The policy covers around 89% of the Republic of Koreaʼs national GHG emissions to help the country become carbon neutral by 2050. The K-ETS covers 804 of the largest emitters in the power, industrial, buildings, waste, transport, domestic aviation, and domestic maritime transportation sectors. Covered entities must surrender allowances for all their covered emissions, and allocation is done via auctions or free distribution. At least 10% of allowances must be auctioned. Free allocation is provided for EITE sectors based on production cost and trade intensity benchmarks. In September 2023, the government released new rules to increase liquidity in the K-ETS, focusing on facilitating market participation and banking. The plan also follows specific GHG reduction targets: by 2030, at least a 35% reduction below 2018 emissions and a 40% reduction below 2018 levels; by 2050, carbon neutrality.