On May 20, Acting Minister of Economy and Finance Kim Beomseok, chaired the 5^th Sustainable Economy Policy Council (formerly the ESG[1] Policy Council) at the Korea Trade Insurance Corporation. The meeting discussed the policy direction and future tasks related to key carbon neutrality initiatives, including the Climate Fund, Korean Emissions Trading Scheme, and Government Green Bonds.

 * Participants: Acting Minister of Economy and Finance (Chair), Ministry of Trade, Industry and Energy, Ministry of Environment, Ministry of SMEs and Startups, the Korea Chamber of Commerce and Industry, Korea Enterprises Federation, Korea Financial Investment Association, Korea Exchange, Citibank, and Hana Bank.

The Council’s name has been changed from the “ESG Policy Council” to the “Sustainable Economy Policy Council” to reflect its expanded focus, not only on reinforcing ESG practices from a corporate

and investment perspective, but also on fostering sustainable development across social, economic, and environmental systems as a whole. Going forward, the Council will continue to serve as a

platform to facilitate extensive dialogue and cooperation with the private sector – encompassing companies, investors, related institutions, academia, and subject-matter experts – on a wide range of

sustainability-related policies, including ESG.

Today’s meeting brought together private-sector experts, industry representatives, and government agencies to discuss: The direction for the 2026 Climate Fund budget (Ministry of Economy

and Finance), current status of the 4^th Allocation Plan of the Korean Emissions Trading Scheme and future plans (Ministry of Environment), and current status of government green bond issuance in

major countries and implications (Korea Institute of Finance). The meeting served as an opportunity to strengthen policy coordination efforts between the government and private sector on carbon

neutrality initiatives.

The Ministry of Economy and Finance (MOEF) first shared the 2026 Climate Fund Directions and gathered feedback from the participants. The 2026 Climate Fund will focus on: Expanding

greenhouse gas reduction efforts through support for eco-friendly public infrastructure^*; promoting green finance to facilitate private-sector-led investment; supporting core technology R&D to close

technological gaps; and ensuring a just transition to a low-carbon economy by mitigating potential shocks, such as those stemming from the phase-out of coal-fired power plants.

* e.g., Infrastructure to facilitate a circular economy, such as public pyrolysis facilities and biogas conversion facilities for waste resources.

In addition, key issues related to the “4^th Allocation Plan for the Korean Emissions Trading Scheme (2026-2030) ” – which outlines the detailed implementation framework under the “4^th Basic Plan for the Korean Emission Trading Scheme (2026-2035)” – were reviewed. Diverse opinions were gathered on specific matters such as the allocation method of emissions allowances and market stabilization measures.

Furthermore, the meeting shared cases of government green bond issuance from countries such as France, Germany, and the United Kingdom, which are already active in the global green finance market. This provided a basis for in-depth discussions on Korea’s future direction for government green bond issuance and strategies to boost private sector green investment. In the discussion, private-sector experts emphasized the critical role of private capital in achieving carbon neutrality and offered suggestions for diversifying the revenue sources of the Climate Fund and expanding the demand base for government green bonds. Based on the meeting’s input and further consultation with government bond market participants, MOEF plans to review amendments to relevant legislation, including the Framework Act on Carbon Neutrality, in the second half of this year and to gradually improve infrastructure such as the National Fiscal Information System.