The worldwide imperative to reduce greenhouse gas emissions and minimise the catastrophic impact of climate change is not lost on free zones. Net zero targets and sustainability initiatives are part and parcel of strategies at the world’s leading free zones. Creating an environment that is conducive to responsible business practices extends beyond the environment to the zone’s governance and levels of transparency. These are also important for the publicity-conscious multinationals they seek to retain and attract. 

To capture this, fDi Intelligence’s flagship Global Free Zones of the Year Awards recognises the world’s leading sustainability zones. The rankings are based on the answers to two questions; one about the net zero strategies of SEZs; another about SEZ efforts to boost transparency and promote good governance standards.

GLOBAL WINNERS 

(ALSO MIDDLE EAST WINNERS)

Winner: Jebel Ali Free Zone, UAE

Together with recognition as a top global industrial zone, Jafza in Dubai is applauded for its ambitious evidence-backed green strategy. Jafza aims to be carbon neutral by 2050 and is on track to achieve its 2030 target. 

Multiple independent audits show its sustainability strategy has already made significant progress. Electricity generated from renewable sources made up 93% of total electricity usage in 2023. This has enabled Jafza to cut its carbon emissions by around 57% compared to 2019 levels. 

Jafza replaces and retrofits machinery used across its zone facilities and port. It has substituted 109,000 conventional lights with more energy-efficient LED lights, retrofitted 34,000 water saving devices and planted more than 100,000 mangroves for carbon compensation. The zone has also worked to improve its services and transparency. In 2023, Jafza conducted more than 28,000 inspections of businesses in the zone and created a new complaint management system to reduce the time taken for customer complaints.

Highly commended: Khalifa Economic Zones Abu Dhabi, UAE

Kezad in Abu Dhabi, which is a subsidiary of AD Ports Group, has welcomed investment in the energy transition, including solar parks. Kezad has several initiatives to reduce its environmental impact. This is epitomised by a carbon capture scheme, which is already capturing 800,000 tonnes of carbon dioxide per year. Kezad expects this to reach four million tonnes per year within three years.

Among its tenant services, the zone recently installed a sustainable wastewater treatment site. According to Kezad, the cost of sewage water treatment on site has been reduced from $65,000 per year to nothing as a result. This is epitomised by the fact that around three-quarters of Kezad’s services are offered at no cost to its tenants. 

The zone has also developed several programmes to improve its services. Josoor, an online networking and e-commerce platform, helps connect businesses to help them collaborate and improve their supply chains and access to new markets. Through its Kezad Connect programme, the zone also organises regular meetings with its tenants to help improve its policies. 

EUROPE

Winner: Katowice Special Economic Zone, Poland

The commitment of KSEZ to sustainability is underlined by its multi-faceted approach. Any projects seeking to gain access to its tax incentives must meet stringent criteria for promoting sustainable economic development.  It also prioritises renewable energy investments. This aligns with the 2030 just transition plan of the Silesian Voivodeship region, in which KSEZ sits. 

The plan focuses on the region’s shift from its historically strong mining industry to more sustainable jobs. The zone excludes any investments in the coal sector from its support. KSEZ’s energy transition strategy is also shown by its transformation of several former mining areas, including the Jaworzno Industrial Area and Pole Warszowice project.

KSEZ has a clear, well thought-out strategy to promote environmental, social and governance standards. The zone’s rules and procedures aim to promote open communication between itself, tenants and the local population. KSEZ is committed to wider social benefits through social activities, support for local sports clubs and its evaluation of prospective investments. Projects are assessed by looking at criteria such as improving employee qualifications, medical care and co-operation with local schools.

Highly commended: Thames Freeport, UK

A clear net-zero strategy underpins Thames Freeport’s overarching strategy. The zone supports regional efforts to accelerate the transition to sustainable fuels. For example, the zone aims to develop an ecosystem that supports the use of hydrogen, which includes infrastructure for production, supply and end uses. The Port of Tilbury is also working with Germany’s RWE and Japan’s Mitsui to investigate the use of green hydrogen to decarbonise port operations.

A £350m investment to construct a fourth berth at London Gateway’s logistics hub has sustainability at its heart. The berth will be all-electric, including zero-emission straddle carriers to move and stack containers. Beyond its efforts to reduce emissions, Thames Freeport has put in place a structure to enhance its governance and transparency. Minutes of board meetings, which occur quarterly, are published on its website. 

AFRICA

Winner: The Atlantis Special Economic Zone for Green Technologies, South Africa

Given its aim to develop an eco-industrial park, sustainability runs through all of Atlantis SEZ’s activities. The zone is constructing a 22-hectare zone tailored towards factories aligned with green industrialisation in South Africa. Atlantis SEZ has a goal to reach net-zero water, waste and carbon by 2050. Several initiatives are in place to reach this target. 

The zone is pursuing 40% solar panel coverage on building roofs, which will be integrated with battery storage. Pilot projects for power sharing between tenants and modular wind turbines aim to boost energy efficiency and decentralised clean energy generation. 

Community and stakeholder engagement plays a major role in work by Atlantis SEZ. The zone’s integrated ecosystem services team has upskilled 700 local residents as part of efforts for the community to benefit from its plan to promote the just energy transition. Its ultimate aim with developing an eco-industrial park is to create a testbed for a future greentech cluster.

Highly commended: Lagos Free Zone, Nigeria

Despite its location in the oil-rich Nigeria, LFZ aims to reach net-zero emissions by 2030 by reducing and offsetting its carbon emissions. 

An initial step towards its decarbonisation is setting up a 12-megawatt gas-fired power plant by 2025 before developing a power distribution network. Once the network is up and running, LFZ plans to install rooftop solar panels to add to its 60kVA of operating solar.

For offsetting, the zone already maintains 200 hectares of natural forest and 22 hectares of manmade green cover. By 2030, the zone plans to conserve a total of 850 hectares of land for carbon sequestration, including 44 hectares within the zone. LFZ also aims to improve governance and transparency through its introduction of a business ethics policy and new internal processes such as active monitoring to ensure 100% compliance by 2030. 

ASIA-PACIFIC

Winner: The Nanning Area of Guangxi Pilot Free Trade Zone, China

The zone’s strategy to reach net-zero is based on three main pillars. Firstly, every single project in the Nanning Area has implemented green building standards in all stages from land allocation to project approval. Secondly, the zone makes full use of renewable energy such as solar and shallow geothermal energy. The Nanning area claims that renewable energy is fully applied and promoted across all of its tenants' projects.

Finally, the zone promotes ‘ecological economic development’ in every industry it promotes, including finance, logistics, digital economy and emerging manufacturing activities. The zone has been approved by the autonomous Guangxi region as a green finance and innovation pilot zone, leveraging its more than 500 financial institutions based in the China–Asean Financial City based within the Nanning area.

Highly commended: Sri City Special Economic Zone, India

Sri City SEZ has implemented a number of initiatives to progress towards net zero emissions. The zone is planning to add 20 megawatts (MW) of rooftop solar within the next four years, adding to the existing 6MW of renewables capacity. Sri City SEZ has also replaced old air conditioning units with newer machines that consume less power and shifted 20% of its water pumps to solar power. In the next three years, it aims for half of water pumps to make the same transition. 

The zone has committed to use sustainable building materials in all of its facilities and to promote the 15-minute city concept. Sri City is mixing housing within its manufacturing clusters to allow employees to walk or cycle to their workplace within 15 minutes, thereby reducing pollution from transportation.

AMERICAS

Winner: Coyol Free Zone

Commitment to sustainability underpins the entire development approach of Coyol Free Zone. Alongside constant efforts to increase its footprint of solar generation capacity, the zone is transforming its bus network to be powered by batteries and hydrogen. Since being founded in 2007, Coyol Free Zone has preserved 13% of its land for conservation with more than 100 trees added each year to its dedicated biological corridor.

Energy efficiency is another key focus. Coyol Free Zone has developed a sustainable management approach and uses construction materials to minimise energy usage and warming. This includes the use of insulated roofs and reflective windows to maximise natural light, the implementation of light pavements to reduce the heat island effect and systems for rainwater reuse.

Highly commended: ZPE Ceará Free Zone, Brazil

In line with its ambitions to be a hub for green energy production, ZPE Ceará has invested heavily to achieve its 2050 net-zero target and create the right environment for its target tenants. Alongside the launch of a green hydrogen project in 2023, the zone expanded its solar capacity by 20% compared to a year earlier. This has not only helped it to reduce its carbon footprint but to supply clean energy for industrial operations within the zone.

Waste management, recycling and energy efficiency are also embedded in this zone’s strategy. In 2023, ZPE Ceará’s recycling initiatives diverted 60% of industrial waste from landfills. Development of systems to boost energy efficiency, such as smart grids and advanced monitoring systems, have helped to reduce waste and consumption. Energy usage has fallen by 15% since this energy efficiency was implemented in 2022.

Download the PDF to explore this year’s winners 

Visit the online hub for the Global Free Zones of the Year 2024 awards

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This article first appeared in the October/November 2024 print edition of fDi Intelligence