South Korea’s Coordinated CBAM Strategy: How a National Carbon Price Is Making Its Export Economy Climate-Ready

CBAM Update: South Korea Prepares SMEs for the European Carbon Border Adjustment Mechanism

This week, I’d like to highlight a political example that is relevant for other export-oriented countries as well. South Korea is implementing early and structured measures to prepare for the European Union’s Carbon Border Adjustment Mechanism. The focus is on small and medium-sized enterprises, which often need targeted support when building CBAM-compliant systems. On 17 October 2025, the fourth national information session on the European carbon border adjustment took place in Daejeon. It was organized by the Ministry of SMEs and Startups, together with the Ministry of Trade, Industry and Energy, the Ministry of Environment, and the Korea Customs Service. Over 150 participants attended the event to learn about the latest CBAM regulations and receive practical implementation guidance.

Technical support for emission-intensive exporters

At the core of the event were the updated EU requirements, particularly the new simplifications for micro-importers and the streamlined reporting obligations. Nevertheless, CBAM remains a complex instrument. Smaller companies, especially in sectors such as steel, aluminum, cement, or chemicals, must completely redesign their reporting processes. Representatives from specialized institutions such as the Korea Institute of Industrial Technology and the Korea Foundation for Quality provided practical explanations on how emissions are calculated and reported in accordance with CBAM rules. Case studies from exporting SMEs demonstrated how digital processes have already been successfully implemented.

The national carbon price ensures regulatory compatibility

A key advantage for South Korea lies in its existing national carbon pricing system. Since 2015, the country has operated its own emissions trading system, which covers around 70 percent of total greenhouse gas emissions and applies to all major industrial sectors. The system obliges companies to collect and verify their emissions data, enabling technically compatible preparation for CBAM. Many South Korean exporters already have standardized monitoring systems, verified datasets, and digital reporting processes in place. As a result, the gap between national and European regulatory frameworks is relatively small. Companies can leverage their experience from the domestic emissions trading system directly for international reporting.

CBAM as a driver of strategic innovation

The South Korean government does not view CBAM as a trade barrier. Rather, it sees the regulation as an opportunity to further develop the country’s export competitiveness in a sustainable way. Official communications from the ministries emphasize that building emissions-based reporting systems will strengthen long-term competitiveness. Park Yong-soon, Director General for Technology Policy at the Ministry of SMEs and Startups, stated that companies are not only being supported in implementation. The regulation should also be understood as an opportunity to introduce new technologies and make sustainability visible along the supply chain. Kang Suk-jin, President of the state SME promotion agency, also stressed the importance of early and structured preparation. The goal is to enable companies to maintain their export competitiveness under changing regulatory conditions.

What this means for your company

South Korea’s example shows what a state-coordinated approach to CBAM preparation can look like. Building national support structures, combined with technical expertise and digital tools, greatly facilitates compliance with international climate regulations. If your company sources from a country without its own carbon pricing system, preparing for CBAM will generally require more resources. This primarily involves obtaining verified emissions data from the supply chain, selecting qualified verifiers, and integrating digital reporting systems. A structured approach is essential to avoid costly delays or penalties. The transition phase offers a final opportunity to build these structures. Use this time to define processes, involve partners, and professionalize data collection.

Support

If you would like to assess how you or your supply chain can strategically prepare for CBAM, I’d be happy to assist you. Feel free to contact me anytime at helge@kolum.earth. Together, we’ll make your company CBAM-ready.