🚨 Carbon Credit External Projects

Today Korean Social News for Beginners | 2025.08.08

0️⃣ Forest Carbon Absorption Trading and Private Participation Expansion

📌 Reduce Carbon with Forests and Earn Credits Too... 'External Projects' Participation Expanding

💬 Korea Forest Service announced it will recruit additional participants for 'carbon credit external projects' using forests to expand greenhouse gas reduction activities until September 15th. This system allows companies and individual forest owners to trade the amount of carbon absorbed through tree planting and wood utilization in the carbon credit market after government certification. Participation is increasing in various areas including urban forest creation, highway greening, and rural forest restoration, with voluntary private sector participation playing an important role in achieving carbon neutrality goals. Forest-based carbon absorption is particularly attracting attention for its high cost efficiency and ecosystem conservation effects.

💡 Summary

• Carbon credit external projects are a system where private parties trade carbon absorbed through forest creation as carbon credits.
• Not only companies but also individual forest owners can participate, expanding participation.
• Private participation is spreading as they can gain economic benefits while absorbing carbon.

1️⃣ Definition

Carbon Credit External Projects refer to a system where private individuals or organizations that are not carbon credit allocation target companies can trade their greenhouse gas reduction or absorption results as carbon credits after government certification. In the forest sector specifically, this involves measuring the amount of carbon dioxide absorbed through tree planting, wood utilization, and forest management, then converting it into carbon credits.

This system is an important policy tool that increases the flexibility of the carbon credit trading system and encourages voluntary private participation in greenhouse gas reduction to support the nation's overall carbon neutrality achievement.

💡 Why is this important?

• It encourages voluntary private participation in greenhouse gas reduction.
• Carbon absorption through forests is a cost-effective and sustainable reduction method.
• It increases the flexibility of carbon credit trading systems and reduces overall reduction costs.
• It creates a win-win structure that can pursue environmental conservation and economic benefits simultaneously.

2️⃣ Types and Participation Methods for External Projects

📕 Main Types of Forest Sector External Projects

• Various forest activities are recognized as external projects. Main types include:

  • New afforestation projects that plant new trees in wasteland or non-forest areas.
  • Reforestation projects that replant trees after cutting existing forests.
  • Forest management projects that increase forests' carbon absorption capacity through thinning and pruning.
  • Urban forest creation projects that expand green spaces in city centers.
  • Wood product utilization projects that use wood as construction materials or furniture for long-term carbon storage.

• Participation subjects are expanding diversely. Main participants include:

  • Individual forest owners can participate using their own forests.
  • Forestry-related companies participate with professional forest management activities.
  • Local governments can pursue projects using public forests.
  • Civic groups and environmental organizations participate through forest restoration activities.
  • General companies are also participating as part of voluntary carbon offset activities.

📕 Certification Process and Trading Process

• A systematic certification process must be followed. Main steps include:

  • Writing a business plan to estimate greenhouse gas reduction amounts and establish monitoring plans.
  • Getting business plan appropriateness verified by government-designated verification agencies.
  • Registering the project with the Ministry of Environment and receiving official certification.
  • Periodically measuring carbon absorption amounts while executing the actual project.
  • Getting actual reduction results verified through verification agencies and finally recognized as carbon credits.

• Certified carbon credits are freely traded in the market. Main features include:

  • Official trading occurs through the Korea Exchange.
  • Economic benefits can be gained by selling carbon credits according to market prices.
  • Companies needing carbon credits become buyers, creating active trading.
  • Traded carbon credits are recognized as greenhouse gas reduction results for purchasing companies.
  • Market reliability is secured through transparent trading systems.

💡 Precautions When Participating in External Projects

1. Long-term Management Duty: Planted trees must be managed for at least 30 years
2. Measurement Accuracy: Carbon absorption amounts must be accurately measured using scientific methods
3. Proving Additionality: Must prove activities that wouldn't have occurred without external projects
4. Ensuring Permanence: Must continuously manage to prevent absorbed carbon from being released again
5. Monitoring Duty: Must faithfully fulfill regular monitoring and reporting obligations

3️⃣ Current Expansion Status and Future Outlook

✅ Background of Private Participation Expansion

• Economic incentives are increasing participation motivation. Main factors include:

  • The economic viability of forest carbon absorption projects is improving as carbon credit prices rise.
  • Demand for carbon credits is steadily increasing due to government strengthening of carbon neutrality policies.
  • Government support projects for forest creation and management have expanded, reducing initial cost burdens.
  • Voluntary corporate participation is increasing due to growing social interest in the environment.

• System improvements have increased participation convenience. Main changes include:

  • Certification procedures have been simplified so small and medium-scale operators can easily participate.
  • Administrative convenience has greatly improved with the introduction of online application systems.
  • One-stop support from project planning to certification is available through professional consulting support services.
  • Participation barriers have been lowered with the development of collective project models for small-scale operators.

✅ Policy Direction and Expected Effects

• The government is actively supporting external project expansion. Main policies include:

  • Plans to greatly expand forest sector external projects by 2030.
  • Increasing accuracy and efficiency of carbon absorption measurement through new technology introduction.
  • Improving management convenience with monitoring systems using digital technology.
  • Building certification systems meeting international standards to prepare foundations for overseas expansion.

• Various ripple effects are expected. Main effects include:

  • Expected to make important contributions to achieving national greenhouse gas reduction targets.
  • Expected to revitalize regional economies by creating new income sources for mountain village areas.
  • Will have effects of promoting biodiversity and expanding ecosystem services.
  • Expected to contribute to green job creation and related industry development.
  • Also expected to improve citizens' environmental awareness and expand voluntary participation culture.

4️⃣ Related Term Explanations

🔎 Carbon Sink

• Carbon sinks are natural or artificial facilities that absorb and store carbon dioxide from the atmosphere.
  • A carbon sink refers to ecosystems or facilities that absorb carbon dioxide from the atmosphere and store it as carbon in biomass, soil, etc. Natural sinks include forests, grasslands, wetlands, and oceans, while artificial sinks include planted forests, urban forests, and wood products.
  • Forests are the most representative carbon sinks, where trees absorb carbon dioxide through photosynthesis and store carbon in wood, roots, and soil. Younger trees have greater carbon absorption capacity due to active growth, and absorption amounts can be increased through proper management.
  • In external projects, the amount by which atmospheric carbon dioxide actually decreases through activities that create or manage such carbon sinks is measured and recognized as carbon credits. At this time, continuous management is important to prevent absorbed carbon from being released again.

🔎 Offset

• Offset is the concept of offsetting greenhouse gas emissions with reduction amounts from other places.
  • Carbon Offset refers to offsetting greenhouse gas emissions from specific activities or products with reduction or absorption activities from other places to reduce or make net emissions zero. It's a widely used international means of achieving carbon neutrality.
  • The principles of offset include: First, emission calculation - accurately calculating greenhouse gas emissions from specific activities. Second, implementing reduction activities - reducing or absorbing greenhouse gases through forest creation, renewable energy installation, etc. Third, verification and certification - officially confirming actual reduction amounts.
  • Carbon credit external projects are a system that allows such offset activities to be systematically certified and traded. Companies can achieve overall reduction targets by purchasing carbon credits produced through external projects to offset parts that are difficult to reduce internally.

🔎 Additionality

• Additionality is the principle of proving that reduction activities wouldn't have occurred without external projects.
  • Additionality means that to be recognized as an external project, it must be greenhouse gas reduction or absorption that wouldn't have occurred without that project. This is a core requirement for ensuring the environmental soundness of carbon credits.
  • Methods of proving additionality include: First, financial additionality - proving it's a project difficult to implement with ordinary profitability. Second, technical additionality - showing use of new technologies or methods different from existing practices. Third, institutional additionality - proving it's voluntary activity, not legal obligation.
  • In forest external projects, additionality can be recognized by newly afforesting places that previously had no forests or conducting additional forest management activities beyond legal obligations. This ensures substantial greenhouse gas reduction effects and maintains the reliability of carbon credit markets.

5️⃣ Frequently Asked Questions (FAQ)

Q: Can individuals also participate in forest external projects?

A: Yes, individual forest owners can fully participate, and participation is actually increasing.

• Carbon credit external projects are designed so individuals as well as companies can participate. Especially if you're a forest owner, you can participate in external projects just by planting trees on your land or properly managing existing forests. However, several conditions must be met. First, minimum area requirements must be satisfied - usually 0.5ha (about 1,500 pyeong) or more is needed for new afforestation. Second, you must have the will and ability to manage for 30+ years long-term. Third, you must be able to fulfill regular monitoring and reporting obligations.
• For small-scale forest owners, if it's difficult to participate alone, there's also a method of several forest owners joining together to participate collectively. Korea Forest Service actively supports such collective projects and also provides professional consulting. Additionally, government support programs to reduce initial cost burdens can be utilized, so individual participation is gradually increasing.

Q: How much profit can be gained from forest external projects?

A: Profits vary depending on forest area, tree species, management methods, etc., but meaningful profits can be expected long-term.

• Profits from forest external projects vary depending on several factors. First, carbon absorption amounts differ by tree type - faster-growing species yield higher initial profits. Second, larger forest areas mean greater total profits, but management costs per unit area must also be considered. Third, profits fluctuate according to carbon credit market prices - current carbon credit prices are around 8,000-12,000 won per ton. Fourth, by project type, new afforestation can yield higher profits than existing forest management.
• For a specific example, a 1ha new afforestation project can absorb a total of 300-500tCO2 of carbon over 30 years, expecting carbon credit profits of about 2.4-5 million won based on current prices. However, actual net profits are lower after deducting afforestation costs, management costs, certification costs, etc. What's important is that this is additional income separate from other revenues like timber sales and forest product production. Long-term carbon credit price increases are also expected, so profitability may improve further.

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