Industrial parks are critical platforms for driving the Chinese low-carbon transition, accounting for 31% of total carbon emissions and approximately 50% of energy consumption in the country. Historically, industrial parks have also served as vital sites for piloting new policies, developing new technologies while attracting foreign direct investments in China. To close the prevalent financing gap for the green transition, urgent action is needed to mobilise both public and private capital through innovative financing mechanisms.
Recognising the need to bring a diverse group of stakeholders together to address the challenge, GIZ collaborated with the Institute of Finance and Sustainability (IFS), the Frankfurt School of Finance & Management, the Sino-German Center of Finance and Economics (SGC) and the Taicang High-tech Industrial Development Zone to organise a workshop on “Financing for the zero-carbon park transition”. The main objective of the workshop was to facilitate in-depth dialogue between Sino-German experts while jointly advancing specific green finance practices. This event is part of a workshop series on sustainable finance conducted through a knowledge platform, which was initiated in 2024 under the framework of the Sino-German Cooperation on Climate Change – Climate Partnership.
Current development status and policy updates in China
China is home to approximately 80,000 industrial parks nationwide. However, the green transition process has been highly uneven, resulting in a stark contrast between a few ‘top-performing’ parks and the vast majority, which are predominantly small and medium-sized.
In 2024, the Central Economic Work Conference set the goal of establishing “Zero-Carbon Industrial Parks” as part of China’s broader green development agenda. Building on this objective, in July 2025, the National Development and Reform Commission (NDRC), together with the Ministry of Industry and Information Technology (MIIT) and the National Energy Administration (NEA), jointly issued a notice to promote the development of zero-carbon industrial parks, aiming to accelerate the country’s green transition. Several regulatory measures including standardisation evaluation systems (notably National-level Zero-Carbon Park Construction Indicators System (Trial)), fiscal incentives such as subsidies for clean energy, and stricter environmental information disclosure will further steer key industrial players toward low-carbon development, presenting a crucial opportunity to harness the momentum. Hence, coordinated action is urgently needed to channel investments into the ecological transformation of industrial parks, ensuring long-term impact and full alignment with national climate goals.
Unlocking finance: innovative solutions to funding challenges
The biggest financial challenge lies in mobilising the substantial upfront capital required for zero-carbon transitions while effectively mitigating and sharing the associated risks. To address these questions, experts explored various innovative financing mechanisms during the workshop. The discussion began with an overview of the current state of transition finance policy developments in China. It was highlighted that Chinese national policies are fully aligned with the G20 Transition Finance Framework, with all finance-related issues addressed on a project-by-project basis. Additionally, blended finance is currently prioritised in China due to its potential to manage and allocate risks while attracting private investment for the green transition. Moreover, sustainability disclosures, especially their quantitative aspects, are becoming increasingly important in relation to industrial parks and providing more transparency to potential investors. Finally, international cooperation is viewed as essential to mobilise additional funding not only within China but also in other countries.
This was followed by a presentation detailing how Germany is de-risking innovative investments and stimulating private investment to drive the shift to the net-zero industry. One notable funding programme is the Carbon Contracts for Difference (CCfD) scheme for high-emission industries. In this model, government funding covers the difference in costs (CAPEX + OPEX) between the conventional and “climate-friendly” plants. This programme has successfully reduced carbon mitigation costs for the steel industry by up to 27% compared to scenarios without policy support. Additionally, Germany’s green bond programme was discussed. These green federal securities, as part of Germany’s sustainability strategy, target five key sectors and contribute to the six environmental objectives outlined in the EU Taxonomy Regulation.
The discussion continued with a panel featuring experts from the financial sector – including representatives from Deutsche Bank Group, China International Capital Corporation (CICC), the China Beijing Green Exchange, Huaxia Bank, and the Asian Development Bank (ADB). The panelists engaged in a rich exchange on the roles of public and private financing in accelerating the energy transition, with a particular focus on financing the decarbonisation of industrial parks. While there was strong agreement that blended finance instruments should play a greater role moving forward, concerns were raised that the majority of current financial products remain structured as loans. Experts emphasised the need to further develop and promote pledging services as an alternative. The panel also addressed the role of carbon offsetting in meeting climate targets. The overall consensus held that offsetting should serve strictly as a complementary measure. Several other priorities were identified, including strengthening the reliability of carbon–credit verification, improving regulatory oversight of carbon pricing in the market, and expanding carbon markets to all economic sectors no later than 2027.
Transition strategies for zero-carbon industrial parks
To explore how the green transition in industrial parks can play a vital role in achieving national climate targets, a diverse panel of stakeholders including representatives from the Taicang High-Tech Industrial Development Zone, the China National Institute of Standardisation, TÜV Rheinland China, Siemens Limited China and the Energy Conservation Agency were convened to share real-economy experiences and discuss transition pathways. The discussion revealed a strong current emphasis on increasing renewable energy use within industrial parks, such as solar power, alongside efforts to enhance energy efficiency.
Additionally, industrial parks are actively working on developing standardisation tools, as significant disparities persist between national and industry-specific standards, underscoring the need for greater harmonisation. Equally important, the role of independent verification authorities in enforcing clear and consistent standards was emphasised. While progress is being made in carbon accounting methodologies and reporting frameworks, there remains a knowledge gap regarding effective implementation at the industrial park level, highlighting the need for investment in staff training and capacity building.
Another key insight from the discussion was the crucial role of robust data collection, alongside digitalisation and smart systems, in tracking carbon emissions and optimising energy consumption to advance decarbonisation within industrial parks. Beyond the current focus on energy, future priorities include transforming carbon-intensive production processes, especially tackling oversupply, adopting circular economy principles and closed-loop resource systems, as well as integrating nature-based solutions to serve as carbon sinks.
Looking ahead
One of the key takeaways from this workshop was the importance of initiating multiple pilot projects to drive the zero-carbon transition. These efforts serve to “test the waters” and draw a blueprint for scalable solutions. Given that the world is currently headed towards at least 2.6° Celsius of global warming, there is no time to postpone action in search of ideal or flawless solutions. There was broad agreement that immediate and pragmatic steps are crucial to achieving meaningful progress.
This activity is an output of the Sino-German Cooperation on Climate Change – Climate Partnership project, implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and China’s National Centre for Climate Change Strategy and International Cooperation (NCSC) on behalf of the International Climate Initiative (IKI) of the Federal Government of Germany. Within the Federal Government, the IKI is anchored in the Federal Ministry for the Environment, Climate Action, Nature Conservation and Nuclear Safety (BMUKN).
