1.

President Trump’s Climate Policy Direction in His Second Term
 
Agenda 47, released for the first time in 2023 during  Donald J. Trump’s campaign for the 47^th President, outlines his vision and policy priorities. As Donald J. Trump became the Republican presidential candidate at the Republican National Convention on July 15, 2024, Agenda 47 was adopted as the Republican Party platform (“Platform”) and was summarized more concisely for campaign purposes. Interestingly, the final version of the Platform, spanning 16 pages with detailed commitments across ten chapters, does not mention the word “climate.” Instead, President Trump’s climate policy direction is embedded in economic and trade-related commitments, such as “Unleashing American Energy,” “Cut Costly and Burdensome Regulations,” and “Reliable and Abundant Low Cost Energy.” Insights into this direction are further revealed throughout President Trump’s campaign statements.
 
Firstly, the Platform seeks to expand policies that prioritize economic factors over environmental ones. Notably, the third commitment, which is centered on the economic agenda—“Build the Greatest Economy in History”—clearly outlines five specific strategies (i.e., Cut Regulations, Make President Trump’s Tax Cuts Permanent and No Tax on Tips, Fair and Reciprocal Trade Deals, Reliable and Abundant Low Cost Energy, and Champion Innovation). Through these strategies, President Trump demonstrates his commitment to positioning the United States as the nation with the lowest energy and electricity rates in the world. He plans to achieve this by implementing tax reductions and leveraging all available energy resources, including oil, gas, and nuclear power. He views affordable and plentiful electricity as vital in the age of artificial intelligence (AI), a burgeoning industry poised to shape the future. By securing a stable energy supply, it appears that he aims to gain an advantage in the nation’s competition with China.

Secondly, the Platform seeks to reduce costly green policies suspected to have impeded economic viability. In contrast to the Biden administration’s aggressive climate change initiatives, President Trump underscores the end of the Green New Deal and highlights “Unleash[ing] American Energy” as the first item in his campaign promise to “defeat inflation and quickly bring down all prices,” as outlined in the first chapter of the Platform. Additionally, the Platform sharply criticizes the Biden administration’s electric vehicle policies and support for renewable energy, suggesting a strong intention to reverse these policies.
 
These approaches become more evident in the selection of heads relevant departments and during their confirmation hearings. Doug Burgum, the chair of the National Energy Dominance Council —newly launched with the purpose of overseeing the national energy strategy — and the Secretary of the Interior, used to be the governor of North Dakota, the third-largest state in terms of United States’ oil reserves and production. In May 2024, Burgum remarked that “Trump would halt President Joe Biden’s attack on fossil fuels.” At his confirmation hearing earlier this year, Burgum stated that “America’s offshore oil and gas resources are vital assets that need rapid development.” He expressed his plan to expand energy production, such as oil and gas, on federal lands to maintain low-cost energy and job creation. He also proposed streamlining the permitting process for critical mineral development to reduce dependence on China. Chris Wright, the Secretary of Energy, used to serve as the CEO of Liberty Energy, the second-largest hydraulic fracturing company in the United States, and was known as an oil tycoon. He has expressed skepticism about the climate crisis, stressing that the benefits derived from fossil fuels outweigh the potential damages caused by climate change. During his confirmation hearing, Wright emphasized the importance of the natural gas industry to the US economy, and at the same time, also mentioned technological innovations, such as next-generation geothermal energy, small modular reactors (“SMRs”), and advanced batteries. Meanwhile, former House Representative Lee Zeldin has been appointed as the Administrator of the United States Environmental Protection Agency (“EPA”), which is responsible for overseeing the country’s environmental policies. Zeldin has previously opposed eco-friendly legislation that, in his view, restricts economic activities like oil drilling. Upon his nomination, he stated, “We will restore US energy dominance, revitalize our auto industry to bring back American jobs, and make the US the global leader of AI.” During his confirmation hearing, Zeldin explained that President Trump referred to climate change as a hoax due to concerns over the high costs associated with low-carbon transition policies. He indicated that future environmental policies would take into account various factors, including economic viability. Considering that Zeldin’s nomination was announced earlier than those of Burgum and Wright and, in an unusual move, even before major cabinet appointments, this timing is seen as a reflection of President Trump’s strong commitment to pursuing the policies described above.
 
For reference, in response to questions about the US version of CBAM (the Foreign Pollution Fee Act), Jamieson Greer, the US Trade Representative (“USTR”), called it an interesting idea and noted that a creative approach would be needed, leaving the possibility of its introduction open. Moreover, the Secretary of Treasury Scott Besant, who pointed out the issue of renewable energy lacking economic viability without subsidies and stressed the need for diverse energy sources, remarked that if climate change is not addressed, the costs could become burdensome for both businesses and citizens. His response reflected a blend of both perspectives mentioned above.
 
Since the executive orders announced after President Trump’s inauguration mainly direct the heads of various departments to review the related policies, it is important to carefully consider their statements to anticipate future policy implementations.
 

2.

Key Executive Orders and Follow-Up Actions (Environment, Energy, and Int’l Cooperation)
 
The second Trump administration, as previously indicated, is swiftly reversing the policy direction of the Biden administration through a series of executive orders issued immediately upon taking office. Notably, these executive orders are evolving beyond mere declarative actions, mandating federal agencies to undertake specific reviews and follow-up measures. This shift influences departmental priorities and resource allocation, and substantial policy changes are expected to become more apparent when federal agencies submit detailed reviews and implementation plans.
 
First, the key change in the environmental sector is the executive order titled “Initial Rescissions of Harmful Executive Orders and Actions,” announced on January 20, 2025, the day of inauguration. This executive order rescinds a significant number of the Biden administration’s policies, including those in the climate and environmental domain: it addresses 78 executive orders, memoranda, and declarations issued by the previous administration mainly in connection with efforts to tackle the climate crisis, such as halting new oil and gas leases on federal lands and waters, and expanding renewable energy production. The rescinded policies include (i) withdrawing oil and natural gas leases on approximately 600 million acres of the American Outer Continental Shelf — an area about 25 times the size of South Korea —, (ii) establishing detailed targets for achieving a carbon-free electricity sector by 2035 and net-zero emissions by 2050, (iii) interdepartmental cooperation and a White House-led directive to coordinate the Inflation Reduction Act (IRA),^[1]  and (iv) departmental considerations for the efficient execution of investments under the Infrastructure Investment and Jobs Act (IIJA).^[2] These moves reflect President Trump’s swift fulfillment of his campaign promise to retract the Biden administration’s environmentally friendly policies.
 
As a notable follow-up action, on March 12, the EPA Administrator announced the “31 Historic Actions to Power the Great American Comeback,” described as “the largest regulatory rollback in American history.” This announcement involves a comprehensive reassessment of key environmental policies from the Biden administration. Specifically, it revisits the targets for reducing carbon dioxide emissions from coal and natural gas power plants, regulations on methane and greenhouse gas monitoring in the oil and gas industries, wastewater regulations for coal and gas power plants, mandatory greenhouse gas emission reporting and mandatory electric vehicles for over 8,000 facilities, and nitrogen oxide emission standards for trucks.
 
In the energy sector, President Trump declared a National Energy Emergency on his first day in office, prioritizing energy security as a national concern. This emergency declaration is based on the National Emergencies Act (NEA), which grants the President the authority to swiftly respond to energy crises. President Trump also announced a major executive order titled “Unleashing American Energy.” Key elements include the reevaluation of the policy mandating electric vehicles, state-specific emission standards and subsidy systems, a freeze on execution of the previous administration’s budget under the IRA and IIJA, and requirement to submit a comprehensive review report within 90 days. This executive order also excludes consideration of the social cost of carbon in federal decision-making processes and designates oil, natural gas, coal, biofuels, and nuclear power as core energy sources for the United States, directing expedited processing of related permits.
 
As a subsequent measure, on February 14, 2025, the Department of Energy approved the export for the Commonwealth LNG project in Louisiana, and on March 5, 2025, it completed the approval process for the Golden Pass LNG export and terminal facilities in Texas. Notably, media reports suggest that the latter could commence commercial exports as early as the end of this year. On March 12, 2025, the EPA issued an internal memorandum stating “it will refrain from enforcement actions that would halt the operation of energy production and generation facilities unless there is evidence of an immediate and significant threat to human health.” The EPA claims that this reevaluation of existing policies will promote a decline in energy prices.
 
In the realm of international cooperation, President Trump has issued executive orders to strengthen America First in foreign aid and international environmental agreements. The executive order titled “Reevaluating and Realigning United States Foreign Aid” immediately freezes all foreign aid for 90 days, aiming to reassess and realign the direction of such aid. The Office of Management and Budget (OMB) has been directed to review and decide on the continuation of this freeze within the 90-day period. Moreover, the executive order titled “Putting America First in International Environmental Agreements” readjusts the United States’ stance on international environmental agreements. Under this executive order, the United States has promptly submitted its letter to withdraw from the Paris Agreement to the United Nations Framework Convention on Climate Change (UNFCCC),^[3] and all departments are required to submit plans for withdrawing the US International Climate Finance Plan.
 
Following these executive orders, the Trump administration is significantly reducing the scale of its foreign aid efforts, as demonstrated by the layoff of over 2,000 employees from the US Agency for International Development (USAID) due to aid suspension. Furthermore, on March 6, 2025, the US withdrew from the Just Energy Transition Partnership (JETP)^[4] with developing countries. This move is part of the executive order to retract the International Climate Finance Plan, and the US withdrawal — particularly after pledging USD 1 billion support to the South Africa JETP project — may impact the partnership’s sustainability.
 

3.

Sectoral Outlooks
 
Under the projected climate policies of President Trump’s second term, the major outlooks for key sectors are summarized as follows.
 
First, in the environmental sector, environmental regulations in the US are expected to be relaxed for the time being. However, as discussions on the introduction of a carbon border tax are likely to continue, it is vital to closely monitor the specifics of its application and the method used for calculating applicable taxes. Moreover, at the end of March, the US Securities and Exchange Commission (SEC) informed the court of its decision not to defend the lawsuit brought by companies seeking to nullify the requirement to disclose climate-related risks and greenhouse gas emissions. This suggests that the Climate Disclosure Rules are unlikely to be enforced. Nevertheless, if the climate disclosure legislation proposed in New York State is enacted, most major companies in the US, including those in California, would effectively be subject to climate disclosures. Moreover, with the rollback of key environmental policies from the Biden administration, the emission standards for methane, automotive, and power plant are likely to be significantly relaxed. In the long term, this could weaken the global competitiveness of the US in clean technology. Meanwhile, the US is also considering the introduction of a carbon border tax to protect its industries and ensure fair competition with China, mirroring the EU’s carbon border adjustment. The USTR and Secretary of Treasury under President Trump’s second administration have shown interest in a carbon border tax, and Vice President Pence has remarked that US products have lower carbon emissions compared to those from other countries. This was because several carbon border tax bills have been proposed in the US over the past two years: In December 2024, even Republican Senators unveiled an amendment to the existing Foreign Pollution Fee Act, which originally imposed import tariffs based on emissions for 16 products (such as aluminum, steel, cement). The amendment specifies a 15%+ tariff and limits the scope to six products: aluminum, cement, steel, fertilizers, glass, and hydrogen. The discussion around carbon border tax has gained bipartisan interests for several reasons, including protecting American industries from the EU’s climate policies, securing tax revenues, and countering China’s influence. As a result, the carbon border tax may be considered as a protectionist measure rather than purely for environmental regulation.
 
In the energy sector, the disparity in the performance of various technologies in the United States is expected to increase, while its long-term impact on the global clean energy market would rather be limited. For example, the use of fossil fuels and nuclear energy is expected to rise within the US, while more expensive technologies like offshore wind are expected to see a significant decrease, leading to a divergence in technological advancements depending on technology. In early March 2025, a new investment of USD 18 billion in LNG exports was announced, when there have been announcements of withdrawals from investments in renewable energy such as offshore wind. According to analyses by global energy institutions, including Bloomberg NEF and Wood Mackenzie, solar and wind power installations in the US could decrease by 17% to 30% over the next decade due to the return of the Trump administration. However, as reported in the International Renewable Energy Agency’s (IRENA) “Renewable Capacity Statistics 2025,” the global renewable energy capacity additions last year were 585 GW, with China accounting for 374 GW and the US 43 GW. This data suggests that the decline in renewable energy in the US has a limited impact on overall global capacity. On the other hand, policies under President Trump’s second term that aim to expand power infrastructure and lower interest rates could present opportunities for clean energy deployment, and the reduction in the US market could lead to an increase in idle equipment, including offshore wind installations, could create opportunities for renewable energy projects outside the US Moreover, more than half of the states in the US are implementing renewable energy distribution policies. Even in Republican-dominated states, many are benefiting from federal support for clean energy, making it difficult to significantly reduce the deployment of clean energy, except for federally-approved offshore wind projects.
 
Lastly, the landscape of international cooperation within the international community, particularly concerning climate change, is likely to face challenges due to the United States’ withdrawal from the Paris Agreement and the cancellation of international climate finance plans. While the parties aligning with President Trump, particularly among oil-producing countries, are anticipated to become more vocal, the inability to finalize the UN Plastics Treaty during the Busan negotiations held shortly after President Trump’s re-election was partly due to opposition from oil producing countries, including Saudi Arabia and Russia, regarding commitments to reduce plastic production. However, on March 5, 2025, the Supreme Court affirmed the trial court’s injunction to direct US$ 2 billion in foreign-aid funds for work completed in the Trump administration’s appeal in connection with the executive order on freezing foreign assistance, drawing attentions to the judiciary’s future rulings on President Trump’s policies. Despite President Trump’s withdrawal from international climate cooperation, global climate action may not lose its momentum entirely: China and the EU are poised to assume climate leadership roles to fill the gap left by the US Furthermore, despite the announcement of the United States’ withdrawal from the Paris Agreement, the parties to the 29^th Conference of the Parties (COP29) to the UN Framework Convention on Climate Change, held shortly after President Trump’s re-election, agreed to scale up financing to at least USD 1.3 trillion per year by 2035, with developed countries taking the lead by contributing at least USD 300 billion annually. In addition, the UK and Japan have disclosed more ambitious Nationally Determined Contributions (NDCs) for greenhouse gas reductions.
 

4.

Implications for Businesses
 

(1)

Leveraging Opportunities and Technological Differentiation
 
When reviewing the literature that evaluates potential impacts of President Trump’s policy direction during his second term on South Korea’s carbon neutrality goals and implementation, many experts anticipate increased burdens on Korean companies due to setbacks in climate response, tariff uncertainties, and supply chain disruptions. However, these risks can actually present opportunities. By capitalizing on the expected policy changes while thoughtfully balancing Korea’s strengths, businesses may achieve sustainable development. Technologies with short-term economic viability and stability in fossil fuels and nuclear power are likely to experience growth in the US, while significant emerging industries may also attract attention. Conversely, the US may face challenges in addressing mid- to long- term climate risks and maintaining competitiveness in the clean energy sector. Therefore, companies need to not only assess potential impacts of the short and mid- to long-term but also take a comprehensive view of the U.S. and other markets to seek opportunities.

In the short term, companies can maximize the benefits from the containment of China under President Trump’s second term or boost their competitiveness by leveraging technologies that are experiencing a surge in short-term demand. In the US, businesses have the opportunity to expand their market share in the solar energy and energy storage sectors, where entry barriers are particularly high for Chinese companies due to heightened measures to contain China’s influence. For instance, in the case of solar energy, the US Department of Commerce announced a preliminary decision last November to impose anti-dumping duties on solar products from Southeast Asia, and it expected to maintain high tariffs on Chinese solar products. This could potentially enhance the competitive edge of domestic companies in supplying solar equipment. The same applies to energy storage systems, which are increasingly being implemented in the US recently for grid stability. Moreover, as technologies that integrate fossil fuels and clean energy would likely be developed and expanded, companies should consider leading in setting global standards and reducing technology costs through, for example, increased collaboration on hydrogen and carbon capture, utilization, and storage (CCUS) technologies, which are also in high demand domestically. According to a statement released upon the appointment of Doug Burgum as the chair of the National Energy Council, the US is expected to see a significant increase in electricity supply. This would present another opportunity for companies to increase exports of power equipment with proven technological excellence. According to the International Energy Agency’s “US 2024 Energy Policy Review” published last September, 70% of US transmission lines were installed at least 25 years ago, and the average age of large transformers exceeds 40 years. Under this situation, there is an opportunity for Korean companies, with their competitive edge in power infrastructure such as transmission and distribution networks and transformers, to expand their market share in the crucial US market. Leveraging this opportunity, Korean companies could consider utilizing the time and resources thus secured to strengthen our competitiveness in the global market.

In the mid-to-long term, China’s dominance in clean energy technology is expected to grow in global markets outside of the US. According to Bloomberg NEF analysis, as of 2023, China already leads the supply chains of 11 major clean energy technologies, including solar, battery, wind, and hydrogen. While China previously anticipated the peak in its carbon emissions in 2030 and declared carbon neutrality by 2060, China already accomplished its solar and wind power distribution targets last year, which was six years ahead of schedule, and is expected to achieve its electric vehicle sales target by the end of this year, ten years ahead of schedule. Moreover, China might have surpassed its carbon emissions peak last year or would likely surpass the peak this year, which is around five years ahead of schedule. This suggests that China’s efforts to address climate change, driven by its industrial development, are exceeding expectations. China appears to be leveraging the era of electrification — where the demand for electricity, spurred by AI and other technologies, is expected to grow six times faster than overall energy demand — to solidify its price competitiveness in clean technology and strengthen its dominance in the global market. Under these circumstances, it is challenging for Korean businesses to compete on price with China’s clean energy technologies in markets outside the US. As such, to remain competitive, Korean companies should focus on developing differentiated technologies such as ultra-high-efficiency materials for solar panels, expanding the value chain for wind energy, creating safe high-density storage for batteries, and integrating ICT for power devices. Many companies already possess various element technologies within the clean energy sector, laying the groundwork for integrating these differentiated technologies. However, the policy landscape for generating demands for such technologies remains unclear. To navigate this uncertainty, companies seeking to identify and invest in differentiated technologies are advised to utilize objective data, such as the clean energy patent database. For example, big data analysis of climate technology patents — approximately 3 million worldwide — can provide detailed insights into promising differentiated technologies and reveal competitors’ level of technological advancements.
 

(2)

Competitiveness in Product Carbon Emission Information
 
As mentioned in Sectoral Outlooks, environmental regulations like emission standards and climate disclosure requirements are expected to be relaxed during President Trump’s second term. However, it cannot be ruled out that policies benefiting domestic industrial competitiveness, such as a carbon border tax, may be introduced. This is especially pertinent as it is essential to respond to the already confirmed implementation of the EU Carbon Border Adjustment Mechanism (“CBAM”). This preparation is crucial because, although information on factory emissions was necessary for regulatory compliance in the past, data on the carbon emissions of products is likely to directly influence future exports, going forward. Moreover, detailed information on greenhouse gas emissions, particularly from carbon sources, is intricately linked to factors affecting a company’s financial value. This includes investment in, and implementation of, carbon emission reduction technologies, responses to customer requests related to emissions trading schemes, and preparation for ESG disclosures, in addition to preparing for a carbon border tax. Therefore, greenhouse gas-related data serves not just as a target metric, but as a crucial component of feasibility analyses for achieving carbon neutrality and as a foundation for informed decision-making. Raising the quality of greenhouse gas information is thus imperative.

Following the EU’s lead, other countries like the UK, Australia, and Taiwan are also implementing carbon border taxes, prompting companies to respond accordingly. The calculation of a potential carbon tax would involve setting a price per ton of CO2 emissions, which would be applied to businesses based on the carbon emissions of their activities. As a result, it would have a direct impact on the cost competitiveness and sales of their products. Moreover, with the enactment of the EU Battery Regulation and Ecodesign for Sustainable Products Regulation, the disclosure of products’ carbon-related information is becoming mandatory. Companies that fail to meet certain level of these carbon emission requirements may face challenges in distributing their products within the EU market, potentially leading to blocked export routes. Therefore, companies should prioritize compliance in the markets where carbon pricing regimes are already in place, like the EU, and view this as an opportunity to manage and reduce the carbon emissions of their products exported to those markets.

For example, the EU’s CBAM will require exporters to pay carbon prices starting one year from now. The CBAM mandates importers to report and verify the carbon emissions associated with their products and purchase CBAM certificates to cover these emissions. The transitional phase, from October 2023 to December 31, 2025, primarily requires exporters to report emissions, but this process can be quite complex in practice. Even greater confusion may arise from the year when exporters will need to purchase certificates and pay for carbon prices.^[5] So far, there has been limited progress in analyzing carbon emissions per unit of exported products, which restricts comprehensive cost analysis and creates uncertainty about who will ultimately bear these costs. Additionally, the tariff-like nature of the CBAM, although not yet fully understood, could potentially present risks related to circumvention, evasion, and issues concerning the determination of the country of origin, similar to those encountered with traditional trade remedies.

Accordingly, companies should conduct a comprehensive analysis of current issues before the full implementation period when the carbon pricing scheme, such as the purchase of certificates, is enforced. First, they should verify whether the products they manufacture fall under the increasingly expanded list of carbon border tax targets. Based on guidelines like the CBAM Communication Template provided by the EU Commission, they should check their readiness, establish relevant reporting standards, and assess risk exposure. Additionally, companies should conduct a detailed review of cost impacts of the CBAM, taking into account different scenarios based on product distribution, reporting methods, and cost allocation strategies. The EU CBAM is continuously refining its system through the adoption of subordinate regulations until the definitive period. Therefore, companies should closely monitor these developments and gradually build a system that can organize and systematically manage carbon emission data at the product level to minimize the burden costs from carbon border taxes. This will enable them not only to respond to future mandatory climate information disclosures by governments or existing customer requests for carbon information, but also to position them advantageously with low-carbon products, allowing them to boost their competitive edges in advanced markets that have begun mandating carbon reductions in products by launching low carbon products ahead of international competitors, including those from countries like China.
 

5.

Outro

We have analyzed the climate policies anticipated in President Trump’s second term and examined several factors that companies should consider from the perspective of responding to climate change. While President Trump’s second-term policies are likely to weaken international climate cooperation, widen energy technology gaps in the United States, and relax environmental regulations, these changes are likely to have a limited impact on the international community in the mid-to-long run. More significantly, the effects of climate uncertainty, such as the breach of the 1.5°C threshold, pose a greater long-term challenge than projected policies of President Trump, still making climate change response burdensome over time.
 
Global advancements in the adoption of clean energy technologies, coupled with the carbon emission regulations — including the implementation of carbon border taxes — have reached a point where one country cannot afford to postpone or stifle the global momentum unilaterally. Therefore, companies must focus on mitigating risks while discovering opportunities and leveraging them to their advantage by securing relevant technologies and effectively managing carbon emission data.
 
With South Korea’s export-import ratio approaching approximately 90% relative to its GDP, it would be ideal for the government to carefully analyze the implications of Trump’s second term and devise both short-term and mid- to long-term policies. For example, the 2035 NDC and the 4^th ETS allocation are planned for this year. Through these measures, the government may provide pricing signals that enable companies to make informed decisions about carbon emissions. Additionally, it would be helpful for the government to consider supporting corporate investments in relevant technologies by implementing comprehensive measures, such as a Korean version of the IRA, to stimulate technology demand and market formation.