SK, Asia's First to Promote 'Voluntary Carbon Credit Alliance'

SK Group is taking the lead in establishing Asia's first coalition to expand the 'Voluntary Carbon Market (VCM)'.

On the 10th, SK Group announced that on the 8th, at the 28th United Nations Climate Change Conference of the Parties (COP28) held in Dubai, United Arab Emirates (UAE), it held a multilateral memorandum of understanding (MOU) signing ceremony to establish the 'Technology-based Pre-trade Carbon Credit Market (EPCM) Coalition'.

The multilateral MOU signing ceremony was attended by a total of 11 organizations, including SK Inc., SK E&S, Eco Security, Shinhan Investment Corp., PwC Consulting, Korea Chamber of Commerce and Industry Carbon Reduction Certification Center, Korea Hydro & Nuclear Power, Korea South-East Power, Hartree Partners, Vibrio, and Seoul National University Climate Tech Center.

The EPCM discussed at this MOU introduces a method of pre-trading (credit) carbon credits issued using carbon reduction technologies. In the existing voluntary carbon market, carbon offset credits have been issued after conducting carbon reduction activities mainly based on nature, such as afforestation and forest conservation projects, and then certifying the reduction performance.

On the other hand, EPCM is a pre-trade system where the certification center issues EPCs based on the technologies of carbon reduction technology companies, and demanders (carbon-emitting companies) purchase the EPCs. When the carbon reduction technology company, having secured funds through EPCs, completes the carbon reduction project, the certification center converts the EPCs purchased by the demanders into carbon credits. Carbon reduction technology companies can secure funds in advance to commercialize their carbon reduction technologies, and demanders can offset with the carbon credits through the EPCs purchased in advance or earn trading profits.

On the 8th (local time) at COP28 held at Expo City Dubai, UAE, 11 organizations including SK Inc. and SK E&S signed a multilateral memorandum of understanding to establish an EPCM alliance and took a commemorative photo. (From the far left in the back row) Cho Young-jun, Director of the Sustainable Management Institute at the Korea Chamber of Commerce and Industry; Jung Soo-jong, Director of the Climate Tech Center at Seoul National University; Kang Ryun-kwon, Head of LNG Planning Division at SK E&S; Yoo Won-seok, Partner at PwC; David Costa, Global Head at Hatree Partners; Pablo Fernandez, CEO of EcoSecurity; (From the far left in the front row) Park Sung-je, Head of Green Growth Division at Korea South-East Power; Gong Young-gon, Head of Hydrogen Convergence Complex Division at Korea Hydro & Nuclear Power; Pedro Mura Costa, CEO of Vibrio; Kim Moo-hwan, Head of Green Investment Center at SK Inc.; Kim Jun-tae, Head of GIB2 Group at Shinhan Investment Corp. Photo by SK

Participants in the EPCM MOU agreed to jointly promote the first issuance of EPCs in 2024 through COP28 and plan to officially launch the coalition at next year’s COP29 by recruiting additional participating companies.

Additionally, they plan to continuously develop carbon reduction certification methodologies targeting 12 promising carbon reduction technologies, including ▲hydrogen production ▲plastic recycling ▲carbon capture and storage, while expanding the issuance and trading of EPCs.

Kim Muhwan, Head of SK Inc.’s Green Investment Center, said, "EPCM will contribute to advancing the arrival of technology-based carbon reduction technologies by providing incentives to companies with innovative carbon reduction technologies," adding, "The 'EPCM Coalition' will actively promote carbon reduction activities and strive to solve the climate change issues facing the world."