In March 2026, China’s 15th Five Year Plan set a target to build “around 100 national level zero-carbon industrial parks” – zones for industrial production with net-zero or close to zero carbon emissions. It marked an upgrade to what had previously been a series of pilot projects around the country and catapulted such zones to a national priority.
In China, a highly industrialised country, industrial parks have been estimated to account for nearly a third of the country’s emissions, according to the energy non-profit RMI. This means the zero-carbon target could be an important step in accelerating and deepening China’s decarbonisation, particularly in hard-to-abate sectors such as steel, cement and chemicals, which often cluster in industrial parks.
With China’s industrial ecosystem increasingly linked to global industrial supply chains, some analysts are asking whether China’s push for zero-carbon industrial parks at home could also spread overseas. According to the World Resources Institute (WRI), as of 2022, there were 159 Chinese overseas industrial parks around the world. The number continues to grow, with new parks being developed in Zimbabwe, Kenya and Indonesia.
What lessons might the world learn from China’s zero carbon industrial parks? And is there potential for Chinese companies to help propel the model to other countries, at a time when so many Belt and Road partner countries are actively pursuing industrialisation?
China’s net-zero industrial parks
The history of low- and zero-carbon industrial parks in China stretches back to at least the 11th Five Year Plan (2006-2010) when China began building so-called “pilot ecological industrial parks”. Some researchers trace the history even further back to 2001, when the first “eco-industrial park” – a sugar processing complex with circular economy features – was established in south-west China’s Guangxi province.
During the 14th Five Year Plan (2021-25), China released its “1+N” climate policy framework, which explicitly promoted the development of “green and low-carbon industrial parks” and “near-zero carbon emission demonstration projects”. This marked the “systematisation and scaling up” of emission reductions, notes a paper by Liu Jingning and Yang Li, researchers from Beijing-based environmental think-tank iGDP. By 2024, the term “zero-carbon parks” appeared in central government documents, and by March 2026 it had made its way into the 15th Five Year Plan. In end-2025, China’s National Development and Reform Commission (NDRC) published a list of 52 national-level zero-carbon industrial parks to be built before 2030.
However, while the basic principle of a “zero-carbon industrial park” is clear – that it should have net zero or close to zero carbon emissions from its operations – Chinese policymakers have provided no singular definition, including in the latest five-year plan.
In practice, as the iGDP paper notes, China’s zero-carbon industrial zones have developed in very different directions across the country, according to provinces’ economic strengths and policy priorities. One of the main challenges now is to unify standards and carbon accounting and certification systems.
China’s overseas industrial parks
Industrial parks are considered by economists and policymakers to be a central tool in economic development across much of the world. Along with their cousin, special economic zones (SEZs), they help to attract foreign investment, incentivise and de-risk the growth of industry and business, and strengthen local value chains. They have been central to China’s transformational economic growth by allowing for experimentation with market reforms in places such as Shenzhen since as early as the 1980s, when reform and opening up began. Industrial parks and SEZs have also been important features of the economic policies of many developing countries.
China is by far the largest location for the world’s industrial parks and SEZs. According to data from the RMI, nearly half of the world’s 5,383 industrial parks and SEZs are in the country. Increasingly, Chinese companies are also investing in industrial parks overseas, with nearly half of these based in Southeast Asia (45%), and the rest mostly in Africa (28%) or Europe (25%), according to a WRI report.
Some of these parks are particularly carbon intensive. For example, nickel smelting parks such as Indonesia Morowali Industrial Park (IMIP) and Indonesia Weda Bay Industrial Park (IWIP) – both of which China’s Tsingshan has significant investment in – rely heavily on coal power for their energy intensive industrial processes. IWIP alone contains 4.5GW of coal power capacity, the majority of which is invested in and operated by Chinese companies, according to a report by the Centre for Research on Energy and Clean Air and Global Energy Monitor.
Going green
A mapping of existing overseas industrial parks by the WRI shows that the majority are located in areas with rich solar resources. Its research claims there is potential for nearly 420GW of solar PV capacity at these parks, as well as over 116GW of wind power capacity. Analysis by Jing Song, a research associate with WRI China’s Sustainable Transition Center Energy Program, notes this could avoid 340 million metric tons of carbon dioxide emissions per year, equivalent to more than the UK’s annual emissions as of 2024.
Beyond technical feasibility, shifts in global trade and development policies are adding new incentives to green industrial parks.
“One thing that is clear is that many developing countries want to leverage their comparative advantages to support industrial upgrading. They want to move into the higher value adding sectors like battery making, EV assembly and so on,” says Yang Muyi, senior energy analyst at the think-tank Ember.
“But it would be very risky for Chinese investors to invest in high value sectors if [they] are still reliant on a fossil foundation, which is the case in many overseas industrial parks,” he adds. “So I think, if they want to move their supply chain overseas, they would like to attach that to a cleaner foundation.”
Sam Kimmins, director of energy for the Climate Group, echoes this point. “The ability to credibly demonstrate net-zero claims and the use of renewable electricity is an increasingly important factor for companies,” he tells Dialogue Earth.
Being able to do so can be essential to accessing markets and future-proofing their operations. He points to Europe’s carbon border adjustment mechanism (CBAM) as one example of how new trade rules are changing incentives.
Kimmins notes that regulations like the CBAM require companies to declare their carbon emissions. For an export-oriented company, “if you can locate in a [industrial] development zone that allows you to meet those demands simply by where [your operations are] located, that is a huge competitive advantage”, he told Dialogue Earth at a media briefing in Singapore in May. Those benefits accrue not only for companies, he adds, but also for the development zone and the country hosting it.
Jing Song of the WRI also points to China’s commitment to stop building coal power plants overseas, and the Guidelines for Green Development of Outbound Investment and International Cooperation released by the Ministry of Commerce and Ministry of Ecology and Environment in 2021, as added incentives for overseas industrial parks to reduce their carbon emissions.
Additionally, at the provincial level, some policies exist for evaluation of overseas industrial parks. For example, Shandong, Guangdong, Hubei and Zhejiang all integrate low-carbon performance into annual assessments of overseas industrial parks which companies from their provinces invest in, Jing Song tells Dialogue Earth.
The type of industrial park also matters. Not all are as carbon intensive as Indonesia’s nickel smelting zones or Zimbabwe’s steel industrial zone currently under development. Industrial parks that focus on light manufacturing and assembly, for example, are much easier to electrify – provided sources of electricity are clean, she says.
“From a decarbonisation perspective, electricity represents the most accessible and scalable ‘low-hanging fruit’ across China’s overseas industrial parks,” says Jing Song. Switching electricity generation to renewable and low-carbon sources “can deliver substantial and immediate emissions reductions”.
Challenges and learnings
Introducing zero carbon industrial parks to China’s overseas investments is far from simple, however. Many obstacles exist.
First and foremost is the availability of clean energy, which varies across and within countries, and depends on both natural endowments and infrastructure, such as access to the grid, Ember’s Yang tells Dialogue Earth. Another issue is access to land, particularly if industrial parks need to develop their own sources of renewable energy. Solar power, in particular, requires large areas of land, which can be hard to acquire unless properly facilitated by local governments, Yang notes.
Rooftops can offer significant space for solar panel installation. According to WRI’s research, existing Chinese overseas industrial parks have enough rooftop space to install over 2.5GW worth of solar PV. Indonesia, Cambodia and Vietnam were identified as the top three countries for such solar capacity.
Yang also points to the lack of support faced by Chinese companies investing overseas. Domestically, provincial governments, often competing to attract investments, will do everything they can to facilitate investments, including in zero-carbon industrial parks. But this isn’t always the case in other countries.
“When they [Chinese companies] go overseas, they have to do everything themselves. They have to build the industrial park, build a road, build a port and look after the local community,” Yang notes. This makes it difficult for companies to take the initiative to decarbonise their operations.
What, then, could host country governments do to better facilitate low and zero carbon industrial parks?
One lesson they could learn from China is to think about low and zero carbon industrial zones’ return to the economy, rather than returns on a project-by-project basis, which are often not enough to justify the investment, Yang suggests. But understanding the broader returns in terms of competitiveness and industrial upgrading – and making it a national priority – can help align necessary actors such as local governments, banks and companies.
In Kimmins’ view, while China’s approach has been specific to its context, “the design principles of co-ordination, risk sharing and one-stop permitting can equally be applied in market-led economies”.
Jing Song cautions that, though there are lessons to learn from China’s decarbonisation of industrial parks, they “cannot be directly replicated” overseas due to the different legal status and governance structures of Chinese industrial parks outside the country.
“However, considerable experience from China’s domestic practice can provide valuable reference,” she says. For instance, Shenzhen’s Evaluation Guide for Low Carbon Parks, released in 2018, provides higher scores for parks whose renewable energy consumption accounts for more than 15% of total energy consumption.
In early June, a group of researchers from Indonesian-think tank, the Institute for Essential Services Reform, visited Shanghai and Suzhou to learn about how China built its energy transition ecosystem. There, they were told by a solar PV company that the development of zero-carbon industrial parks requires an “iterative approach” over a long timeframe.
This is challenging in any political and economic context. But “a challenge doesn’t mean no progress”, says Ember’s Yang. “That will be determined by whether or not there are serious policy or financial actions addressing the challenges and to move things forward.”
