Research on the Construction of Green Supply Chains in

Manufacturing Industries

Xinyue Xu

Business School, Shandong Normal University, Jinan, 250000, China

Keywords: Green Supply Chains, Dual Carbon Goals, Collaborative Optimization.

Abstract: The development of green supply chains in manufacturing is crucial for achieving China's "dual carbon" goals

(carbon peak and carbon neutrality). However, current efforts face systemic challenges including fragmented

optimization, insufficient coordination, and disappointing emission reduction outcomes. Despite active

promotion by both government and enterprises, supply chain carbon emissions have decreased by less than

10%, revealing fundamental issues such as inefficient resource allocation, uncoordinated technology adoption,

and poor data transparency. This study provides a comprehensive analysis of key obstacles in green supply

chain development from three perspectives: supply chain management, technological application, and policy

environment, while proposing integrated optimization strategies. This paper findings identify three major

bottlenecks: weak collaboration across supply chain tiers, inadequate digital infrastructure for carbon

accounting, and misaligned policy incentives with market realities. This paper propose an "Enterprise-

Technology-Policy" tripartite framework to address these challenges. Key recommendations include:

establishing industry consortiums and standardized carbon accounting protocols, refining policy incentives to

target critical weak points, and fostering industry-academia collaboration for talent development.

1 INTRODUCTION

In the context of global climate action and China's

dual carbon objectives, building green supply chains

has emerged as a strategic pathway for low-carbon

industrial transformation. Worldwide, governments

and corporations are actively implementing Green

Supply Chain Management (GSCM) through policy

interventions, technological innovation, and industry

coordination.

China, as the world's manufacturing hub, has

introduced a series of policies to advance

environmentally sustainable supply chain systems.

Academic research has developed multidimensional

frameworks examining drivers of green supply chains

(Zhu, 2022), digital enablement (Zhang, 2024), and

policy mechanisms (Chen and Li, 2023).

However, implementation faces significant

coordination challenges. While leading firms actively

pursue green transformation, participation from

SMEs remains limited, carbon data sharing is

inadequate, and policy execution is inconsistent. The

China Manufacturing Green Development Annual

Report (2025) indicates that although 70% of

manufacturers have adopted green supply chain

systems, overall supply chain emissions have

declined by less than 10%, exposing limitations of

current fragmented approaches(Wang,2023).

The EU's Carbon Border Adjustment Mechanism

has introduced stringent carbon disclosure

requirements for global supply chains. IEA estimates

suggest 25% of China's manufactured exports will be

directly impacted by such environmental trade

measures.

From a collaborative governance perspective

(Ansell and Gash, 2018), green supply chain

development represents a complex multi-stakeholder

challenge. Research shows that when supply chain

trust levels fall below 0.6, collaborative emission

reduction efficiency drops by over 40% (Li, 2023).

This study investigates three critical dimensions.

Current green supply chains exhibit structural

fragmentation between proactive large enterprises

and reluctant SMEs. Technological limitations:

Despite blockchain applications, carbon data remains

siloed across incompatible platforms; Policy gaps:

Existing incentives disproportionately focus on

production while neglecting logistics and recycling,

resulting in sub-40% implementation rates among

SMEs. By integrating supply chain theory, digital

328

Xu, X.

Research on the Construction of Green Supply Chains in Manufacturing Industries.

DOI: 10.5220/0014353700004718

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd International Conference on Engineering Management, Information Technology and Intelligence (EMITI 2025), pages 328-332

ISBN: 978-989-758-792-4

technology, and policy analysis, we develop an

integrated framework to overcome systemic barriers

in low-carbon transition.

2 CURRENT CHALLENGES

ANALYSIS

The development of green supply chains in

manufacturing faces multidimensional systemic

constraints.

Existing studies overemphasize single-enterprise

technical solutions while neglecting supply chain-

wide coordination mechanisms, creating a theory-

practice divide.

Technological Barriers: Blockchain applications

encounter three key obstacles: 1) Prohibitive data

upload costs (~$120/10,000 data entries) 2) Poor

system interoperability (<30% compatibility) 3)

Excessive energy demand (~1,500 kWh per carbon

audit) The absence of effective digital tools prevents

comprehensive carbon footprint tracking across

supply chains. Current incentives primarily target

production phases while overlooking logistics and

recycling, imposing disproportionate compliance

burdens on SMEs and maintaining sub-40% policy

adoption rates.

Cross-national comparisons reveal that

Germany's manufacturing sector has increased

compliance rates among secondary suppliers to 75%

through its "Supply Chain Due Diligence Act"

(BMWi, 2024), while Toyota in Japan achieves a 58%

carbon data sharing rate among its suppliers (Toyota

Sustainability Report, 2025) - both significantly

higher than China's average levels. Industry practices

demonstrate a notable gap between policy standards

and actual implementation outcomes. Although

China has established multiple green supply chain

management standards at the national level, excessive

environmental compliance costs for SMEs have

resulted in approximately 60% of environmental

violations occurring among secondary and lower-tier

suppliers in the electronics manufacturing sector.

Moreover, green development levels vary

drastically across different supply chain tiers. While

first-tier suppliers boast over 80% green certification

rates, environmental violations remain prevalent

among lower-tier suppliers, exposing fundamental

flaws in current supply chain coordination

mechanisms. Additionally, the talent cultivation

system fails to meet industry needs, with significant

discrepancies between the knowledge structures of

university-educated green-skilled professionals and

actual enterprise requirements. This mismatch further

hinders effective implementation and widespread

adoption of green technologies in industrial

applications.

The analysis above reveals three prominent

structural contradictions in current green supply chain

development.

First, a severe input-output imbalance exists.

While core enterprises continue increasing

environmental investments, SMEs' green

transformation lags significantly, creating a "green

divide." For instance, an automotive parts

manufacturer spends approximately 1.2 million yuan

annually to meet environmental standards but

receives less than 300,000 yuan in government

subsidies. This disproportionate cost-benefit ratio

directly undermines sustainable development

incentives.

Second, digital technology applications for

carbon tracking face coordination challenges. Despite

blockchain adoption rates exceeding 50% in supply

chain carbon management, the lack of unified data

standards results in substantial carbon accounting

errors averaging 35%, severely compromising

accuracy and reliability.

Third, ineffective data sharing mechanisms

persist across supply chains. While core enterprises

control over 90% of carbon-related data,

interoperability rates among upstream and

downstream partners remain low. This data monopoly

obstructs comprehensive lifecycle carbon monitoring

and ultimately impedes supply chain greening.

3 KEY OBSTACLES IN

MANUFACTURING GREEN

SUPPLY CHAIN

DEVELOPMENT

The fundamental contradiction stems from systemic

coordination failures compounded by localized

optimization inefficiencies. A three-dimensional

analysis (supply chain management, technology

application, and policy environment) reveals deeper

issues.

3.1 Fragmented Greening Due to Lack

of Supply Chain Coordination

Mechanisms

Current supply chains exhibit a "core enterprise-

dominant, SME-lagging" dual structure. While first-

tier suppliers achieve 82% green certification rates,

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329

environmental violation rates among lower-tier

suppliers remain as high as 38% (Greenpeace, 2025).

3.1.1 Imbalanced Cost Transfer

Core enterprises frequently shift emission reduction

responsibilities upstream through contractual terms

without providing commensurate financial or

technical support. An automotive parts

manufacturer's case shows 1.2 million yuan in annual

environmental compliance costs but only 300,000

yuan in subsidies, bearing 75% of decarbonization

costs. This creates an SME dilemma: rejecting

requirements risks losing orders while acceptance

erodes profits. Limited financing channels further

force SMEs to sacrifice R&D and operational funds

for compliance, creating a "compliance equals losses"

cycle. Solutions require cost-sharing mechanisms like

corporate environmental escrow accounts and

increased government subsidies.

3.1.2 Inequitable Benefit Distribution

Green supply chain value-added benefits (e.g., brand

premiums, market share growth) are

disproportionately allocated. Core enterprises capture

15%-20% of green premiums through pricing power

and branding, while upstream SMEs struggle to

recoup investments. A textile supplier's wastewater

treatment system requires 3.5 years for ROI versus

the industry's 2-year standard. Remedy options

include green premium profit-sharing based on

environmental investments or supply chain financing

tools to accelerate SME returns.

3.1.3 Standard Implementation Gaps

Green standard enforcement deteriorates across

supply chain tiers. Secondary suppliers achieve only

60% compliance due to limited testing equipment and

technical staff. An electronics case shows an

ISO14001-certified PCB manufacturer's overall

green rating dropped 30% because its coating supplier

lacked heavy metal detection capabilities. This

"strict-upfront, lax-downstream" pattern causes

substantive green supply chain fractures and may

trigger "race-to-the-bottom" effects. Solutions

involve core enterprises implementing technical

assistance programs (shared testing platforms,

engineer dispatches) and establishing tiered

compliance timelines for SMEs (ISO,2024).

3.2 Insufficient Digital Technology

Application Undermines Carbon

Credibility

3.2.1 Contradiction Between Technology

Adoption and Coordination Failure

Although blockchain and other digital technologies

have achieved a 53% adoption rate in carbon

tracking(China Federation of Logistics and

Purchasing, 2025), data fragmentation across supply

chain segments prevents comprehensive carbon

emission monitoring. This contradiction manifests in

three dimensions.

First, inconsistent accounting standards cause

data inaccuracies. Enterprises adopt different

frameworks (GHG Protocol, 2023), resulting in up to

35% variance in Scope 3 emissions calculations②.

For instance, in a photovoltaic supply chain, silicon

material suppliers using PAS 2050 standards and cell

manufacturers applying ISO 14067 caused 28%

statistical overlap in final assembly's carbon footprint

aggregation.

Second, data monopolies exacerbate information

asymmetry. While core enterprises control 90% of

critical carbon data (e.g., raw material transportation,

processing energy consumption), less than 12% is

shared with suppliers(China Federation of Logistics

and Purchasing, 2025), preventing downstream firms

from obtaining complete data for product carbon

labeling.

Most critically, technology costs create new

barriers. SMEs require annual investments of 500,000

CNY(Zhang, 2024) (8%-10% of net profits) for

carbon management systems, forcing many to rely on

manual reporting. Resolving this requires a tripartite

"standardization-sharing-cost reduction" solution:

mandatory industry carbon data interoperability

protocols, tiered data interface requirements for core

enterprises, and SaaS models to lower SME

digitalization thresholds.

3.3 Dual Constraints of Policy

Incentives and Talent Supply

Green supply chain development faces twin

constraints of inadequate policy support and talent

shortages, severely impeding progress. Policy gaps

are particularly acute for SMEs. While SME green

standard compliance is only 39%(Ministry of

Education, 2025), fewer than 15% qualify for

specialized tax incentives, undermining

transformation motivation. Crucially, weak end-

market demand—with consumers willing to pay just

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7%-9% premiums for green products(Greenpeace,

2025).—fails to create sustainable business models.

This "government enthusiasm vs. market

indifference" dilemma stalls progress.

Concurrently, structural talent shortages worsen.

Effective green supply chain operations require

combined expertise in environmental management,

digital technology, and supply chain optimization.

Yet SMEs average under 4 hours of annual green

training per employee versus the 40-hour industry

standard. This capability gap hinders carbon footprint

tracking and circular logistics implementation.

Blockchain traceability and carbon accounting face

acute specialist shortages.

Solutions require coordinated policy-talent

mechanisms: market-driven incentives linking

subsidies to emission reductions, coupled with

consumer education to cultivate green markets.

Simultaneously, industry-academia partnerships

should develop modular training programs

emphasizing digital-environmental cross-

competencies. Only synergistic policy-leverage and

talent development can provide sustainable

momentum.

4 RECOMMENDATIONS

To address these multidimensional challenges, we

propose systematic improvements.

First, establish green supply chain symbiosis

ecosystems. Industry leaders should initiate green

alliances, sharing carbon management SaaS

platforms to enable technology diffusion. Implement

equitable cost-sharing (suggested 1:0.7 ratio between

core enterprises and SMEs) to reduce SME burdens

and incentivize participation.

Second, create unified carbon data governance.

Government-led "Unified Supply Chain Carbon

Accounting Standards" and industry carbon data

banks are essential. Legislate minimum 40% data

disclosure requirements for core enterprises to

dismantle silos and enable full-chain emission

visibility.

For digital transformation, adopt a phased

approach.

Short-term (1-2 years): Build foundational data

infrastructure for direct and energy-related indirect

emissions. Standardize collection formats and

reporting protocols to ensure comparability and

traceability, complemented by data quality audits.

Medium-term (3-5 years): Develop AI-powered

smart accounting systems integrating IoT monitoring

and big data analytics to reduce calculation errors

below 15%. Prioritize lightweight solutions for SME

accessibility.

Long-term (5+ years): Enable international

carbon market integration through cross-border

carbon credit infrastructure, supported by financial

services for carbon asset management.

Policy enhancements should increase

logistics/recycling subsidies to 30% of total budgets

under MOF's Revised Green Manufacturing Fund

Management. Launch dedicated 5-billion-CNY

annual SME green transition funds to alleviate

financial pressures

Finally, deepening the reform of industry-

education integration in talent cultivation is

imperative. It is recommended to incorporate cross-

disciplinary courses on green supply chain

management into the "Emerging Engineering

Education" initiative in universities, making cutting-

edge technologies such as blockchain and carbon

accounting mandatory components. Drawing

inspiration from Germany's dual education system,

leading enterprises should collaborate with academic

institutions to establish practical training bases,

cultivating interdisciplinary professionals proficient

in both environmental technologies and supply chain

management. Through industry-academia

collaborative education mechanisms, we can

fundamentally address the current shortage of green-

skilled talent.

5 CONCLUSION

This study systematically reveals the core

contradictions in building green supply chains in

manufacturing: despite progress in individual

enterprises' green transformation under the "dual

carbon" goals, insufficient systemic coordination

across supply chains has resulted in suboptimal

overall emission reduction outcomes. Through a

three-dimensional analysis of supply chain

management, technological application, and policy

environment, the study identifies four key obstacles:

(1) fragmented greening due to lack of supply chain

coordination mechanisms, (2) compromised carbon

credibility from inadequate digital technology

adoption, (3) structural misalignment between policy

incentives and market demand, and (4) severe

disconnection between talent cultivation and industry

needs. These findings provide new theoretical

perspectives for understanding the deep-seated

challenges in manufacturing's green transition.

The academic and practical significance of this

study manifests in three aspects. Theoretically, it

Research on the Construction of Green Supply Chains in Manufacturing Industries

331

constructs an "enterprise-technology-policy"

collaborative framework, overcoming the limitations

of existing research focused on isolated optimizations.

Practically, proposed solutions—such as

establishing green symbiosis ecosystems and carbon

data banks—offer actionable approaches to address

industry pain points. olicy-wise, recommendations on

subsidy optimization and talent development provide

valuable references for governmental support policies.

Looking ahead, green supply chain development

will exhibit three core trends.

Deep integration of digital technologies will

enable real-time, precise carbon accounting,

significantly enhancing full-chain transparency.

Policy systems will evolve toward full lifecycle

coverage, with strengthened support for SMEs and

recycling processes.

Innovative industry collaboration models will

emerge through technology sharing and balanced

benefit mechanisms to achieve holistic green

development.

Realizing this transformation requires a

synergistic system integrating technological

application, institutional innovation, and talent

cultivation, advancing green supply chains from

fragmented breakthroughs to systemic optimization.

The key to future development lies in establishing a

sustainable ecosystem that balances efficiency and

equity.

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