South Korea is set to launch the Global Verified Carbon Market (GVCM) next year, a platform for trading greenhouse gas reduction credits generated by overseas projects, with blockchain technology deployed to record core data in an effort to bolster the credibility of carbon credits.

Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il announced the finalized "Detailed Implementation Plan for the Global Verified Carbon Market (GVCM)" after a meeting of economy-related ministers.

The GVCM will handle the issuance and trading of carbon credits derived from international greenhouse gas reduction projects. Credits will be divided into two categories: GVCM A, usable for both regulatory compliance and voluntary environmental, social, and governance (ESG) activities when host countries authorize transfers, and GVCM NA, restricted to voluntary ESG purposes.

As an initial step, the government plans to sign letters of intent with potential participating countries at COP31, the United Nations climate conference, next month. It is also in discussions with the World Bank and the Green Climate Fund on converting credits from existing projects.

Blockchain Integration for Enhanced Credibility

A key feature of the GVCM is the use of blockchain technology for data management. Core information — including project operators, reduction volumes, unique identification numbers, and methodologies — will be recorded on the blockchain, while other data will be stored in traditional databases. This selective application is designed to balance management efficiency with data integrity and stability. In practice, it means details such as project operators, reduction volumes, and methodologies can be checked against a tamper-resistant ledger rather than resting solely on conventional records — the kind of transparency intended to bolster confidence in carbon credits.

Credits will initially be issued in electronic form and traded on South Korea's voluntary carbon market exchange. The government is considering parallel issuance in digital asset form in the future, contingent on trading volumes, the evolution of digital asset legislation, and market confidence.

The market's name change from "Global Voluntary Carbon Market" to "Global Verified Carbon Market" reflects its expanded scope to include regulatory markets.

Dual-Track Credit System

The GVCM's dual-track credit system differentiates credits based on host country. GVCM A credits, carrying host country approval, can satisfy regulatory requirements such as Nationally Determined Contributions (NDCs) — the emissions pledges countries have made under the Paris Agreement — or the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), as well as voluntary ESG activities. GVCM NA credits, which lack such authorization, are limited to voluntary corporate environmental initiatives but can be upgraded to GVCM A if corresponding adjustment approval is granted later. Corresponding adjustments are the Paris Agreement Article 6 accounting mechanism that prevents a single emission reduction from being counted toward two countries' climate targets at once.

The government is also exploring links between the GVCM and South Korea's domestic emissions trading scheme, provided that credibility standards, Paris Agreement Article 6 requirements, and domestic legal conditions are met.

Governance and Project Sectors

The issuing body will comprise a board of directors, a technical oversight committee, and a secretariat. The Global Green Growth Institute (GGGI) is currently serving as the interim secretariat. Governance structures are designed to ensure direct participation from developing countries, allowing them to influence operational processes and gain experience in carbon market management.

Project sectors will be aligned with participating countries' development needs and South Korea's technological strengths, encompassing areas such as mangrove restoration, agricultural waste treatment, methane capture, and energy efficiency improvements.

Market Outlook and Timeline

MSCI projects the international carbon credit market to reach $45 billion, with projections extending to $250 billion by 2050, underscoring the significance of standardized and credible market criteria. The GVCM aims to address current controversies surrounding credit credibility and actual reduction effectiveness by establishing clear international market standards.

To secure participating countries, the government plans to leverage networks such as the Indo-Pacific Economic Framework (IPEF) and the Asia-Pacific Carbon Market Roundtable (APCMR). Full-scale operations are expected to commence after the issuing body is established next year and project structures are specified. The planned letters of intent at COP31, the talks with the World Bank and the Green Climate Fund over converting existing credits, and the establishment of the issuing body next year will be the near-term milestones to watch as the market takes shape.