Korea's New Climate, Energy and Environment Ministry: A 32-Year Reunification of Energy and Environmental Policy
Following a government reorganization bill passed by the National Assembly in September 2025, Korea's Ministry of Environment was restructured and relaunched as the Ministry of Climate, Energy and Environment on October 1. This marks the first time in 32 years, since 1993, that energy policy and environmental policy have been brought under a single ministry.
The new ministry operates under a two-vice-minister, four-bureau, four-office structure. The First Vice Minister oversees environmental conservation and resource circulation — the core functions long handled by the former Ministry of Environment — while the Second Vice Minister takes charge of energy policy, transferred from the Ministry of Trade, Industry and Energy, together with climate change response policy. Until now, energy supply and demand were managed by the trade ministry while greenhouse gas reduction and climate response sat with the environment ministry. This reorganization now places climate policy and energy policy under one roof.
Why the merger
The government concluded that achieving carbon neutrality requires energy transition (expanding renewables, reducing fossil fuel use) and climate response (emissions trading, greenhouse gas reduction) to move in lockstep. Previously, the two ministries pursued their own policies separately, which slowed inter-agency coordination — and for businesses, energy-related permits went through the trade ministry while carbon emission regulations went through the environment ministry, creating a heavy administrative burden.
What Changes for SMEs
1. A single policy window
There is now a stronger chance that inquiries about carbon-neutrality facility investment, the emissions trading scheme, and renewable energy support programs (including RE100) can be handled through one ministry. Previously, subsidies for solar and wind facilities came from agencies under the trade ministry, while greenhouse gas reduction incentives came from agencies under the environment ministry, leading to duplicate applications or missed information.
2. Potential simplification of coordination procedures
Interagency coordination for mandatory ESG disclosure, the third phase of the emissions trading scheme, and RE100 implementation support may become simpler. That said, early in the reorganization, businesses should expect some confusion as staff contacts change and processing times may lengthen during the handover.
3. Closer alignment of permitting and policy
There is potential for closer coordination between existing environmental regulatory functions, such as emission facility permits and environmental impact assessments, and the newly transferred energy policy, now that both sit within a single ministry. For companies installing greenhouse gas reduction facilities, this could streamline running permitting and support-program applications in parallel.
What SMEs Should Check Now
KITIM Consulting Support
KITIM (Korea Institute of Technology Innovation Management) provides advisory services for carbon-neutrality and ESG-related government support program applications, while continuously monitoring changes in responsible ministries and programs following the launch of the Ministry of Climate, Energy and Environment. We help SMEs prepare for carbon-neutrality facility investment, emissions trading compliance, and RE100 implementation support without information gaps caused by the reorganization. If you need assistance with related support program applications or ESG and carbon-neutrality policy response, please contact KITIM.