The Ministry of Strategy and Finance said regulating emissions could allow the country to deal with moves by advanced industrialized economies to use "green protectionism" to block trade, and overhaul the country`s energy-intensive structure.
Green protectionism refers to linking trade with the environment, with some countries expected to use this arrangement to block the import of products that use excessive amounts of fossil fuel and other natural resources.
By supporting measures to cut back on greenhouse gases, Seoul can develop new technologies and play a role in an international carbon exchange sector that has already grown into a US$141.9 billion market as of 2010, the ministry said.
The ministry said it will work with other government agencies to set guidelines and push forward support measures to help businesses meet reduction goals once the greenhouse trading system is in place.
The system requires companies to take action to reduce greenhouse emissions levels or to buy rights to release gases if they are unable to so. Companies can also sell emission rights and receive cash payments.
The guidelines to be announced later in the year will, in addition, highlight enforcement rules and penalties for non-compliance that can include fines.
"Seoul wants to establish rules that conform to similar arrangement in countries like the European Union, Australia and New Zealand, while at the same time reflecting conditions and need of local businesses that may be hard pressed to meet cuts," the ministry said in a press release.
The rules will affect businesses that release 125,000 tons of greenhouse gas per year. Individual plants that emit 25,000 tons of global warming gases such as carbon dioxide, will come under the new restrictions, it said.
On fines, the ministry said it is weighing the option of fining 100,000 won for every ton of greenhouse gas emissions that a company release above its limit.
Related to the plan made possible by the passage of the greenhouse gas act on Wednesday, Asia fourth-largest economy announced in late 2009 that it will voluntarily reduce the country`s greenhouse gas emission levels by 30 percent from its 2020 business-as-usual level.