South Korea

EU, CBAM 내년 본격 시행…기업별 대응 전략은 [ESG 키워드 포커스 ⑨]

Hankyung | Local Language | News | Dec. 4, 2025 | Regulation

The European Union’s Carbon Border Adjustment Mechanism (CBAM) will be fully implemented starting in 2026. CBAM imposes costs based on the carbon emissions of imported products during their production, making carbon efficiency as important as product quality for trade competitiveness. Since October 2023, importers have been required to report carbon emissions quarterly, and from 2026 they must purchase CBAM certificates priced according to the EU Emissions Trading System (ETS). Initially, the scheme covers six product categories including steel, aluminum, and cement, expanding to chemicals and automobiles by 2030.

In early 2025, the EU introduced the Omnibus package to simplify CBAM’s complexity and enhance reporting and verification procedures. Key changes include raising the exemption threshold to 50 tonnes annually, more flexible deadlines, codification of emission calculation and verification methods, and consolidation of all procedures into a single digital portal from October 2025. This portal enables real-time reporting, certificate submission, and verification uploads, increasing data transparency and administrative efficiency.

Post-2025, CBAM moves from reporting to verification phases, requiring verifiers to meet international standards such as ISO 14065. However, mutual recognition of Korean ETS verifiers remains unresolved, with agreements pending. Companies are advised to focus on developing verifiable data systems rather than immediately choosing verifiers, ensuring carbon data is managed as verifiable system data rather than mere reports.

Corporately, CBAM presents both regulatory challenges and opportunities for industrial transformation. Large companies are focusing on process innovation and data sophistication, exemplified by POSCO’s hydrogen steelmaking and Hyundai Steel’s life-cycle assessment systems. Small and medium enterprises are prioritizing transparent emissions data through standardized metering and shared industry platforms. Moreover, integrating supplier emissions data into a collaborative supply chain structure is becoming critical, as such cooperation establishes a competitive advantage.

Government and private sector support is actively assisting firms in CBAM adaptation. Korean ministries provide subsidies for emissions consulting and certification, while private firms like Deloitte offer integrated digital solutions for emissions calculation, reporting, and verifier collaboration. Together, these efforts aim to shift Korea’s response from simple reporting to data-driven competitiveness, positioning carbon transparency as a driver of industrial innovation and trade advantage under the forthcoming full CBAM implementation.

Yonhap | English | News | Dec. 4, 2025 | UndeterminedTrade Issues and Numbers

South Korea's vehicle exports are projected to decline in 2025 for the first time in five years, with estimates showing a decrease of 2.3-2.6 percent to around 2.71-2.72 million units, down from 2.78 million units in 2024. This would mark the first annual drop since 2020 when the COVID-19 pandemic disrupted global shipments. After falling to 1.88 million units in 2020, exports had steadily rebounded, reaching 2.76 million units in 2023.

The decline is primarily driven by weaker shipments to the United States, which is the largest foreign market for South Korean carmakers. From January to October 2025, about 2.25 million vehicles were exported, with roughly 460,000 units expected in the remaining months. Exports to the U.S. accounted for 49 percent of total exports but fell 7.9 percent year-on-year to 1.1 million units. This decrease followed Hyundai Motor Group's October launch of Hyundai Motor Group Metaplant America (HMGMA), a dedicated U.S. electric vehicle plant whose capacity is planned to increase from 300,000 to 500,000 units.

Despite the U.S. government’s recent reduction of tariffs on Korean vehicles from 25 percent to 15 percent, industry officials anticipate that tariff costs will continue to negatively impact exports. There is concern that Hyundai Motor Group may raise U.S. retail prices to preserve profitability, which could reduce local demand for Hyundai and Kia models and potentially lead to further shipment declines.

Joongang Ilbo | English | News | Dec. 4, 2025 | Corporate Corruption or Fraud

The Korean branches of two foreign auto parts manufacturers, Nifco Korea Inc. and ITW Automotive, have been fined a combined total of 35.4 billion won ($24.1 million) for bid-rigging. The Fair Trade Commission (FTC) imposed the fines and issued corrective orders after determining that the companies colluded in bids for automotive air vent components commissioned by Hyundai Mobis, the parts manufacturing division of Hyundai Motor Co., and CREA Co. over a period of more than seven years.

The investigation found that Nifco Korea, a local branch of Japan-based NIFCO Inc., and ITW Automotive, affiliated with U.S.-based ITW Automotive, colluded in 24 bids between October 2013 and March 2021 to rig bidding processes and allocate orders between themselves, succeeding in 20 cases. During this time, the two companies supplied at least 96.8 percent of Hyundai Mobis' automotive air vent purchases in terms of value.

The FTC has filed complaints with the Supreme Prosecutors Office against both companies, charging them with violations of Korea's Monopoly Regulation and Fair Trade Act.