Did you know that APAC nations are leveraging green industrial policies, through massive subsidies for EVs, solar manufacturing, and hydrogen production, to achieve economic sovereignty amid escalating global green trade tensions? Countries like China, India, Japan, and Indonesia are deploying targeted incentives, local content rules, and tech localisation to dominate clean energy supply chains, countering US IRA subsidies and EU Carbon Border Adjustment Mechanism tariffs. This strategic pivot transforms green manufacturing from cost competition to geopolitical resilience, securing critical minerals and jobs while accelerating the energy transition.
How are APAC countries using green policies to boost competitiveness?
- China’s dominance in solar and battery supply chains: Through “Made in China 2025” extensions and $100B+ subsidies, China controls 80% of global solar PV production and 70% of EV batteries, enforcing domestic content requirements that shield against Western tariffs while exporting green tech dominance.
- India’s PLI schemes for EVs and renewables: The $25B Production Linked Incentive program mandates 50% local value addition for solar modules and EV components, attracting Tesla and Foxconn factories while building self-reliance against import dependencies.
- Japan’s hydrogen and critical minerals strategy: Government-backed subsidies fund blue/green hydrogen hubs and rare earth recycling, with JETP funding ensuring supply security amid US-China tensions over battery metals.
- Indonesia’s nickel downstreaming policy: Export bans on raw nickel ore, coupled with $15B smelter investments, capture 40% of global EV battery nickel processing, converting resource curse into green industrial power.
Why is green industrial policy critical amid global trade tensions?
US Inflation Reduction Act local content rules and EU CBAM tariffs threaten APAC exporters with 20-50% cost penalties, forcing subsidy races that prioritise sovereignty over free trade. These policies secure energy independence, create millions of green jobs, and hedge against supply disruptions from geopolitics and mineral cartels. APAC’s coordinated approach positions the region to lead $7T annual clean energy investments by 2030.
How can organisations and policymakers accelerate this transition?
- Secure policy-aligned investments: Partner with national PLI schemes and local content mandates to access subsidies while mitigating trade risks.
- Build resilient supply chains: Vertically integrate from minerals to final assembly, leveraging FTAs like RCEP to bypass Western barriers.
- Innovate beyond subsidies: Invest in next-gen tech like solid-state batteries and perovskite solar to maintain competitive edges.
- Navigate trade diplomacy: Engage in plurilateral green agreements that harmonise standards while protecting domestic champions.
Strategy&Ops helps APAC stakeholders decode green industrial policies through subsidy optimisation, supply chain localisation strategies, and trade compliance roadmaps. Contact our multidisciplinary team at info@strategyandops.net to secure your competitive edge.
#GreenIndustrialPolicy #APACSovereignty #EVSubsidies #SolarManufacturing #HydrogenEconomy #TradeTensions
References
Climate and Community. Global Green Industrial Policy: Navigating Power Dynamics for a Pro‑Working‑Class, Pro‑Development Green Transformation (September 2025). Available at: https://climateandcommunity.org/wp-content/uploads/2025/08/Global-Green-Industrial-Policy_report.pdf
Council on Foreign Relations (CFR). Repositioning the Debate on Subsidies and Industrial Policy. Available at: https://www.cfr.org/article/repositioning-debate-subsidies-and-industrial-policy
CSIS. Green Industrial Policy: A Holistic Approach (Center for Strategic and International Studies, 27 February 2024). Available at: https://www.csis.org/analysis/green-industrial-policy-holistic-approach
Fulcrum. How Green Industrial Policies are Advancing in the Asia‑Pacific. Available at: https://fulcrum.sg/how-green-industrial-policies-are-advancing-in-the-asia-pacific/ FULCRUM
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TNI (Transnational Institute). Green Industrial Policy in Asia Pacific and the Global Supply Chain: A Dynamic Exchange of Ideas for a Sustainable Future (27 August 2025). Available at: https://www.tni.org/en/article/green-industrial-policy-in-asia-pacific-and-the-global-supply-chain