Climate Policy Engagement Overview: The Korea International Trade Association (KITA) appears to have limited and mixed positive and negative engagement with climate policy in South Korea. It has engaged negatively with a number of specific climate-related regulations, in particular regarding the EU Carbon Border Adjustment Mechanism (CBAM), Korea Emissions Trading Scheme (K-ETS), and South Korea’s 2030 Nationally Determined Contribution (NDC). KITA has engaged positively with market-based renewable energy legislation.

Top-line Messaging on Climate Policy: KITA appears to take mixed positions on the need for urgent climate action in its top-line messaging. In August 2021, KITA signed a joint position paper on the Framework Act on Carbon Neutrality and Green Growth with four other major business federations, supporting 2050 carbon neutrality as an ‘inevitable goal’. However, as reported by Maeil Business Newspaper in September 2021, the association appeared not to support a binding carbon neutrality target, stating that ‘excessive carbon-neutral goal is highly likely to aggravate the domestic business environment’.

Engagement with Climate-Related Regulations: KITA has engaged negatively with the EU CBAM, the K-ETS, and South Korea’s 2030 NDC, and engaged positively with market-based renewable energy policy such as support for third-party Power Purchase Agreements (PPAs). In November 2021, KITA submitted a consultation response on the EU CBAM to the EU Commission, stating that a unilateral CBAM is ‘not the solution to the global problem of climate change’, and that it would raise ‘serious legal and practical concerns.’ In a joint position paper on the Framework Act on Carbon Neutrality and Green Growth in August 2021, KITA appeared not to support reforming the K-ETS, stating concerns about the ‘unpredictable’ negative effects of changing the third phase of the scheme in accordance with the upward revision of South Korea’s 2030 NDC. In the same position paper in August 2021, the association did not support the upward revision and goal of the 2030 NDC of South Korea, citing negative impacts on business competitiveness and job reduction. However, KITA supported the legislation of third-party PPAs to increase purchase of renewable energy in small and medium-sized enterprises (SMEs), in the association’s policy recommendations in July 2022.

Positioning on Energy Transition: KITA appears to take mixed positions on the transition of the energy mix. In a joint position paper on the Framework Act on Carbon Neutrality and Green Growth in August 2021, KITA did not support renewable energy-centered power generation, citing concerns about the geographical and economic feasibility of renewable energy in South Korea. Meanwhile, in the association’s press release published in October 2020, KITA stated support for government interventions on investments and infrastructure establishment to facilitate green hydrogen production and usage. In KITA’s press release published in February 2021, it appeared to support expanding regulation and investment in electric vehicles in South Korea.