Powering a new era of net-zero transportation through clean energy initiatives in China, Japan, and South Korea is projected to require an investment of $12.4 trillion, according to a recent ING report. This figure represents over 90% of China’s GDP for the year 2020.
The report, authored by Rob Carnell, ING’s regional head of research for Asia-Pacific, notes that breaking this financial burden into manageable segments over the next 30 years—or even 40 for China—could significantly alleviate economic pressures. Under this model, the annual expenditure would decrease to 0.6% of current GDP for Japan and South Korea, while China, which remains heavily dependent on fossil fuels, would incur an annual cost of 1.8%.
Carnell remarked, “Examining the transportation sector—a vital component of the transition in these countries—provides insight into the substantial challenges that lie ahead. There is a significant gap between the ambitious net-zero carbon targets and the strategies necessary to achieve them. Many governments have yet to make substantial progress in addressing the transition, which is poised to disrupt existing industries significantly.”
Nonetheless, Carnell suggests that this transformation may invigorate stagnant economies. If the transition proceeds without delay, the goal of greening Asia’s transportation sector is within reach.
ING’s findings come at a time when there is escalating global pressure for China, Japan, and South Korea—which collectively produce two-thirds of Asia’s emissions—to enhance their decarbonization strategies. The financial responsibility for this considerable undertaking is expected to fall primarily on the private sector, leveraging green bonds, sustainability-linked instruments, and potentially novel financial solutions.
For more insights, you can access ING’s complete report here.