In 2024, Green Premium accounted for 98% of renewable electricity procurement by corporate companies in South Korea. Accordingly, this issue brief looks at the Green Premium system and analyzes whether it complies with Greenhouse Gas Protocol Scope 2 Guidance, the most widely utilized GHG emission accounting standards. A brief overview of South Korea’s renewable portfolio standard system and the Korean RE100 (K-RE100) program is followed by a summary of the Green Premium (hereinafter “GP”) system. Assessment of GP compliance with Scope 2 Quality Criteria is provided in the following table, and identified issues are expanded upon afterwards.

In summary, the structure of the GP system under the K-RE100 program can cause confusion on whether and how it can be applied as an instrument for emissions reduction, as it seems to resemble an energy attribute certificate, although a Renewable Energy Certificate (REC) already exists under K-RE100. Additionally, the documents issued by Korea Energy Agency (KEA) as confirmations of renewable energy use through the K-RE100 program are lacking information about the GHG emission attributes, such as the emissions rate of the generated electricity, making it difficult to verify that no double-counting has occurred. There is also currently no way to verify information about any RECs associated with the energy sold through GP, such as who owns them and whether those RECs have been retired. Despite the lack of traceability, corporations in Korea are using GP to report reduced GHG emissions. Furthermore, a residual mix emissions factor is not available in Korea, meaning corporations are using the national grid emissions factor in their emissions calculations, which can lead to double-counting.

GP is largely not in compliance with GHGP standards for Scope 2 emissions accounting. This leaves Korean companies at risk, as consumers with high sustainability standards may choose not to purchase products from companies that procure RE through GP. To avoid this, companies could procure RE through more direct channels such as PPA contracts. This would also help ensure that more RE generation is added and GHG emissions are reduced in South Korea. However, renewable energy expansion is limited by policies that hinder development. Therefore, in order for electricity consumers to purchase RE that meaningfully contributes to emission reductions and progress for climate goals, reliance on GP must be reduced, and the Korean government must actively reform renewable energy policy and promote rapid and widespread development of RE in South Korea.