Tesla can now sell greenhouse gas credits in South Korea starting this year, as per an investigation by Korea Economic TV. The Ministry of Environment has authorized the domestic trade of Tesla’s emissions credits, estimated to total approximately 4 million g/km based on the sales performance in 2021 and 2022, reports Naver (via @Tslachan).
Automotive companies operating in South Korea are required to maintain average greenhouse gas emissions below the annual threshold for their vehicles. Exceeding this limit incurs a penalty of 50,000 KRW per g/km or necessitates the purchase of emissions credits to offset the excess. This regulation could potentially enable Tesla to engage in trades worth up to 200 billion KRW in emissions credits.
Previously, Tesla was barred from trading emissions credits in South Korea due to eligibility criteria set in 2011, which limited trading capabilities to automakers that sold over 4,500 vehicles annually since 2009. Since Tesla did not sell cars in South Korea in 2009, it was excluded from participating in emissions trading.
According to government officials, Tesla Korea has consistently highlighted the unreasonableness of this legal limitation. Following years of advocacy by Tesla, the law was partially amended in 2021, allowing Tesla to meet the legal requirements for trading emissions credits. However, actual trading required a final decision from the Minister of Environment, which was granted early this year after a three-year delay since the law’s amendment.
The government has not publicly disclosed this approval. The Ministry of Environment stated that the approval for Tesla’s emissions credits required consultations with the Ministry of Industry and acknowledged some delays in processing Tesla Korea’s application.
With government approval, Tesla secures a new revenue stream in South Korea, adding to the nearly 12 trillion KRW earned globally from carbon credits since 2009.