Italy, South Korea to enable mutual recognition of carbon footprint systems

Italy and South Korea were set to allow mutual recognition of their carbon footprint reporting and verification systems, South Korea's Ministry of Trade, Industry and Energy (MOTIE) said July 18.

South Korean government-backed research institute Korea Institute of Industrial Technology (KITECH) and Italian government-backed program called Carbon Footprint Italy (CFI) signed a Memorandum of Understanding. CFI sets standards and provides certifications for carbon footprints of both products and organizations.

"The MOU is considered a significant step towards expanding the global scope of the carbon footprint verification system run by MOTIE and KITECH in terms of international acceptance," MOTIE said in its statement.

accounting, reporting and verifying carbon footprints has become a common requirement in global trades. Many companies require suppliers and logistic service providers to report carbon footprints embedded in goods and services.

Meanwhile, increasing carbon-related trade policies have been implemented, such as the EU's Carbon Border Adjustment Mechanism that imposed a carbon tariff on emission-intensive commodities exported to the region.

Consequently, carbon footprint has become an essential factor determining a country's export costs.

"Despite the demands for carbon footprint verification recently rising out of the EU over the import and export of goods, Korean firms are experiencing time and cost issues in the local carbon footprint verification process," MOTIE said.

To resolve the issue, MOTIE and KITECH have been working towards establishing a carbon footprint verification system that is compatible with Italy as well as other countries in the EU and beyond. Thus, the verification outcomes through the South Korean system were expected to be recognized globally, MOTIE said.

Through the signing of the MOU, KITECH and CFI have agreed to cooperate to enable a mutual recognition agreement (MRA) between the two countries' verification systems. They plan to sign the MRA on the sidelines of the UN Climate Change Conference (COP 29) to be held in Baku, Azerbaijan, in November.

Once the MRA is sealed, it is anticipated that South Korea's domestic carbon footprint verification results will be more easily accepted not only by Italy but also throughout Europe, MOTIE said.

Governments like China and India, who exported large volume of CBAM-liable commodities to the EU, have expressed strong concerns against the CBAM due to its impacts on their economies. They are expected to continue voicing out concerns at COP29 over CBAM and similar trade policies.

South Korea's move, however, showed a different stance towards such carbon-related trade policies. By enabling mutual recognition, these carbon-related trade policies will be implemented more smoothly.