At the beginning of 2024, as Japan’s largest steel company Nippon Steel officially put into operation the world’s first zero-carbon hydrogen energy steelmaking plant, South Korea’s Hyundai Motor announced the construction of Asia’s largest hydrogen fuel cell production base in Busan, and Singapore Changi Airport opened the world’s first “Net-zero energy” terminal – Asia Pacific’s carbon-neutral vision is accelerating from vision to reality. In this green revolution that affects energy, industry, transportation and other fields, companies that plan ahead and accurately grasp the carbon neutral path of each country will win development opportunities. This article will provide you with a comprehensive analysis of the carbon neutrality strategies of major Asia-Pacific countries, an in-depth analysis of transformation opportunities in various fields, and provide practical action guides for companies to go overseas.
Panoramic overview of carbon neutrality in Asia-Pacific
According to the latest statistical data, the carbon emissions pattern in the Asia-Pacific region shows obvious structural characteristics. As of the end of 2023, Japan’s annual carbon emissions are about 1.1 billion tons, accounting for 21% of the total in the Asia-Pacific region; South Korea’s annual emissions are about 650 million tons, accounting for 12%; Singapore’s annual emissions are about 40 million tons, although the total amount is relatively large. Although it is small, its per capita emission level is among the highest in Asia. In terms of emission intensity, Japan’s carbon emissions per unit of GDP are 0.21 kg/USD, South Korea’s is 0.28 kg/USD, and Singapore’s is 0.23 kg/USD, all lower than the Asia-Pacific average.
Key emission industries in each country show differentiated characteristics. Japan’s carbon emissions are mainly concentrated in the three major fields of electricity (38%), industry (25%) and transportation (17%). Among them, the steel industry is the largest single emission source, accounting for 42% of industrial sector emissions. In South Korea, the manufacturing industry is the main emission source, accounting for 35%. The semiconductor and display panel industries have seen rapid growth in electricity consumption and have become a new focus for emission reduction. Singapore’s carbon emissions mainly come from the industrial sector, accounting for as much as 60%, of which the petrochemical industry contributes more than 75% of industrial emissions.
From the perspective of regional characteristics, carbon emissions in the Asia-Pacific region show three major characteristics: “high industrialization, high dependence on foreign trade, and energy structure dominated by fossil energy.” According to a research report released by the Asian Development Bank in early 2024, more than 70% of carbon emissions in the region are directly related to industrial production and international trade. Especially in the context of the restructuring of the global supply chain, industrial transfer within the region is accelerating, further increasing the pressure on carbon emissions.
Faced with this challenge, countries have successively introduced clear emission reduction timetables and roadmaps. In the “Basic Energy Plan” revised in October 2023, Japan further refined the path to carbon neutrality in 2050 and proposed the “4050 Plan”: the proportion of renewable energy will increase to 60% by 2040, and carbon neutrality will be achieved in 2050. and. To ensure the realization of the goal, the Japanese government established the “GX Economic Transformation Bond” with a total scale of 20 trillion yen to support the green transformation of enterprises.
South Korea has clarified its statutory emission reduction targets through the “2050 Carbon Neutrality Basic Law”: greenhouse gas emissions will drop by 40% by 2030 compared with 2018, and carbon neutrality will be achieved by 2050. The latest development is that the South Korean Ministry of Environment announced in January 2024 that it would expand the proportion of carbon quota auctions from the current 10% to 15%, and plans to expand coverage to companies with annual emissions of more than 20,000 tons starting in 2025.
Although Singapore has set its carbon neutrality goal “after 2050”, it has adopted a more aggressive action plan. The “Singapore Green Plan 2024” released in early 2024 proposes to invest S$100 billion in building a low-carbon technology research and development center by 2030 and establish Asia’s first sustainable aviation fuel manufacturing base at Changi Airport. At the same time, Singapore has announced that it will increase its carbon tax from the current S$5 per ton to S$25 from 2024, and plans to further increase it to S$50-80 in 2030.
Other economies have also made emission reduction commitments. Malaysia has pledged to achieve carbon neutrality by 2050 and has launched an energy transition fund with a total scale of 10 billion ringgit; Thailand plans to achieve carbon neutrality between 2065 and 2070, focusing on the development of biomass energy; Vietnam will release a new version of ” National Climate Change Strategy, which for the first time proposed a 2050 net-zero emissions target.
It is worth noting that a collaborative mechanism for carbon emission reduction is forming in the region. At the APEC Leaders’ Informal Meeting in November 2023, member states unanimously agreed to establish a regional carbon market interconnection mechanism, which will create favorable conditions for enterprises to reduce emissions across borders. At the same time, Japan, South Korea and Singapore have launched carbon credit trading pilots and are expected to achieve market interoperability in 2025.
For companies planning to enter the Asia-Pacific market, it is recommended to focus on the following points: First, the carbon pricing mechanisms of various countries are significantly different, and the cost impact needs to be assessed in advance; second, key industries are facing more stringent emission reduction requirements and should deploy low-carbon emissions as early as possible. carbon technology; third, regional cooperation mechanisms are taking shape and can actively participate in cross-border emission reduction projects. It is recommended that enterprises set up a dedicated carbon management team to regularly track policy changes and formulate an emission reduction roadmap that meets local requirements.
Detailed explanation of emission reduction pathways in key countries
2.1 Japanese model: the road to precise emission reduction led by technological innovation
Japan’s emission reduction strategy takes the “green growth strategy” as its core, and the latest revision in early 2024 highlights the characteristics of “innovation-led and market-driven”. Specifically, the Japanese government has established a GX Economic Transformation Fund with a total scale of 20 trillion yen, focusing on supporting 14 priority areas, including cutting-edge technologies such as hydrogen energy, energy storage, and nuclear fusion. Among them, the hydrogen energy industry plan is the most complete, with the goal of expanding the scale of hydrogen energy utilization to 3 million tons per year by 2030 and 20 million tons by 2050.
In terms of energy structure transformation, Japan adopts a “diversified balance” strategy. The latest energy plan proposes that by 2030, the proportion of renewable energy will increase to 36-38%, nuclear power will maintain 20-22%, and fossil energy will drop to less than 41%. To achieve this goal, Japan has launched the “Offshore Wind Power Promotion Law” and plans to build 22GW of floating offshore wind farms by 2030, with a total investment of approximately 15 trillion yen. At the same time, breakthroughs have been made in restarting nuclear power, with 12 nuclear power units now back in operation.
Emission reduction requirements for key industries will be gradually refined. The steel industry needs to reduce carbon emission intensity by 30% before 2030, and the power industry needs to control thermal power emission intensity below 0.25kg/kWh. Of particular concern is that Japan will implement the “Carbon Footprint Accounting Standard” from 2024, requiring companies with annual revenue of more than 10 billion yen to disclose Scope 3 emission data. This means supply chain emissions reduction will become a new focus.
For enterprises, the key points of compliance include: first, the construction of the carbon emission accounting system needs to be completed by the end of 2024; second, enterprises with annual emissions exceeding 25,000 tons need to participate in the carbon trading market; third, they can apply for the “Green Transformation Promotion” Bonds” support, but need to meet clear technical indicators. Currently, more than 200 companies have received support, and the average financing cost is 1-2 percentage points lower than through conventional channels.
2.2 South Korea’s Plan: Systemic Transformation Driven by Institutional Innovation
South Korea’s “2050 carbon neutrality” route features legislative guarantees. Specific goals were established through the Carbon Neutrality Basic Law: reducing emissions by 40% by 2030 and achieving net-zero emissions by 2050. The latest revision in early 2024 further refines sectoral targets, including a 35% reduction in emissions from the industrial sector, a 45% reduction from the power generation sector, and a 32.8% reduction from the construction sector.
In terms of new energy industry planning, South Korea has proposed a “triple network integration” strategy. By 2030, the three major infrastructure networks of hydrogen energy, smart grids, and microgrids will be completed, with a total investment scale of 220 trillion won. Among them, the hydrogen energy industry is developing the fastest. Hyundai Motor is building the world’s largest fuel cell factory in Busan, with an annual production capacity of 1 million units.
The industry transformation timetable has been clear: the semiconductor industry needs to fully use renewable energy by 2025; the automobile manufacturing industry needs to achieve a 30% hydrogen energy use ratio by 2030; the steel industry needs to complete the hydrogen smelting technology transformation by 2040 . The government will provide transformation fund support totaling 43 trillion won.
Enterprise response strategies should pay attention to: first, carbon quota allocation will be gradually tightened, and it is recommended to reserve in advance; second, the price of renewable energy certificates (REC) is rising, and long-term purchase agreements should be considered; third, the layout opportunities of the hydrogen energy industry chain Significantly, local partners can be sought.
2.3 Singapore Strategy: Demonstration Sample of Refined Management
Singapore’s “Green Plan 2030” is a highly refined transformation plan. The 2024 updated version highlights “four transformations”: energy transformation, industrial transformation, urban transformation and social transformation. It plans to invest S$100 billion to promote low-carbon technology research and development, focusing on the development of solar energy, hydrogen energy, carbon capture and storage (CCS) and other technologies.
In terms of clean energy transformation, Singapore adopts a “four-source synergy” strategy: solar energy, regional grid connectivity, low-carbon hydrogen energy and imported renewable energy. The goal is to achieve at least 2GW of solar installed capacity and build four cross-border power transmission corridors by 2035. The first cross-border renewable energy trading agreement has been signed with Brunei, and the annual transmission capacity will reach 100MW.
The industrial upgrading guidelines feature “precise support”. A differentiated carbon tax will be implemented for companies with annual emissions exceeding 25,000 tons, while up to 70% of technological transformation subsidies will be provided. Especially in terms of the transformation of the petrochemical industry, Asia’s first zero-carbon petrochemical park will be built on Jurong Island, with a total investment of S$5 billion.
Business opportunities are mainly reflected in three aspects: first, clean energy infrastructure construction opportunities, which are expected to release 200 billion Singapore dollars of market space; second, the demand for green financial services is strong, and the carbon credit trading and green bond markets are growing rapidly; third, There is increased demand for testing and certification services for low carbon technologies, and solutions can be developed in partnership with local research institutions.
Taken together, the emission reduction paths of these three countries have their own characteristics: Japan focuses on technological innovation, South Korea emphasizes institutional guarantees, and Singapore highlights fine management. It is recommended that enterprises choose appropriate market entry points based on their own characteristics and formulate development strategies that meet local requirements. At the same time, we should also note that the trend of regional coordination is strengthening and opportunities for cross-border cooperation are increasing.
Interpretation of key policy mechanisms
3.1 Carbon pricing mechanism
The carbon pricing mechanism in the Asia-Pacific region shows obvious differentiation characteristics. Japan adopts a dual-track system, with both a national carbon trading market and local pilot projects. As of the first quarter of 2024, the Japanese carbon market price has stabilized at 3,000-3,500 yen/ton, and the annual transaction scale has reached 280 million tons. The new round of quota allocation plan places special emphasis on efficiency standards, and efficient companies can receive up to 15% additional quota incentives.
South Korea’s carbon market is more mature and is the most active trading market in Asia. At the beginning of 2024, the carbon price exceeded 50,000 won/ton, an increase of 35% compared with the same period last year. It is worth noting that South Korea has launched the fourth phase of quota allocation reform, and the auction ratio will increase from 10% to 15%, which means that the cost for companies to obtain quotas will increase. It is expected that by 2025, the annual transaction scale will exceed 700 million tons.
Singapore adopts a hybrid mechanism that combines carbon tax and trading. The carbon tax will be increased to SGD 25/ton starting in 2024, and a quota trading platform will be established. What’s special is that Singapore allows companies to use high-quality international carbon credits to offset up to 5% of their emission obligations, providing companies with more flexible compliance options.
Enterprises participating in the carbon market should pay attention to the following key points: first, it is recommended to set up a dedicated carbon asset management team to carry out systematic carbon inventory; second, calculate the gap in advance and formulate trading strategies according to the quota allocation rules; third, pay attention to international carbon credit opportunities , especially the type of high-quality projects recognized by Singapore. Practice shows that companies with professional teams in the carbon market have compliance costs that are 20-30% lower on average.
3.2 Fiscal and tax incentive policies
The fiscal and taxation incentive policies of various countries present the characteristics of “inclusive + precise”. The 20 trillion yen GX fund established by Japan provides three types of support: first, major technological breakthrough projects can receive up to 70% subsidies; second, small and medium-sized enterprises can enjoy 50% tax credits for energy-saving renovations; third, green bond issuance can earn interest subsidy. New policies in 2024 will focus on supporting the research and development of cutting-edge technologies such as hydrogen energy and CCUS.
South Korea’s support policies pay more attention to industrial chain coordination. Establish a 43 trillion won Green New Deal Fund to provide full-chain support for key industries such as new energy vehicles and renewable energy. Enterprises’ investment in technological transformation can enjoy up to 30% income tax reduction, and small and medium-sized enterprises can also receive an additional 10% discount. Especially in the hydrogen energy industry, full life cycle subsidy support is provided.
Singapore highlights precise support. The “Enterprise Sustainability Plan” provides differentiated support for enterprises of different sizes: large enterprises can receive up to 70% of subsidies for technological transformation, with an upper limit of S$5 million; small and medium-sized enterprises can receive up to 80% of energy efficiency improvement subsidies, with an upper limit of S$3 million. Yuan. At the same time, financing costs are reduced through the green bond guarantee scheme.
When applying for these support policies, you need to pay attention to: first, do a project feasibility study in advance, especially the technical route demonstration; second, prepare a detailed emission reduction calculation report; third, pay attention to the application time window, some projects use competitive review . It is recommended that enterprises establish a policy tracking mechanism to keep abreast of the latest trends.
3.3Technological innovation support
The technological innovation support policies of various countries show obvious tilt in key areas. Japan has listed hydrogen energy, energy storage, and nuclear fusion as priority development directions, and has launched 10 tens of billions-level demonstration projects. Among them, Nippon Steel’s hydrogen energy steelmaking demonstration project received 150 billion yen in support and is expected to be completed and put into production in 2025. At the same time, technology sharing is promoted through the “Asia Zero Carbon Innovation Alliance”.
South Korea’s technological innovation support highlights industrial synergy. In advantageous fields such as semiconductors and display panels, the “unveiling the list and leading the charge” approach is adopted to support enterprises in jointly tackling key problems. Five “carbon neutral demonstration industrial parks” have been launched to test the integrated application of new technologies. In particular, Asia’s largest hydrogen energy technology verification center has been established in Ulsan to attract investment from around the world.
Singapore relies on its status as a regional innovation center to focus on developing low-carbon technology testing and certification services. Plan and build a “Future Energy Center” on Jurong Island to provide one-stop technology verification services. At the same time, through the “Singapore Green Technology Accelerator” project, market access support is provided for innovative enterprises.
There are three main ways to introduce technology: one is to directly acquire overseas technology companies or patents, and South Korea’s Hyundai has obtained a number of hydrogen energy core technologies through this method; the other is to participate in international joint research and development projects, such as those supported by Japan’s “Green Innovation Fund” cross-border cooperation projects; the third is to use the demonstration project platform to establish cooperative relationships with technology holders.
Enterprises should focus on: first, there are differences in the technical routes of various countries, and appropriate technologies need to be selected according to the target market; second, localization requirements are becoming increasingly stringent, and it is recommended to conduct adaptive research and development in advance; third, intellectual property protection has been strengthened, requiring the Pay attention to compliance. It is recommended to build an independent intellectual property system around core technologies and actively participate in international cooperation networks.
Overall, the Asia-Pacific region is forming a multi-level and all-round policy support system. Enterprises need to establish systematic policy research and judgment capabilities, accurately grasp the key points of support, and formulate development strategies that suit their own characteristics. Especially in terms of technological innovation, we must pay attention to the relationship between independent research and development and international cooperation, and enhance core competitiveness through open cooperation.
Guidelines for Transformation of Key Industries
4.1 Energy and electricity
The transformation of the energy and power industry is entering a period of acceleration. Japan’s latest energy plan proposes to increase the proportion of renewable energy to 36-38% by 2030, focusing on the development of offshore wind power and solar energy. At present, a 22GW floating offshore wind power project group has been launched, and the first phase of the 6GW project is expected to be completed in 2025. Of particular concern is the introduction of the “renewable energy priority dispatch” mechanism in Japan’s electricity market reform, which provides stable income guarantees for clean energy projects.
The power grid upgrade presents the dual characteristics of “intelligence + resilience”. South Korea launched the “Digital Grid 2030” plan, investing 85 trillion won to build a new generation of smart grid. The core is to deploy 5 million smart metering terminals and build 100 regional energy Internet demonstration zones. At the same time, the deployment of energy storage systems will be strengthened, with the goal of building 20GW-scale energy storage devices by 2030. On the technical route, large-scale lithium battery energy storage will be combined with pumped hydro energy storage, and pilot hydrogen energy storage projects will begin.
Singapore focuses on developing regional power interconnection. It has launched cross-border renewable energy trading projects with Malaysia and Indonesia, and plans to achieve 15% of electricity imports by 2030. At the same time, we are accelerating the deployment of distributed energy in the local area, proposing a “solar +” strategy to combine photovoltaics with energy storage, hydrogen energy, and smart microgrids.
Investment opportunities are mainly concentrated in four aspects: first, the development and operation of offshore wind power, with the market size expected to exceed US$50 billion in the next five years; second, the strong demand for smart grid equipment and services, especially digital solutions; third, the development of energy storage projects , including electrochemical energy storage and new energy storage technologies; fourth, cross-border power trade infrastructure construction. Investors are advised to pay attention to changes in policy support and market access conditions.
4.2 Industrial manufacturing
The transformation of industrial manufacturing is based on systematic energy conservation. Japan has proposed the “Industry 4.0 + Carbon Neutrality” strategy, requiring key industries to achieve a 30% improvement in energy efficiency by 2030. Specific measures include: promoting intelligent energy management systems, implementing equipment energy efficiency standard upgrades, and developing industrial Internet platforms. According to estimates, through systematic energy-saving transformation, enterprises can reduce energy costs by 15-20% on average.
Cleaner production standards continue to improve. South Korea will implement a new version of the “Cleaner Production Certification Standards” from 2024, covering 12 key industries. Taking the steel industry as an example, the energy consumption per ton of steel is required to be reduced to less than 520kgce, and the carbon emission intensity is reduced to less than 1.8 tons of CO2/ton. Enterprises that meet the standards can receive up to 30% of technological transformation subsidies, which is expected to drive 1.5 trillion won in investment in technological upgrading.
The technological upgrade path presents diversified characteristics. The application of hydrogen energy has become a focus, especially in high energy-consuming industries such as steel and chemicals. Nippon Steel has invested 200 billion yen in building a hydrogen energy steelmaking demonstration line and plans to put it into operation in 2026. At the same time, traditional technologies such as industrial waste heat utilization and energy-saving motor systems are also continuing to be optimized, and the investment payback period is generally 3-5 years.
Three factors need to be considered in terms of compliance costs: First, investment in equipment transformation. Depending on the industry, investment in unit capacity is between 500-2,000 yuan/ton; second, changes in operating costs, the use of clean energy will increase by 10-15%. Cost; The third is the impact of carbon price. According to the current carbon price level, production costs will increase by 3-5%. It is recommended that enterprises formulate a phased transformation plan and reasonably arrange funds.
4.3 Transportation
The electric transformation of the transportation industry is accelerating. Japan has set a goal of reaching 50% of new energy vehicle sales in 2030, of which pure electric vehicles account for 30% and hydrogen fuel cell vehicles account for 10%. To support this goal, it plans to invest 1.5 trillion yen to build a charging network and achieve full coverage of charging piles in highway service areas by 2025.
South Korea’s promotion goals are more radical, and it plans to fully electrify new car sales in 2030. Hyundai Motor Group has invested US$22 billion to upgrade its production lines and will launch 23 pure electric models by 2025. The planning of charging facilities highlights “fast charging as the mainstay and slow charging as the supplement”. The goal is to build 500,000 charging piles, of which DC fast charging accounts for no less than 30%.
In terms of shipping emission reduction, the Port of Singapore Group launched the “Green Port 2030” plan. Including measures such as electrification of port equipment, construction of shore power systems, and clean energy supply. In particular, it is at the forefront of the construction of LNG bunkering facilities and has built Asia’s largest LNG bunkering center to serve international routes.
The overall transformation schedule can be divided into three stages: before 2025, we will focus on promoting the electrification of passenger transport and the construction of charging networks; between 2025 and 2030, we will accelerate the renewal of commercial fleets and promote the demonstration of hydrogen energy heavy trucks; after 2030, we will comprehensively promote clean energy in shipping and aviation substitute. It is estimated that by 2030, the market size of the new energy vehicle-related industry chain will reach US$200 billion.
Suggestions for corporate transformation: First, passenger transport companies should start fleet renewal as soon as possible and seize the subsidy policy window; second, logistics companies can consider piloting new energy heavy trucks in different regions to accumulate operational experience; third, shipping companies need to pay attention to changes in international emission reduction rules , carry out ship modification or update in a timely manner. At the same time, it should be noted that the operation of charging facilities is becoming a new profit growth point and has good investment value.
Overall, the transformation of the three key industries faces both challenges and opportunities. The energy and power industry requires huge infrastructure investment, but the clean energy market is growing rapidly; the industrial manufacturing industry is facing greater cost pressure, but technological advances in energy conservation and emission reduction have brought new room for efficiency improvements; the transportation industry is accelerating the pace of electrification transformation, driving Related industrial chains are developing rapidly. It is recommended that enterprises choose an appropriate transformation path and pace based on industry characteristics and their own conditions, while paying close attention to policy changes and technological progress.
Enterprise opportunities and challenges
5.1 Market opportunities
Emerging industries are reshaping the market landscape. The hydrogen energy industry chain is expanding rapidly. Japan’s hydrogen energy industry development plan released in 2024 predicts that the market size will reach 10 trillion yen by 2030. At present, investment opportunities are mainly concentrated in three areas: hydrogen production equipment, storage and transportation facilities, and application terminals. It is worth noting that an obvious industrial cluster has formed in the fuel cell field, with leading companies such as Panasonic and Toyota planning to invest 2 trillion yen in the next three years to expand production.
Technological innovation shows a trend of integrated development. CCUS (Carbon Capture, Utilization and Storage) technology has made a breakthrough. South Korea’s Posco has achieved million-ton carbon capture in steel plants, and the capture cost has dropped to US$40/ton. Digital technology is deeply integrated with low-carbon transformation, and the industrial Internet platform can improve energy efficiency by 15-20%. Especially in the field of smart grids, blockchain + smart contract applications have brought new business models, and it is expected that the relevant market size will reach US$50 billion by 2025.
Business model innovation is mainly reflected in three aspects: first, the rapid development of energy service companies (ESCOs), providing one-stop energy-saving solutions; second, the rise of carbon asset management services to assist companies in carbon trading and contract fulfillment; third, sharing The economic model is promoted in the field of new energy vehicles to reduce user costs. The annual revenue of Singapore’s BlueSG shared electric vehicle project has increased by more than 200%, showing good business value.
Regional cooperation has taken on new characteristics. More than 200 companies have joined the Asia-Pacific Low Carbon Technology Alliance to promote technology sharing and mutual recognition of standards. Cross-border renewable energy trading projects are accelerating. The Laos-Thailand-Singapore power interconnection project will be completed in 2025, with annual trading power reaching 100 billion kilowatt hours. It is recommended that enterprises pay attention to regional cooperation mechanisms and seize opportunities for industrial transfer and technological cooperation.
5.2 Risk Challenges
Policy compliance risks have become increasingly prominent. The scope of influence of the Carbon Border Adjustment Mechanism (CBAM) has expanded. The European Union has included steel, cement and other products in the scope of taxation. South Korea and Japan are also studying similar mechanisms. Enterprises need to pay attention to: first, carry out product carbon footprint accounting in advance; second, establish a supply chain carbon emission management system; third, pay attention to the differences in carbon pricing in different markets. According to estimates, differences in carbon prices in different regions may increase the cost of export products by 5-15%.
Technology transformation faces multiple challenges. The first is the risk of selecting a technical route. Taking hydrogen energy as an example, technical routes such as liquid hydrogen, pipeline transportation, and organic carriers coexist, and companies need to carefully evaluate them. The second is the risk of intellectual property rights. In 2023, there will be more than 100 low-carbon technology patent lawsuits around the world; The third is the difficulty of technology integration, especially in the process of digital transformation of traditional industrial enterprises. It is recommended that enterprises adopt the strategy of “piloting first and advancing steadily” to reduce transformation risks.
Cost pressure continues to increase. The price fluctuations of raw materials have intensified, and the prices of new energy battery materials will fluctuate significantly in 2023, with some materials increasing by more than 50%. Financing costs are rising, and the average financing cost of green projects is 1-2 percentage points higher than that of traditional projects. Talent costs are increasing, and the annual salary of low-carbon technology experts generally exceeds 500,000 yuan. It is recommended that enterprises respond through the following measures: first, localize the supply chain; second, use green financial support policies; third, strengthen internal talent training.
The market competition landscape is accelerating its restructuring. Traditional energy companies are accelerating their transformation, and Japan’s three major oil companies plan to increase the proportion of new energy business revenue to 30% by 2030. Emerging companies are rising rapidly, and the average annual market value of Korean new energy companies has increased by more than 40%. Multinational companies have increased their market presence, and Tesla, Siemens, etc. have expanded their investments in the Asia-Pacific region. Facing an increasingly fierce competitive environment, companies need to reposition their market strategies. Small and medium-sized enterprises should focus on market segments, avoid direct competition with large enterprises, and seek market opportunities through differentiated development. At the same time, it is also crucial to continue to strengthen technological reserves. Enterprises can ensure investment in core technologies and maintain innovation vitality by establishing R&D innovation funds. In terms of industry chain collaboration, by establishing strategic alliances and integrating upstream and downstream resources, the overall competitiveness can be effectively improved.
In response to the current complex market environment, enterprises need to build a comprehensive risk prevention system. At the policy level, it is necessary to establish a dedicated tracking team to continuously pay attention to policy trends, regularly assess the impact of policies, and formulate corresponding response plans. In terms of technology management, it is necessary to improve evaluation standards, strengthen intellectual property protection, and actively promote industry-university-research cooperation to form a synergy for innovation. In terms of financial management, enterprises should strictly control debt levels, strengthen cash flow management, make full use of diversified financing channels such as green finance, and ensure the safety of the capital chain. In terms of market monitoring, it is necessary to establish a systematic competitor analysis mechanism, conduct in-depth research on the changing trends of market demand, adjust business strategies in a timely manner, and maintain market competitive advantages.
Overall, the low-carbon transformation not only brings significant development opportunities, but also comes with significant risks and challenges. Enterprises need to balance the relationship between development opportunities and risk management and control, and choose an appropriate development path based on their own conditions. Especially in terms of technology route selection and investment decisions, long-term development trends and short-term market fluctuations must be fully considered to ensure the sustainability of the transformation process. At the same time, we must make good use of regional cooperation mechanisms and policy support to reduce transformation costs and build long-term competitive advantages. Only with adequate preparation and planning can enterprises seize opportunities in the wave of low-carbon transformation and achieve steady development.
Suggestions for corporate actions
6.1 Short-term action plan
Under the current situation, companies first need to conduct a comprehensive compliance assessment. According to the latest revised “Carbon Emissions Trading Management Measures” in 2024, key emission companies must complete the construction of a carbon accounting system within the year. It is recommended that enterprises conduct systematic assessments from three dimensions: production process, equipment status and management system. During the assessment process, special attention should be paid to the operating efficiency of energy-intensive equipment, the carbon footprint of the raw material supply chain, and compliance with waste disposal links. Practice has shown that inviting third-party agencies to participate in assessments can provide more professional and objective diagnostic results and help companies accurately identify problems.
Setting scientific emission reduction targets is an important step in corporate transformation. Referring to the latest guidance from the Science-Based Targets Initiative (SBTi), companies should set interim targets. For manufacturing companies, it is recommended to set an emission reduction target of 10-15% in 2025 and increase it to 30-40% by 2030. Goal setting should match the company’s actual production capacity planning and technological transformation capabilities to avoid blind commitments. At the same time, a monthly monitoring and quarterly evaluation mechanism should be established to ensure the steady progress of emission reduction work.
Technical transformation plans need to be realistic and pay attention to the input-output ratio. According to the latest “Industrial Energy Saving and Green Development Guide” released by the Ministry of Industry and Information Technology, enterprises can adopt a “three-step” strategy: first, promote basic energy-saving transformation, including lighting system upgrades, waste heat recovery and other projects with investment payback periods of 1-2 years; secondly, Carry out process optimization and upgrading, focusing on production line automation transformation and key equipment updates, with an expected investment payback period of 2-3 years; finally implement clean energy substitution, such as the construction of distributed photovoltaic power generation systems, with an investment payback period of 3-5 years. It is recommended to prioritize the implementation of transformation projects with quick results and low risks, and then gradually expand the scope of transformation after accumulating experience.
Financing is the key guarantee for enterprise transformation. The “Financial Support Policy for Green and Low-Carbon Transformation” jointly issued by the National Development and Reform Commission, the Ministry of Finance and other departments in 2024 provides a variety of financing channels. Enterprises can apply for special loans for green technological transformation and enjoy a credit line increase of up to 30% and an interest rate discount of a minimum of 0.5 percentage points. In addition, qualified companies can issue green bonds. The current market interest rate of green bonds is generally 0.2-0.3 percentage points lower than that of traditional bonds. It is worth noting that some local governments have launched transformation subsidy policies, which can reach up to 50% of the total project investment. Enterprises must follow up on the application in a timely manner.
6.2 Medium and long-term strategy
The optimization of industrial layout should take a long-term perspective. With the further advancement of the “dual carbon” strategy, the industrial chain is accelerating the reconstruction. Enterprises should focus on development opportunities in key areas such as new energy industry clusters and smart manufacturing demonstration zones. For example, the Yangtze River Delta region is building a hydrogen energy industry corridor, and the Pearl River Delta region is promoting the transformation and upgrading of smart manufacturing. These are important directions for corporate layout. When adjusting the industrial layout, key factors such as energy supply, logistics costs, and talent supply must be comprehensively considered to ensure that the new layout has long-term competitive advantages.
The choice of technology route needs to take into account both the present and the future. It is recommended to adopt a “steady advance and fast exit” strategy: on the one hand, steadily promote the application of mature technologies, such as energy efficiency improvement and clean energy utilization; on the other hand, accelerate the deployment of cutting-edge technologies, such as CCUS, smart manufacturing, etc. It is particularly important to note that with the rapid development of the industrial Internet, the deep integration of digitalization and low-carbonization is creating new opportunities. Enterprises must strengthen the application of digital technology in energy management, production optimization and other fields to create intelligent and low-carbon core competitiveness.
Business model innovation is an important breakthrough for enterprise transformation. The traditional product sales model is changing to service-oriented manufacturing. Enterprises can explore new business models such as energy management services, equipment rental services, and carbon asset management. For example, a large equipment manufacturing company achieved annual revenue growth of more than 30% through equipment leasing and energy efficiency management services. When promoting business model innovation, attention should be paid to risk control. It is recommended to accumulate experience through small-scale pilot projects and then gradually promote the model after it matures.
Talent cultivation is the basis for ensuring the implementation of strategies. Enterprises must establish a complete talent development system, including training plans for management talents, technical talents and operational talents. School-enterprise cooperation can be adopted to establish a targeted training mechanism with key universities; at the same time, internal training should be strengthened to enhance the professional capabilities of existing employees. It is recommended to establish a special training fund to ensure the continuous development of talent training. Special attention should be paid to establishing an effective incentive mechanism to attract and retain core talents.
Transformation is a protracted battle that requires companies to coordinate short-term actions and long-term strategies. In the short term, we must seize policy opportunities, complete compliance construction as soon as possible, and initiate technological transformation; in the long term, we must focus on future development and build sustainable competitive advantages through industrial layout optimization, technological innovation, and business model innovation. Successful transformation requires clear strategic planning, strong execution capabilities and continuous innovation power. Enterprises must establish a flexible strategic adjustment mechanism to promptly optimize development paths according to changes in the external environment to ensure that they remain competitive during the low-carbon transformation process.
Case analysis
7.1 Low-carbon transformation practices of benchmark companies
Toyota’s carbon neutrality strategy is an industry model. In the “Environmental Challenge 2050” plan updated in early 2024, the company proposed a more radical goal: it plans to reduce the carbon emissions of new vehicles by 90% by 2035 compared with 2019. Toyota has adopted a “multi-technology route parallel” strategy. In addition to pure electric models, it also vigorously develops hydrogen fuel cell technology. It is worth noting that Toyota not only focuses on emission reduction on the product side, but also carries out systemic changes in the production process. Through the introduction of intelligent manufacturing systems, the energy consumption of its main factories in Japan has been reduced by 35%; through the supplier empowerment plan, upstream companies have been driven to reduce emissions and realize the green transformation of the entire industry chain.
Hyundai Motor’s layout in the field of hydrogen energy is very forward-looking. In 2024, Hyundai will build the world’s largest hydrogen fuel cell production base in Ulsan, South Korea, with an annual production capacity of 500,000 units. Its innovation lies in the construction of a complete hydrogen energy industry ecology: upstream layout of green hydrogen production, cooperation with Saudi Aramco to build overseas hydrogen production bases; midstream development of hydrogen energy storage and transportation technology, development of a new generation of liquid hydrogen storage and transportation system; downstream expansion of applications scenario, expanding hydrogen fuel cell technology from passenger cars to commercial vehicles, ships and other fields. It is particularly worth mentioning that Hyundai has successfully opened up the Southeast Asian market through technology licensing and joint venture factory building, forming a replicable international development model.
The green transformation case of Singapore Changi Airport shows the innovative path of low-carbon transformation in the service industry. Facing the pressure of carbon emissions from the air transport industry, Changi Airport completed the zero-carbon renovation project of the fourth terminal in 2024. Its core measures include: building a 100-megawatt photovoltaic power generation system to meet 40% of electricity demand; deploying a new generation of building energy management system to achieve precise load regulation; promoting electrified ground handling equipment and realizing comprehensive electrification of airport internal logistics. The most distinctive feature is its “Green Incentive Plan”, which provides landing fee discounts to airlines that use sustainable aviation fuel, effectively promoting emission reductions throughout the aviation industry chain.
From the practice of these benchmark companies, we can summarize several key experiences: First, we must establish clear phased goals and promote transformation through a forced mechanism; secondly, we must adopt diversified technical routes to reduce transformation risks; thirdly, we must Pay attention to the coordination of the industrial chain to drive upstream and downstream enterprises to jointly transform; finally, we must make good use of policy support and market mechanisms to reduce transformation costs. These experiences have important reference significance for Chinese enterprises.
7.2 Analysis of cases of international development of Chinese enterprises
In terms of successful experience, CATL’s overseas expansion is a model. The company successfully entered the European market by building a super factory in Germany. Its success factors include: deeply localized operations, with more than 70% of employees from the local area; focusing on technological innovation and setting up R&D centers in Europe; establishing a complete supply chain system to achieve localized matching of core components. It is particularly worth mentioning that CATL has quickly gained market recognition by establishing strategic cooperation with vehicle manufacturers such as Volkswagen and Daimler.
However, Chinese companies also face many challenges in the process of internationalization. For example, when a photovoltaic company invested in Southeast Asia, it failed to fully assess the local power supply situation, which resulted in frequent shutdowns of the factory after it was put into operation, causing heavy losses. Another new energy company fell into a long-term legal dispute because it failed to properly handle intellectual property issues during its merger and acquisition in Europe. These cases remind us that overseas expansion requires more careful and systematic planning.
Based on practical experience, the following risk prevention suggestions are put forward for enterprises’ overseas development: First, conduct comprehensive due diligence, especially to assess key factors such as policy risks and environmental standards in the host country; second, establish a localized management team and be familiar with local laws regulations and business environment; third, attach importance to intellectual property protection and establish a complete patent layout; fourth, do a good job in exchange rate risk management and adopt diversified financing methods.
For the international development path of Chinese enterprises, it is recommended to adopt a “step-by-step” strategy: in the first stage, focus on technology export and product exports to accumulate experience in the international market; in the second stage, overseas construction or mergers and acquisitions will be carried out to expand market share; in the third stage Promote the internationalization of research and development and establish a global innovation network. In terms of market selection, it is recommended to give priority to countries along the “Belt and Road”, especially the Southeast Asian market. These areas are friendly to Chinese enterprises and have great development potential.
In addition, enterprises should make full use of international cooperation mechanisms and policy support. For example, we can use the green development fund under the framework of the China-ASEAN Free Trade Area to reduce overseas investment costs; carry out technology transfer and capacity building through the “South-South Cooperation” mechanism; and use bilateral investment protection agreements to prevent investment risks. A special reminder is that companies should pay close attention to the evolution of the global carbon pricing mechanism, plan carbon asset management in advance, and prepare for future international competition.
In general, the internationalization of Chinese enterprises faces both important opportunities and complex challenges. The key is to draw on the experience of international benchmark companies, combine it with its own characteristics, identify market positioning, choose an appropriate development path, establish an effective risk prevention and control system, and achieve steady and sustainable international development.
Future Outlook
8.1 Policy trend analysis and response strategies
From the perspective of policy evolution, the “dual carbon” related regulatory system is accelerating and improving. It is expected that the “Carbon Emission Management Regulations” will be officially promulgated in 2025, which will be my country’s first comprehensive regulation to coordinate carbon emission reduction. Its core points include: expanding the coverage of carbon emissions trading and lowering the inclusion threshold from the existing 26,000 tons of annual emissions to 10,000 tons; strengthening carbon verification responsibilities and introducing a credit rating system for third-party verification agencies; establishing carbon emission data disclosure Mechanism that requires key companies to regularly disclose their emission reduction progress. Enterprises need to plan in advance, improve the carbon emission management system, and prepare for the tightening of policies.
Supportive policies are expected to be further strengthened. The Ministry of Finance has made it clear that during the “15th Five-Year Plan” period, a 100 billion low-carbon development fund will be established to focus on supporting the research and development of key technologies and the construction of demonstration projects. Local governments are also increasing support policies. For example, Jiangsu Province has launched green technological transformation subsidies that can reach up to 60% of the investment amount. Zhejiang Province has given preferential land quotas to enterprises in key fields such as photovoltaics and energy storage. It is recommended that enterprises closely track various support policies, prepare project reserves in advance, and declare subsidy funds in a timely manner.
Regional coordination mechanisms are forming a new pattern. Beijing-Tianjin-Hebei, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area have launched regional carbon market integration pilots to explore cross-regional mutual recognition and trading of carbon quotas. The Yangtze River Economic Belt is promoting a “common but differentiated” emission reduction responsibility sharing mechanism and establishing an upstream and downstream collaborative governance system. This provides companies with more ways to reduce emissions and market opportunities. Especially in terms of industrial transfer and layout optimization, companies can make full use of regional coordination mechanisms to optimize resource allocation among different regions.
8.2 Market prospects and investment opportunities
Market opportunities in key areas are emerging rapidly. According to the latest market forecasts, by 2025, the annual sales of new energy vehicles in my country will exceed 10 million units, driving the rapid development of supporting industries such as power batteries and charging and swapping facilities; the annual new installed capacity of photovoltaic and wind power is expected to exceed 200GW, and related equipment The scale of the manufacturing and operation and maintenance service market can reach trillions; the industrial energy-saving transformation market is expected to grow at an average annual rate of more than 25%, especially in high-energy-consuming industries such as steel and chemicals, where there is strong demand for energy-saving and emission reduction transformation.
Technological development presents new trends. In the field of hydrogen energy, breakthroughs have been made in technologies such as proton exchange membrane electrolyzers and high-density hydrogen storage, and the cost is expected to be reduced by 40% in 2025; the CCUS technology route is gradually becoming clearer, and the commercialization process of new capture technologies represented by membrane separation is accelerating; digitalization Technology and low-carbon transformation are deeply integrated, and energy management platforms based on the industrial Internet have become a new trend. It is recommended that when laying out technology, enterprises should not only pay attention to mature technologies that have been marketed, but also proactively deploy cutting-edge technologies to build technological reserves for step-by-step development.
From the perspective of investment value analysis, low-carbon economy is spawning new investment hot spots. The first category is hard technology fields with technical barriers, such as third-generation semiconductors, new energy storage materials, etc. Although the initial investment in these fields is large, once breakthroughs are made, considerable returns will be brought; the second category is the field of business model innovation. Service-oriented businesses such as contract energy management and carbon asset management are characterized by light assets and high gross profits; the third category is the digital transformation of traditional industries, such as intelligent manufacturing upgrades, supply chain optimization, etc., with vast market space and relatively manageable risks. control.
Specific to the investment strategy, it is recommended to adopt a “three-in-one” approach: infrastructure investment should seize opportunities for new power system construction, especially in areas such as ultra-high voltage and smart grids; industrial investment should focus on the layout of the new energy industry chain, focusing on upstream materials and core components. and other links; financial investment must make full use of green financial instruments, including green bonds, carbon assets, ESG funds, etc.
Investment risk prevention and control also requires special attention. The first is policy risk, as subsidy reductions and tighter supervision may affect project returns; second is technical risk, as accelerated iteration of new technologies may lead to early obsolescence of equipment; and third is market risk, as problems such as overcapacity and price wars have emerged in some areas. It is recommended that enterprises establish a complete risk assessment mechanism, reasonably control the pace of investment, and moderately diversify investment portfolios.
Looking to the future, low-carbon transformation presents both challenges and opportunities. Enterprises must proactively adapt to policy trends, seize market opportunities, and take the lead in the wave of green development through technological innovation and business model innovation. It is particularly important to establish a dynamic strategic adjustment mechanism to optimize development paths in a timely manner based on policy changes and market evolution to ensure continued competitiveness in the low-carbon economy era. At the same time, we must pay attention to risk management and adopt sound investment strategies to achieve sustainable development.
In terms of specific actions, it is recommended that enterprises focus on the following aspects: first, strengthen policy research capabilities and establish policy tracking and analysis mechanisms; second, strengthen investment in technological innovation and build an innovation consortium; third, optimize business models and explore new Profit growth point; finally, improve the risk management system to ensure steady development. Through systematic planning and solid execution, companies can seize opportunities in the wave of low-carbon transformation and achieve high-quality development.
