Abstract:  This article develops the concept of coercive industrial zone (CIZ) to analyze how Europe’s electric vehicle transition is propelled by legal and territorial carve-outs that fast-track investment while suspending democratic, labor, and environmental safeguards. Drawing on evidence from Serbia and Hungary, it shows how exemption logics, territorial sacrifice, and coercive practices underpin the EU’s green industrial rollout. In Serbia, the Jadar lithium project illustrates how extractive frontiers are reorganized through exceptional rules, ecological degradation, and repression of protest, with EU partnerships re-legitimizing the contested project under the Critical Raw Materials Act. In Hungary, Korean and Chinese gigafactories have advanced through national designations of “strategic investments” and special economic zones, stripping municipalities of fiscal autonomy, normalizing environmental and labor rights violations, and silencing dissent. Unlike classic authoritarian developmentalism, these zones are decoupled from a clear, long-term industrial upgrading project. CIZs emerge from a transnational interest constellation in which the EU’s urgent push for clean-tech capacity, transnational firms’ preference for de-risked investment environments, and semi-peripheral regimes’ pursuit of geopolitical relevance temporarily align. Despite high domestic costs, this strategy remains attractive as it anchors regimes in geopolitically charged clean-tech value chains and enhances external leverage.

Keywords:  decarbonization; European Union; green industrial policy; special economic zones

Published:   4 March 2026

Issue:   Vol 14 (2026): Doing Industrial Policy in a Geotech World: Challenges and Opportunities (In Progress)