ETS • Participated in more than 45% of Kr registered CDM project. • More the 6million KOC(Korea Offset Credit) trading and brokerage. Kr-ETS Market Information Service (www.carbon-i.com) (More than 200 compliance entities are members) KR registered CDM Projects status • UNEPCD4CDM (www.cd4cdm.org) CDM pipeline data

  3. Agenda Product for private sector trading in Kr-ETS Long-term Price Expectation for Kr-ETS Kr Demand for Int’l offset credits

  4. 1. KOC, the product for private sector trading • 14Million KOCs has been issued. All the issued KOCs came from CERs from Kr-CDM. • KOCs and converted KCUs are 86% of traded volumes for emissions of 2015. • ECOEYE has traded 1.5M KOCs and involved in more than 6M (40% of total traded volume). Offset Registry (any Kr-company having KOC) Allowance Registry (Compliance + 3 Public banks) KOC Banking unlimited KAU 15 KAU 16 Borrowing Max. 20% KAU 17 KAU Reserve CERs voluntary cancellation proof from CDM registry or National registry KCU 15 KCU 16 CDM KOP KCU 17

  5. 2. Price expectation for Kr ETS • Price would increase continuously w/o Gov. intervention. Gov. concerns increasing price. • Price would fluctuate because of Gov. intervention, but it would not go below 10k KRW. • Most compliance installations are not active in trading. Low liquidity would continue. Gov. Market Stability Reserve Auction just before KAU surrender due-date. Price is 20% less than market price Early action free allocation More than 41M KAU (JAN 2017) [tCO2] [KRW] 2016 2017 2018 2019 2020 2021

  6. 3. Int’l Offset Credits for Korea • Kr-ETS compliance company can use int’l offset for 5% of its emission from 2021. • Demand for Kr-ETS would be 10~25M/yr. Gov. demand might be around 500M upto 2030 • Only int’l offset credits eligible in Paris Agreement would be allowed in Kr market. MtCO2eq 2030 BAU Emissions National Report Emissions in 2012 INDC 37%↓ 25.7% domestic reduction 1,705MtCO2eq 2,454MtCO2eq 11.3% Int’l effort 749MtCO2eq 11.3% Reduction compared to 2030 BAU could be achieved by international emission reductions. Max. 749M int’l offset credits might be necessary to achieve Kr INDC from 2021 to 2030.

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