“Recipe for Greenwashing:” New report calls for a ban on international credits in South Korea’s Emissions Trading System
The report, published by Korean NGO Plan 1.5, finds that cookstove projects overestimate emissions reductions by a factor of more than 18.
The Korean Emissions Trading Scheme was introduced in 2015 and by 2022 covered 73% of South Korea’s greenhouse gas emissions. The country has a nationally determined contribution (NDC) target to reduce emissions by 40% by 2030, compared to 2018. But a recent report finds that “the effectiveness of the K-ETS is dogged with concerns about lax emission ceilings, low allowance prices, and reliance on international carbon credits”.
The report, titled, “Recipe for Greenwashing: How international credits dilute the effectiveness of the Korean Emissions Trading Scheme,” was published by Korean NGO Plan 1.5.
Carbon Market Watch and the Carbon Trading Project at the University of California Berkeley also worked on parts of the report.
The EU Emissions Trading System
The report includes an analysis of international credits in the EU Emissions Trading System. The ETS launched in 2005 and initially international credits, particularly from the Clean Development Mechanism, played a significant role.
The international credits used in the ETS were cheap and low-quality.
The report notes that,
The use of international offset credits hampered the functioning of the EU ETS by inflating the oversupply of emission allowances, thereby lowering the incentive for European industry to decarbonise. In addition, confidence in the climate benefits of these often cheap credits plummeted due to their lack of environmental integrity and the harm some of these projects caused to local and indigenous communities.
The combination of international credits, a cap on emissions that was way too high, and the financial crisis (which resulted in lower emissions while the supply of allowances remained the same) resulted in a massive oversupply. In 2018, the Market Stability Reserve was launched to address the oversupply of allowances and carbon credits under the scheme.
By 2021, international credits were excluded from the ETS. The report concludes that,
International offsetting has no place in emissions trading systems like the EU ETS because they weaken the market, undermine climate targets, and distract from necessary investments.
Quality of international credits in the K-ETS
The report finds that international carbon credits in the K-ETS, particularly from cookstove, hydropower, and gas leak reduction projects, have been associated with “significant over-crediting”. Many of the credits originate from CDM projects.
The credibility of hydropower and gas leakage reduction projects are undermined by additionality issues and problems with accurately measuring emissions. The report argues that these projects “reveal a fundamental systemic failure within the CDM” and “these types of projects should be avoided”.
A paper published in Nature Sustainability in January 2025 looked at the methodologies used for cookstove projects. The paper is titled, “Perverse over-crediting from cookstove methodologies,” and the lead author was Annelise Gill-Wiehl of the Energy and Resources Group at the University of California Berkeley.
Cookstove projects are the largest source of credits in the K-ETS. Plan 1.5’s report uses the methodology from Gill-Whiehl’s paper to analyse cookstove projects that have supplied credits to Korean companies, including Samsung Electronics, SK Group, and Korea East-West Power, under the K-ETS.
The report finds that these projects overestimate emissions reductions by a factor of 18.3, due to faulty assumptions including the following:
Baselines are calculated based on assumptions about how much firewood is used per person per year. These assumptions are often based on surveys rather than kitchen performance tests. Surveys are vulnerable to biases as people cannot accurately estimate how much biomass they use per year.
Under the CDM, stove efficiencies are allowed to be based on laboratory tests. But in the real world efficiencies are rarely as high as these laboratory tests suggest. The result is over-crediting.
Fewer households than anticipated may adopt the cookstoves and some of those that do may not actually use the cookstoves. Then there’s the “stacking effect” where households use the project cookstoves as well as their old stoves, in order to cook food using more than one pot, for example.
The “rebound effect” plays a role, in which costs savings, time savings, or convenience from more efficient cookstoves result in households using their stoves more frequently or less carefully.
The fraction of non-renewable biomass is another problem with cookstove projects. Non-renewable biomass refers to biomass that does not grow back at the current rate of collection. Under the CDM, credits can only be generated from the portion of biomass used that would not grow back.
Credits should only be generated from cook stove projects if the biomass they save would not have decayed and released carbon into the atmosphere in the absence of the project. So any fallen branches, dead wood, agricultural waste used by households should be excluded from the calculations.
But the CDM tool for calculating the fraction of non-renewable biomass is likely to overestimate the value compared to the scientific literature, resulting in more overcrediting.
Cookstove projects can result in less biomass being collected from forests and wooded areas. Leakage occurs in cookstove projects when households not involved in the project increase their biomass collection as more is available.
In CDM projects, leakage is estimated at 5%. Gill-Wiehl’s paper notes that this assumption requires further research and could result in over- or under-crediting.
Despite these problems, the Korean government plans to use 37.5 million carbon credits by 2030 under the Article 6 mechanism of the Paris Agreement to meet its NDC target. That’s about 13% of the total reduction target.
South Korea has signed agreements under Article 6.2 with more than 10 countries, including Vietnam, Cambodia, and Mongolia.
The report recommends a ban on international credits from the K-ETS, particularly on cookstoves and REDD projects, “which are known to exaggerate their climate impact”.
Great report, thank you! These actions look like a desperate and futile attempt by a highly-industrialized country to disappear its emissions to keep their economy running. On top of that, there is the issue of their wood-pellet imports, another greenwashing scheme. Mokpo City Gas Co. Ltd. is the largest importer and there are many more. At this point it doesn’t matter the source of the fuel, there is too much burning!