[Exclusive] 'Insufficient Follow-up Steps'... Challenges Faced by International Greenhouse Gas Reduction Projects

Started in 2021 but only 4 countries signed the agreement
Internal report also states 'Insufficient follow-up steps in project implementation'
Corporation: "Impact of unresolved details in Paris Agreement"

The Ministry of Environment's international greenhouse gas reduction project is facing difficulties. Although it is one of the '2050 Carbon Neutrality Core Projects,' the Korea Environment Corporation, which leads the practical work, has not achieved any results overseas. As internal reports pointed out the lack of commercialization, the Environment Corporation requested a budget increase from the Ministry of Economy and Finance and began to participate directly in business expansion.

According to a comprehensive report by Asia Economy on the 18th, the Environment Corporation has not yet entered the commercialization stage of the international greenhouse gas reduction project. Since 2021, it has promoted international reduction projects in more than 10 countries starting with Vietnam, but only basic agreements under the Ministry of Foreign Affairs have been signed in four countries. A recent internal report from the Environment Corporation also pointed out that "although the international greenhouse gas reduction project is underway, the follow-up steps related to project promotion are insufficient."

The international greenhouse gas reduction project is a project that supports Korean companies to reduce greenhouse gases overseas. According to the Paris Agreement, if greenhouse gases are successfully reduced abroad, the reduction is recognized as the achievement of the respective country. The government has also set the '2030 Greenhouse Gas Reduction Target (NDC)' and is promoting international reduction projects. Out of the total greenhouse gas reduction volume of 291 million tCO2eq (tons of carbon dioxide equivalent), about 13%, or 37.5 million tCO2eq, is planned to be reduced through international reduction.

The Environment Corporation explained that conditions for commercialization have not been established. A corporation official said, "Even if the Ministry of Foreign Affairs signs bilateral agreements, many detailed matters need to be agreed upon, and we cannot arbitrarily control local circumstances," adding, "Especially since the international reduction project started under the Paris Agreement, coordination on how to recognize the reduction volume and how to contract has not been made, making it difficult to start commercialization."

Some point out that the difficulties in the international reduction project stem from Korea's insufficient environmental aid competitiveness. Typically, developing countries implement environmental policies with official development assistance (ODA) from advanced countries. Therefore, international reduction projects or new environmental businesses are often conducted with countries that have received ODA. Korea is increasing environmental ODA but is still at an early stage. Even so, most of it is focused on water resource policies, and it is criticized for being at a lower level than advanced countries that promote various climate and environmental ODA projects.

The Environment Corporation insists that budget expansion is necessary to accelerate the international reduction project. Earlier this year, the corporation directly expressed difficulties to the Ministry of Economy and Finance's Budget Office and requested increased financial support. At this meeting, Environment Corporation officials appealed for active support from the Ministry of Economy and Finance for the corporation's overseas expansion, emphasizing Korea's globally excellent environmental policies. They also expressed dissatisfaction that although the Green ODA budget has rapidly increased, similar environmental projects by other ministries have also increased, so the corporation's perceived effect is not significant.

The Ministry of Economy and Finance reportedly avoided giving an immediate answer regarding budget support. However, the ministry conveyed to the corporation that "since ODA budgets are allocated with limited resources, if there are projects with high feasibility, please share information directly with the Ministry of Economy and Finance."

Since the Environment Corporation cannot speed up commercialization immediately, it plans to increase the number of countries with which agreements are signed. Earlier this year, the corporation sent employees to Malaysia to discuss expanding international reduction projects locally. This was based on the judgment that Malaysia has a particularly strong interest in carbon and climate issues among Southeast Asian countries. It is reported that they also met with the Embassy of the Republic of Korea in Malaysia to review the 'Korea-Malaysia Bilateral Agreement on International Greenhouse Gas Reduction.' An embassy official mentioned at this meeting, "Since a high-level exchange such as the Malaysian Prime Minister's visit to Korea is scheduled this year, it is necessary to promote environmental cooperation projects between the two countries."