Platts will change Korean Offset Credit specifications to align with new regulation

Platts, part of S&P Global Commodity Insights, has decided that the specifications for the Korean Offset Credit (KOC) Carbon Markets assessment, will change in line with the rules set out by the South Korean Ministry of the Environment.

KOCs are Clean Development Mechanism (CDM) or Paris Agreement-compliant and initially reflected rolling three-year vintages, with each KOC expiring on the last working day of the calendar year.

The Ministry of Environment announced new rules in September, under which KOCs would be valid for five years instead of three years, as previously.

Under the existing methodology, the daily Platts assessment reflects the KOC expiring at the end of the calendar year. For example, this meant that on March 1, 2023, Platts assessed KOC 21-23, which were set to expire at the end of 2023. On Jan. 2, 2024, the daily Platts assessment reflected KOC 22-24.

As a result of the new rules, KOC21-23 will convert to KOC21-26 and will expire at the end of 2025. Similarly, KOC22-24 will convert to KOC22-27 and KOC23-25 to KOC23-28.

The new vintages have been modified from the proposal note to align with contracts being reflected on the Korea Exchange (KRX) under directions from the Ministry of the Environment and feedback from market participants.

In view of this change, Platts will start assessing the most competitive of the most fungible KOCs trading in the market rather than current year credit that was previously being assessed.

The daily assessment for the KOCs reflects the most competitively priced bids, offers and trades for both domestic and international offset credits under rules in line with government regulations.

The unit of assessment is Won/mtCO2e, where one KOC, when retired, offsets the emission of one ton of carbon dioxide or equivalent.

This assessment is published in the Platts Carbon Markets Daily, on Platts Carbon Markets Alert and Energy Transition Alert and in the Platts Pricing Database under the market data category ACM.

The assessment is published under the following symbols:

Please send any further feedback or questions on this decision to Platts_Carbon@spglobal.com and PriceGroup@spglobal.com by Feb. 12, 2024.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available to the public upon request.