Tesla has reportedly received authorization from the Ministry of Environment in South Korea to trade automotive emission credits within the country. The company is estimated to hold around 4 million grams/km of tradable emission credits in South Korea, with a potential value of up to 200 billion won based on current penalty rates. In Korea, automakers are required to ensure that their vehicles’ average greenhouse gas emissions are below the country’s standard.
Those exceeding the prescribed amount are subject to a fine of 50,000 won per gram/km or can purchase emission credits from other companies. Initially, Tesla was unable to participate in South Korea’s emission credit market due to regulatory restrictions. However, after lobbying and regulatory amendments, Tesla finally obtained permission to legally participate in the emission credit market in 2021.
The final approval from the Ministry of Environment was granted earlier this year, allowing Tesla to initiate actual trading of emission permits. This development follows a period of growing traction for Tesla in South Korea, with the company experiencing a surge in vehicle registrations compared to other automotive brands in the region. Overall, Tesla’s approval to trade emission credits in South Korea marks an important milestone for the company’s operations in the country.