ESG MARKET & CASES

The Illusion That "K-ETS Makes Us Fine": The Blind Spot Revealed by CBAM Article 9

In the first full-scale year of the EU Carbon Border Adjustment Mechanism (CBAM), the common belief that "having K-ETS means we are fine" is only half true. The real level of protection is determined not by possessing a system, but by the actual carbon price paid and the quality of verified data. As the EU CBAM entered its full operational phase on January 1, 2026, the long-held assumption inside Korean industry that the K-ETS would largely offset burdens at the EU border has necessitated a reassessment. According to European Commission guidance, CBAM operated as a transitional phase focused purely on reporting obligations from October 1, 2023, to December 31, 2025, but transitioned to a cost system requiring importers to purchase and surrender certificates starting in 2026. The core issue is not whether South Korea operates an emissions trading system, but what carbon costs the EU actually recognizes under CBAM.