Floods, droughts, wildfires, and rising temperatures are stark reminders that urgent action is needed to protect our planet. Green industrial policy offers a pathway to transform economies by creating decent jobs, reducing greenhouse gas emissions, and ensuring communities thrive in a sustainable future. This factsheet, part of the IEJ’s 2025 G20 series, explores what green industrialisation means, why it matters, and how the G20 can ensure it is fair and inclusive.
What is green industrial policy?
Green industrial policy refers to strategies adopted by governments to develop environmentally sustainable industries. This includes investing in renewable energy, promoting low-carbon technologies such as green steel and green fertiliser, and phasing out polluting industries. Effective green industrial policies set a clear direction for economic development, align research and innovation with climate goals, and shift resources from low-productivity to high-productivity sectors.
Governments often support industrial transformation by providing targeted subsidies, low-cost development finance, protective trade measures, and public procurement to boost specific industries.
The fossil fuel challenge
Fossil fuel companies, backed by subsidies and minimal regulation, still dominate the global energy landscape. In 2022, fossil fuel subsidies reached $7 trillion worldwide. These subsidies make renewable energy less competitive, slowing its adoption. Well-designed green industrial policies can close this gap by supporting renewable technologies so they are affordable and accessible.
Global examples
Countries such as China, the United States, and members of the European Union have introduced national policies to boost renewable energy and green technologies. China’s targeted support for its electric vehicle industry has made it the world leader in affordable EV production and exports. These examples show that deliberate policy choices can transform industries and economies.
Challenges for developing countries
For many developing countries, implementing green industrial policies is hindered by:
- Limited financing, often requiring debt-based funding.
- Skills shortages in renewable technology sectors.
- Technological barriers and restricted access to innovations protected by intellectual property rights.
- Weak state capacity to regulate, incentivise, and manage large-scale transitions.
There is also a risk that new trade measures, such as the EU’s Carbon Border Adjustment Mechanism, could penalise developing countries reliant on carbon-intensive industries.
The G20’s role
The G20 includes major industrial and emerging economies with the power to shape global green industrialisation. In recent years, G20 leaders have pledged to promote renewable energy, develop green hydrogen, and expand access to green technologies. For the first time, the G20 is explicitly negotiating principles on green industrial policy and frameworks on critical minerals, which are essential for renewable energy systems.
What fair green industrialisation should achieve
A just green industrial policy should:
- Protect the environment for future generations.
- Ensure benefits reach disadvantaged groups, especially women, children, and climate-vulnerable regions.
- Diversify economies to reduce reliance on extractive industries.
- Support developing countries through technology transfer, fair trade agreements, and capacity building.
- Create decent work with fair wages, strong workers’ rights, and skills development.
- Build manufacturing capacity so resource-rich countries benefit from value addition.
Fighting for a just transition
The shift to green economies should not be dictated solely by governments and corporations. Communities, civil society, and grassroots movements play a critical role in shaping policies, ensuring accountability, and protecting resources. Activists can demand fair trade rules, advocate for localisation of critical mineral industries, and push for climate finance that supports green industrialisation without deepening debt.
Learn more
Explore the full findings and recommendations in the IEJ’s G20 Green Industrialisation Factsheet.
Other factsheets in the 2025 G20 series include:
Amaarah is a Junior Programme Officer in the Rethinking Economics for Africa project. She is currently studying towards her Masters in Applied Development Economics at Wits University. 
Dr James Musonda is the Senior Researcher on the Just Energy Transition at the IEJ. He is also the Principal Investigator for the Just Energy Transition: Localisation, Decent Work, SMMEs, and Sustainable Livelihoods project, covering South Africa, Ghana, and Kenya.
Dr Basani Baloyi is a Co-Programme Director at the IEJ. She is a feminist, development economist and activist. She gained her research experience while working on industrial policy issues in academia, at the Centre For Competition, Regulation and Economic Development (CCRED) and Corporate Strategy and Industrial Development (CSID) Unit.
Dr Andrew Bennie is Senior Researcher in Climate Policy and Food Systems at the IEJ. He has extensive background in academic and civil society research, organising, and activism. Andrew has an MA in Development and Environmental Sociology, and a PhD in Sociology on food politics, the agrarian question, and collective action in South Africa, both from the University of the Witwatersrand.
Juhi holds a Bachelor of Arts degree in International Relations and Sociology from Wits University and an Honours degree in Development Studies from the University of Cape Town. Her current research focus is on social care regimes in the South African context, with a particular focus on state responses to Early Childhood Development and Long-Term Care for older persons during the COVID-19 pandemic. Her other research areas include feminist economics, worlds of work and the care economy.
Bandile Ngidi is the Programme Officer for Rethinking Economics for Africa. Bandile has previously worked at the National Minimum Wage Research Initiative and Oxfam South Africa. He holds a Masters in Development Theory and Policy from Wits University. He joined the IEJ in August 2018. Bandile is currently working on incubating the Rethinking Economics for Africa movement (working with students, academics and broader civil society). 
Liso Mdutyana has a BCom in Philosophy and Economics, an Honours in Applied Development Economics, and a Masters in Applied Development Economics from Wits University. His areas of interest include political economy, labour markets, technology and work, and industrial policy. Through his work Liso aims to show the possibility and necessity of economic development that prioritises human wellbeing for everyone.
Joan Stott holds a Bachelor of Business Science in Economics and a Master’s in Economics from Rhodes University. She brings to the IEJ a wealth of experience in public finance management, policy development, institutional capacity-building, and advancing socioeconomic and fiscal justice.
Siyanda Baduza is a Junior Basic Income Researcher at IEJ. He holds a BSc in Economics and Mathematics, an Honours degree in Applied Development Economics, and is currently completing a Master’s degree in Applied Development Economics at the University of the Witwatersrand. Siyanda’s research focuses on the impacts of social grants on wellbeing, with a particular focus on the gendered dynamics of this impact. His interests include applied micro-economics, policy impact evaluation, labour markets, gender economics, and political economy. He is passionate about translating economic research into impactful policy.
Shikwane is a Junior Programme Officer at IEJ focusing on civil society support and global governance in the G20. He has a background in legal compliance, IT contracting and student activism. He holds degrees in Political Studies and International Relations, as well as an LLB, from the University of the Witwatersrand.
Dr Tsega is a Senior Researcher focusing on Women’s Economic Empowerment within the G20. She examines gender equity in economic policy, with expertise in food systems and small enterprise development. She holds a PhD in development studies from the University of the Western Cape, an MA in Development Economics, and degrees in Development Studies and Economics from UNISA and Addis Ababa University.
Nerissa is a G20 Junior Researcher at IEJ, focusing on advancing civil society priorities within the G20 framework. She bridges data, research, and policy to advance inclusive economic frameworks. She is completing a Master’s in Data Science (e-Science) at the University of the Witwatersrand, and holds Honours and Bachelor’s Degrees in International Relations with distinction. She has worked as a Research Fellow at SAIIA and a Visiting Research Fellow at Ipea in Brazil.
Dr Mzwanele is a Senior Researcher supporting South Africa’s G20 Sherpa with policy research. He holds a PhD in Economics from the University of Birmingham and an MSc from the University of the Witwatersrand. His work covers open macroeconomics, trade, finance, and higher education policy, and he has published widely on inequality, unemployment, household debt and higher education curriculum reform.
Kamal is the Project Lead for IEJ’s G20 work, focusing on sovereign debt and development finance. He holds a BComm (Hons) in Applied Development Economics from the University of the Witwatersrand and an Erasmus Mundus Joint Masters in Economic Policies for the Global Transition. He has worked with SCIS, UNCTAD and co-founded Rethinking Economics for Africa.