Collaboration with the Ministry of Environment's GIR and Korea Exchange
Lowering Barriers to Entry in the Carbon Emissions Trading Market
Koscom has established an intermediary management system in line with the introduction of the consignment trading system in the carbon emissions trading market, thereby completing the foundation for financial institutions to participate in the emissions market.
Koscom, in cooperation with relevant organizations such as the Greenhouse Gas Inventory and Research Center of Korea (GIR) under the Ministry of Environment and the Korea Exchange (KRX), has developed an intermediary management system to support the consignment trading system for emission allowances and launched the service on November 24.
The system was built to reflect the amendments to the government’s Emissions Trading Act, which came into effect in February this year. Previously, only emission-generating companies or institutions with KRX membership could directly access the KRX system for trading, which limited the number of market participants. With the introduction of the intermediary management system, financial institutions can now trade emission allowances through consignment trading via securities firms. NH Investment & Securities became the first company to participate in the service.
Koscom has established the necessary infrastructure-including servers, networks, and dedicated lines-to support consignment trading of emission allowances and has provided these resources to the GIR. The company has also implemented intermediary functions that aggregate, verify, and process trading data, connecting with related organizations such as securities firms, the Emissions Trading Registry System (ETRS), and the Offset Registry System (ORS). In addition, from August for two months, Koscom conducted simulation tests with GIR, KRX, and NH Investment & Securities to secure technical stability for the introduction of the consignment trading system.
The number of participating securities firms is expected to increase next year. Accordingly, Koscom plans to further advance the intermediary management system in preparation for future institutional expansions, such as the introduction of derivatives (futures).
Jung Kiwoo, Head of the Financial Business Division at Koscom, stated, "We are proud that Koscom is responsible for the core infrastructure to expand the foundation for trading in the carbon emissions market. By providing a stable intermediary management system, we will enhance the convenience and reliability of trading and contribute to the vitalization of the domestic carbon finance ecosystem."
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