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Internal reduction project is the project of greenhouse gas reduction in the base year caused by the introduction of greenhouse gas reduction facilities and technologies within the organizational boundary of Business entities eligible for allocation. It is caused by the introduction of greenhouse gas reduction facilities and technologies from the year following the first designated year of the company to be allocated.

• Article 7 of the Guidelines on the Allocation and Cancellation of Greenhouse Gas Emissions Rights

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Propulsion system

Pre-allocation is to receive pre-allocation applications based on the existing workplaces of the companies subject to allocation before the start of the planning period and allocate emission allowances within the scope of each sector and industry quota for each implementation year.

"Additional allocation of emission permits" refers to the allocation of emission allowances from the 'Emission Permits in Reserve for other use reserve' of the relevant sector when a facility requires additional emission allowances due to new construction or expansion of facilities, changes in production items, or modifications to project plans during or just before the planning period. This is applicable when the sum of emissions and internal reduction achievements within the compliance year exceeds the allocated amount for the compliance year by the facility, and when the allocated amount is increased.

• Company emissions in the year of implementation + Performance of company's internal reduction in the year of implementation > Company quota for the year of implementation 

To ensure that Business Entities during the base year do not suffer from disadvantages in terms of allocation, the reduction achievements made during the base year are separately recognized when considering the allocation quota for the planning period. If reduction achievements from the base year of the third planning period are recognized, they can be reflected in the pre-allocation quota for the third planning period.

 ※ Additional allocation through internal reduction is only applicable to the Grand Facing (GF) method, which is allocated based on the average          greenhouse gas emissions over the past three years, and the Benchmark (BM) method, which is allocated based on the average emissions            of the industry, is not applicable

Schedule

In order to reflect the internal reduction performance in the allocation of the emission trading system, the third party verification report and business   plan must be attached and submitted to the NGMS. The procedure for recognizing the internal reduction performance is as follows.