How South Korea enables its green transition through green public procurement

South Korea has been a pioneer of green public procurement (GPP) since 2005 when the Environment Ministry enacted legislation mandating government agencies to buy “green products” whenever possible. 

Initially, the reforms focused on two key actions: public institutions were required to create an annual GPP implementation plan with self-defined targets as well as a performance record of their green purchases. 

Green products were defined, for the most part, as those certified under the Korean ecolabel or certificate for recycled products (Good Recycled Mark). Progress has been measured through indicators such as the number and share of public institutions that submit a GPP implementation plan, the volume and value of green products purchased and the share (by volume and value) of those purchases out of total purchases. 

The benefits of these GPP measures are calculated by estimating reductions in CO₂ equivalent emissions, economic benefits and jobs created. For example, green purchases in 2017 reduced CO₂ equivalent emissions by an estimated 665,000 tons, which translates to savings from reduced pollution estimated at US$35.4 million and 4,415 new jobs created in the green economy, according to official figures. 

Over the last two decades, the reforms have been adapted to respond to the evolving environment, with a new master plan being released every five years to guide implementation.

Starting in 2010, Korea’s Public Procurement Service (PPS) designated categories of products that could only be purchased if they met certain criteria known as “Minimum Green Standards” (MGS). These categories were established in a consultation process with relevant stakeholders and revised seven times. By 2019, there were 109 MGS products, including office appliances, air conditioners, LED lights, vacuum cleaners, fans, and refrigerators. The standards relate to energy efficiency, standby power reduction, hazardous substance reduction, recycling and other environmental considerations. 

Number of MGS-designed products 

More recent developments include expanding the use of green online stores, and promoting green technology and industry development through certified green enterprises, highlighting a shift from primarily reducing carbon emissions to powering a competitive economy built around sustainability.

While implementation of the reforms is overseen by the Ministry of Environment and the Korea Environmental Industry and Technology Institute (KEITI), information on green public procurement is published online via the Green Purchasing Information Network (a hub for all things green procurement) and the centralized e-procurement platform KONEPS (and the Open Data platform).

This allows organizations such as the Korea Institute of Procurement (KIP) to analyze the impact of the reforms. A recent analysis of South Korea’s green purchases offers several key recommendations:

1. Expanding priority green certifications and products

KIP’s analysis revealed additional certifications and products that could be included in the preferential purchase system for green products. It also noted that recognizing popular private-sector certifications, such as the renewable energy initiative RE100, could further incentivize suppliers. The highest performing green products were identified using a quantitative methodology that examined purchasing habits over the last three years. For example, the top products were considered those that had the highest demand among buyers, the highest supply and the greatest environmental importance (as quantified by the number of applicable certifications) (see Table 11).

2. Enhancing the operational suitability of minimum green standards 

According to KIP’s study, the product categories covered by Korea’s Minimum Green Standards could be reviewed to remove several products and add others, particularly taking into consideration emerging technologies and industries linked to realizing the government’s carbon neutrality goals, such as electric vehicles, renewable energy facilities, and greenhouse gas filters. Some minimum criteria for certain products could also be modified.

Purchasing of these products has increased dramatically over the years, from less than 1% of goods purchased in 2010 to more than 16% in 2014. Since 2014, the proportion has remained stable, as the latest KIP analysis shows. 

Green products purchased compared to all products
(in hundred million, %)

3. Expanding the use of life-cycle assessments

Life cycle assessments are a comprehensive evaluation tool used to measure a product’s long-term environmental impact on society, from the raw materials involved in the production process through to the product’s disposal. KIP’s analysis revealed low use of procurement methods that apply life-cycle cost evaluations. This is partly because the method is only applicable to 10 product categories, but the burden of having to perform a complex and specialized evaluation process is also a factor. KIP recommends expanding the number of applicable products, and introducing a suitable life-cycle cost evaluation method for “multi-supplier contracts” (the most popular contracting method).

4. Cooperation matters

To increase the number of green products and improve the criteria for green procurement products and services, KIP suggests closer cooperation among relevant government offices and buyers, and expert organizations.

By expanding the infrastructure for green procurement, PPS can more effectively utilize the government’s concentrated purchasing power to promote more sustainable purchasing. 
This active creation of demand in the public sector forms a virtuous cycle of developing a public procurement market for green products, encouraging private research and development (R&D) investment, and establishing private markets for green products.

With 60% of the world’s population living in Asia and as a powerhouse of emerging economies, other countries can learn valuable lessons from South Korea’s green procurement practices, to not only drive green growth nationally but also collectively tip the scale towards a global green transition.