South Korea today took a major step forward with plans to introduce a national emissions trading scheme from 2015, after a key committee voted in favour of the controversial plans.

The approval by the National Assembly on climate change clears the way for the legislation to go before the national Legislation and Judiciary Committee, and then a parliamentary plenary session on 16 February that could pass the proposals into law.

President Lee Myung Bak is keen to see the legislation passed ahead of a general election that could see the long-running measures stalled once again.

Under the planned legislation, a national cap-and-trade scheme similar to that deployed in Europe will be introduced in 2015, covering almost 500 carbon-intensive firms.

The scheme will be the third such carbon market in the Pacific region, following the launch of New Zealand’s emissions trading scheme and plans for Australia to introduce a similar market from 2015. It could also pave the way for the three schemes to be linked together, enabling the international trading of Korean carbon allowances.

The latest set of proposals contains a number of concessions designed to appease industrial firms opposed to the plans. Most notably, the government has said that 95 per cent of the carbon allowances distributed during the first two phases of the scheme between 2015-2017 and 2018-2020 will be provided for free.

However, the legislation continues to face fierce opposition from some leading energy firms and industrial groups, which have warned it will drive up energy prices and could undermine the competitiveness of Korea’s export-led economy.