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Newsletter | December 2014, Issue 4
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ENVIRONMENT
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MOE Notification of Korean Allowance Unit
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On November 28, 2014, the Allocation Determination Evaluation Committee under the Ministry of Environment (the “MOE”) held a meeting to determine the number of Korean Allowance Units (“KAU”) to be assigned to the companies (the “Participant Companies”) subject to the Act on Allocation and Trading of Emissions Permits (the “Emissions Trading Act”) for the first three year period from January 1, 2015 to December 31, 2017 (the “First Planning Period”). After the meeting, the MOE notified each of 525 Participant Companies of the KAU allocated to them.
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Under Article 13 of the Enforcement Decree of the Emissions Trading Act, during the First Planning Period, all KAUs will be allocated without cost. In addition, if a Participant Company previously voluntarily reduced emissions under the greenhouse gas (“GHG”) Target Management System, such reductions may be taken into account and counted towards additional permits to be granted for Year 3 of the First Planning Period (“Korean Credit Units”).
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The MOE received applications for allocation of KAUs from Participant Companies until October this year. Also within that month, the MOE established a Joint Working Group composed of members from relevant industries, the academia and other experts, and a number of Sector-Specific Working Groups, to review the permit applications. After the MOE consulted with other relevant authorities, the allocation decisions on each Participant Company were passed by the Allocation Determination Evaluation Committee.
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The Emissions Trading Act provides that Participant Companies may file objections to an allocation decision within 30 days of the relevant administrative notification or decision, along with supporting materials. Decisions regarding objection reports must be made and notice must be given thereof within 30 days of filing, except in certain special circumstances, in which case the decision-making period may be extended for not more than 30 days.
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To protect confidential business information, the MOE's Guidelines on the Emissions Trading Act provides that information received by the MOE in connection with KAU allocation must not be used for any other purposes or disclosed to third parties.
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