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Companies to File Lawsuits Disputing Meager Greenhouse Gas Emission Allowances
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Companies to File Lawsuits Disputing Meager Greenhouse Gas Emission Allowances
  • By Cho Jin-young
  • December 11, 2014, 03:06
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With the implementation of the greenhouse gas emission trading system coming January of next year, opposition by companies is getting stronger.

Industries argue that the emission allowances allotted to 525 companies by the Ministry of Environment (MOE) early this month are too low. These companies are willing to legally dispute the emission allowances set by the MOE. The companies that are determined to raise an objection to the decision of the Korean government include reportedly not only power generation companies and steel manufacturers but public enterprises.

The emission trading system, which was established by the Korean government to reduce greenhouse gas emissions, allocates emission allowances to companies and lets them trade surpluses or shortages with each other.

The reason why companies claim that the emission allowances are much lower than actual emissions is the unreasonable aspects of the guidelines of the MOE on calculating the emission allowances regarding the establishment and expansion of facilities. According to the guidelines, companies who completed new facilities by September of last year cannot help but receive lower emission allowances than their actual emissions, based on the average emissions in between October and December 2013, which was the trial period. Also, though small-emission facilities are required to install a gauge and report their emissions, only a few companies did so because of the complicated, unclear procedure. As a result, many companies have been assigned lower emission allowances than they actually deserve.

“According to the current guidelines of the MOE, it is inevitable that those companies who began to run new facilities in the middle of last year receive too low emission allowances,” said a lawyer at a law firm. “The guidelines are irrational in some respects, leading to frequent inquiries of companies about administrative litigation.”