The South Korean government is moving forward with plans to establish the Global Voluntary Carbon Market (GVCM), an international carbon market that will involve participation from developing countries. Carbon credits that receive prior approval from host countries will also be utilized for regulatory compliance, and a blockchain-based record-keeping system is being considered. The government aims to secure interested countries this year and plans to establish the issuing organization and initiate projects by 2027.
According to the detailed implementation plan for GVCM announced by the Ministry of Economy and Finance during the External Economic Ministers' Meeting on October 8, the government is working to enhance the credibility of carbon credits and create an international carbon market that can be utilized in both voluntary and regulatory markets. The GVCM will be a rebranded version of the existing Global Voluntary Carbon Market.
The carbon credit market is projected to grow to between $7 billion and $35 billion by 2030 and between $45 billion and $250 billion by 2050. However, concerns have been raised about the lack of standardized international criteria, which is necessary to ensure the credibility of the credits.
Credits issued by the GVCM will be divided into two categories based on the prior approval of the host country. 'GVCM A' credits, which receive approval, can be used for compliance with national greenhouse gas reduction targets (NDCs), the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), and environmental, social, and governance (ESG) activities. 'GVCM NA' credits, which do not receive approval, will be utilized solely for ESG activities. However, GVCM NA credits can be converted to GVCM A credits if they receive corresponding adjustment approval from the host country afterward.
The government is considering linking the GVCM with domestic regulatory markets, such as the emissions trading system, provided that additional requirements are met. Plans are also in place to explore how to utilize the credits in response to international regulations, including CORSIA, in consultation with relevant agencies.
The issuing organization will consist of a board, a technical oversight committee, and a secretariat. The board will be composed of member countries to determine policy direction, while the technical oversight committee will decide on the issuance of credits. Developing countries will participate in the board, and experts recommended by developing countries will determine the issuance in the technical oversight committee, reflecting the demands and policies of host countries. The Global Green Growth Institute (GGGI) will temporarily manage the secretariat, with plans to establish a separate secretariat upon formal launch.
Data related to credits will be recorded in a general database, while key information such as the operator, host country, unique identification numbers, methodologies, and reduction amounts will be recorded on a blockchain. Initially, issuance will be conducted through standard electronic methods. Later, the government will consider issuing credits in the form of digital assets based on the volume of credit issuance and transactions, the legislative status of digital asset laws, and market credibility.
Transactions will primarily utilize the Korea Exchange. However, due to limitations on trading hours, participant types, and foreign exchange regulations, the government plans to explore digital asset trading methods in the future.
The government aims to secure participating countries through collaboration with the GGGI and relevant ministries, while also identifying projects that can leverage the demand from developing countries and South Korea's technology. Potential project areas include nature-based initiatives such as mangrove forest restoration, agricultural waste management, methane capture, and energy efficiency improvements. However, since greenhouse gas reduction projects require approval from host countries, the government plans to finalize participating countries before detailing the projects.
The government intends to begin discussions on the composition of the issuing organization and interested countries at the 31st UN Climate Change Conference (COP31) in November 2026, with the goal of fully operationalizing the issuing organization and projects by 2027.
* This article has been translated by AI.
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