Climate Policy Engagement Analysis
Climate Policy Engagement Overview: The Korea International Trade Association (KITA) appeared to actively engage with climate policy in South Korea and the European Union (EU), taking a mixture of positive and negative positions. It has engaged negatively with several specific climate-related regulations, particularly regarding the EU Carbon Border Adjustment Mechanism (CBAM) and the Korea Emissions Trading Scheme (K-ETS). However, KITA supported market-based renewable energy legislation in South Korea.
Top-line Messaging on Climate Policy: KITA appeared to support the global need for urgent climate action but did not provide a clear position on the need for climate regulation in its top-line messaging. In a February 2024 Trade Focus Report, KITA supported the decarbonization of the industrial sector in line with the IPCC’s call for drastic action.
Engagement with Climate-Related Regulations: KITA has engaged negatively with the EU Carbon Border Adjustment Mechanism (CBAM) and the K-ETS, while engaging positively with market-based renewable energy policies, such as the third-party Power Purchase Agreements (PPAs).
In a July 2023 consultation response to the EU Commission, the Executive Director of the KITA Brussels Center advocated for exceptions for South Korean corporations regarding the reporting obligations of the EU CBAM implementing regulation. In the response, the association requested that the EU Commission not impose quarterly reporting requirements on non-EU businesses during the transitional period. KITA also requested that South Korean corporations subject to the Korea Emissions Trading Scheme (K-ETS) be allowed to calculate embedded emissions based on domestic policies when reporting their emissions to the EU Commission.
In an August 2024 Trade Focus Report, KITA opposed the K-ETS and instead advocated prioritizing industrial development over regulation for carbon neutrality. Additionally, in a January 2023 Maeil Business Newspaper article, KITA Vice Chairman Jung Man-ki advocated for increased free allowances for exporting companies, which would lower the carbon price and undermine the effectiveness of the K-ETS.
In an April 2024 Trade Focus Report, KITA advocated for renewable energy policies, specifically “market-based” policy frameworks like power purchase agreements (PPAs) as these policies would make renewable energy procurement more advantageous for companies in terms of opportunity cost and profit realization.
Positioning on Energy Transition: KITA appears to take a positive position on the transition of the energy mix. In a Global Eco News article, KITA stated the need for a new energy security strategy addressing global energy transition issues but did not clarify whether the association supports the transition to a low-carbon energy mix. However, in a Trade Focus Report published in November 2024, KITA appeared to support the decarbonization of high-emission industries such as the steel industry. KITA supported the establishment of renewable energy infrastructure to make technologies like electrolytic steelmaking economically viable. Furthermore, KITA supported policies such as expanding investments and government funding in research and development to accelerate the development of breakthrough technologies for decarbonizing the steel industry.
This summary was last updated in Q1 2025.