Scaling

the

Industrial

Transition:Hard-to-AbateSectorsand

Net-Zero

Progress

in2025W

H

IT

E

PA

P

E

RD

E

C

E

M

B

E

R

2

0

25WJR

LDE

CCNOMI

CF

ORUMIncollaboration

withAccentureImages:AdobeStock,UnsplashContentsForeword

3Executivesummary

41

Trendsand

progress

in

industrialtransformation51.1Theyear

in

review

61.2Stateofplay

ofthe

industrialtransition91.3Industrialtransitiondynamics

in

2025112

Enablingsystemsfor

industrialtransformation132.1Technology

landscape

isadvancing

but

uneven142.2Low-carbondemandis

growing

too

slowly152.3Policy

isfragmenting

172.4Infrastructure

isexpanding

butstrained192.5Capitalflowsare

resilient

butunevenly

distributed20Strategic

priorities

23Appendix24Contributors27Endnotes

29DisclaimerThisdocumentis

published

bytheWorld

Economic

Forumasacontributionto

a

project,

insight

area

or

interaction.Thefindings,interpretationsandconclusionsexpressedherein

are

a

resultofacollaborativeprocessfacilitated

andendorsedbytheWorld

Economic

Forumbutwhoseresultsdo

not

necessarilyrepresenttheviewsoftheWorld

EconomicForum,nor

the

entirety

of

its

Members,Partnersorother

stakeholders.?2025World

Economic

Forum.All

rightsreserved.

No

part

of

this

publication

maybereproducedortransmitted

in

anyformorbyany

means,

including

photocopyingandrecording,or

by

any

informationstorage

and

retrieval

system.Scaling

the

Industrial

Transition:Hard-to-Abate

Sectors

and

Net-Zero

Progress

in

20252The

industrialtransition

hasentereditsdecisive

period.Acrosshard-to-abatesectors,thetechnologiesrequiredtocutemissionsare

proven.About

half

ofindustrialemissionscan

already

be

abatedwith

maturesolutions;the

restwilldepend

ondeeper

innovation,stronger

policyandenablinginfrastructure.Thetaskahead

is

rapidlyscalingsolutionsgloballyand

profitably,ensuringthe

path

to

netzerostrengthens

industrialcompetitiveness

andeconomicgrowth.ScalingtheIndustrialTransition:Hard-to-AbateSectorsandNet-ZeroProgressin2025,developed

bytheWorld

Economic

Forum

incollaborationwithAccenture,capturesthis

pivotal

moment.

Buildingonthe

Net-Zero

IndustryTrackerframework,

itassesses

progressacross

eightsectorsthattogetheraccountfor

nearly40%ofglobalgreenhouse

gas

emissions.Thisyear’sanalysis

marksa

momentofadjustment

andacceleration:

progress

is

real

but

uneven.The

next

phasewill

hinge

lesson

breakthroughsandmoreondeploying

provensolutionsthat

deliver

security,competitivenessandsustainability.Cleantechnologiesareadvancing,

butdeployment

isconstrained

by

highcosts,

policyfragmentation

and

infrastructuregaps.Thefocus

isshiftingfrom“Canwe?”to“Canwedeployatcostand

at

scale?”

under

tighteningeconomic,

policyandenergyconstraints.Climatepolicy

is

movingfromvoluntaryambitiontoenforced

accountability,

but

unevenlyacross

regions,complicatingtradeand

investment.Artificialintelligence

(AI)anddigitalizationare

projectedtodrivenearly

10%ofglobalelectricity

growth

by2030,forcingindustriestosecurelow-carbon

power.

Meanwhile,supplychainconcentrationin

criticalmineralshasbecomea

key

areatopic

of

discussion.Fourtrendscharacterizethis

next

phase:1

Economicviability:Technologiesareavailable,

butscaledepends

on

costcompetitiveness,financing

modelsand

risk

sharing.A5%

rise

in

interest

ratescan

raisewindandsolarcosts

by

about

30%.2

Integration:Synchronizedinvestmentin

grids,

carbondioxideand

hydrogen

infrastructure,portsand

industrialclusters

isessential.Gridspending,about$400

billion

annually

today,

may

riseto$483

billion

by2030,yet

BloombergNEF(BNEF)estimates$811

billion

peryearwill

be

requiredfor

netzero.3

Accountability:Verifiedcarbon

intensity

is

becomingcentralto

licensing,financingand

trade.The

EU’sCarbon

BorderAdjustment

(CBAM)andexpanding

EmissionsTradingSystem

(ETS)frameworkswillcoverover45%ofregional

industrialemissions

by

2030.4

Innovation:Progressdepends

onloweringthecostofcapital,

building

shared

infrastructureandaligningglobal

standards.

Fewerthan

10%ofhydrogen

projects

andunder

halfofcarboncapture,

utilizationand

storage

(CCUS)

projects

have

reachedfinal

investmentdecision

(FID).The

main

barrier

is

nottechnology,

buta

lackofclear

policy

and

reliabledemand.Thetransitionisenteringamore

complexphasemarkedbyregionaldivergence

and

systeminterdependence.Successwilldependonhoweffectivelymarkets,governmentsandindustriesalignacrossdemand,policy,infrastructureandcapital

tomakeproventechnologiesinvestableat

scale.Thispapercallsforcollectiveactiontoscalewhat

workstoday,de-riskthenextwaveofinnovation

anddelivercompetitive,cleanindustrialsystems.Scalingthe

IndustrialTransition:Hard-to-AbateSectorsandNet-ZeroProgress

in

2025ForewordRoberto

BoccaHead,Centre

for

Energyand

Materials;

Memberofthe

ExecutiveCommittee,World

Economic

ForumDavid

RableyManaging

Director;Global

EnergyTransition

Lead,AccentureScaling

the

Industrial

Transition:Hard-to-Abate

Sectors

and

Net-Zero

Progress

in

20253December2025Severalstructural

lessonsemerge.Policyfragmentationisreshapingmarkets:

Regionsare

movingtowardscomplianceandaccountability,

butthroughdivergentmixesofincentives,

carbon

pricing

anddisclosureframeworks.Economic

viability

defines

scale:Rising

financingcosts,combinedwithweakdemandforlow-carbon

solutions,constrain

investment.Competitivenessdependson

reducingemissionswhile

maintaining

costadvantagethrough

bankable

projects,predictableofftakesandcredible

policyframeworks.Integrationforscalewilldeterminesuccess:The

next

phasedependsonaligningtechnology,infrastructure,

policyandcapitalso

provensolutions

canscale

profitablyand

predictably–connectingpowergrids,CO2

transportandstorage

networks,

hydrogencorridorsandintegrated

industrialclusters.

Lookingahead,several

priorityactionsstand

out.–Createdemandcertaintythroughstandardized

green-materialcontracts,

public

procurementand

buyers’alliances.–Build

shared

infrastructure–

integratedpower,

hydrogenandCO2

transportand

storagenetworks–that

reducescostsanddrivescross-sector

scaling.–Lower

the

cost

of

capital

via

blended

finance,

carboncontractsfordifferenceand

risk-sharing

tools,

particularly

inemerging

markets.–

Scalemarket-readysolutionswhilenurturinginnovation–fast-trackelectrification,

efficiencyandstorage;support

hydrogenandCCUSwhereviableand

enhance

energy

securityand

growth.–

Balancetop-downframeworkswithbottom-

up

innovationbyaligningstable

policy

direction

withflexible,

locallydriven

businesssolutions.The

messagefrom2025

isclear:

industrialtransformation

isadvancing,

but

progress

remains

incomplete.The

nextfrontier

requiresgovernments

and

industriestoworkintandemsothat

low-carbontechnologies

become

investable,scalable,

inclusiveandglobally

competitive.This

pastyearwasadefining

momentfortheindustrialtransition–defined

bythe

realitiesofscalingamidtighteningeconomicsand

risingenergydemand.Acrosshard-to-abatesectors–

aviation,shipping,trucking,steel,cement,aluminium,

primarychemicals,andoil

andgas–technologiestocutemissions

exist,

butscaling

nowdependson

bankability,

profitability,

infrastructureandexecution

ratherthan

invention.Thisyear’seditionfindsthatconfidenceintechnology

remains

high,

but

progress

isconstrained

byenablingsystems.

Roughly

halfofindustrialemissionscan

be

abatedwith

mature

solutions;theother

halfdependson

deeperinnovation,stronger

policysupport,

plusenabling

infrastructure.

Hydrogenandcarboncapture,utilizationandstorage

(CCUS)

remain

inearlystages,

progressingthrough

pilots,

butfewerthan

1

in

10

projects

reachthefinal

investmentdecision.The

primaryconstraint

hasshiftedfrom

technicalfeasibilitytoeconomicandoperationalviability.

Energycosts,

policyfragmentationandinfrastructuregaps

nowdeterminewhatcan

scale.Reaching

net-zeroacrossthesesectorswill

require

around$30trillion

inadditional

investment,57%fromthe

broaderecosystem–grids,ports,

carbon

dioxide

(CO2)and

hydrogen

infrastructure–and43%from

industry

itself.While

Europetightenscompliance,the

US–traditionally

incentive-led–facesgrowing

uncertaintyfollowingthe

rollbackof

severalclean-energy

measures,

including

renewable

andelectricvehicletaxcredits.Thisfragmentation

is

redefining

industrialcompetitiveness–

markets

now

operate

underdifferentenvironmentalstandards,andcostsand

incentives

rarelyalign.The

result

is

a

multi-speedtransition.Cleanenergy

investment

will

reach$2.2trillion

in2025–twicethat

offossil

investment–

but90%ofthiscapitalsince

2021

has

gonetoadvancedeconomiesand

China

aswell

as

proventechnologies,

leavingemerging

marketsand

early-stagesolutions

underfunded.Executivesummary2025

marksadefining

momentforindustry–wherecompetitivenessand

productivity,

nottechnologyalone,

definesustainabletransformation.Scaling

the

Industrial

Transition:Hard-to-Abate

Sectors

and

Net-Zero

Progress

in

20254KeytakeawaysPolicyfragmentationisrede?ningcompetitivenessTrends

and

progress

inindustrial

transformationFragmented

policiesandtradeare

reshapingindustrialtransition–

progress

is

real,

butscaling

nowdependsoneconomics

and

execution.IntegrationisthenextfrontierScaling

requires

moving

beyondone-offlow-carbon

projectstowards

integratedportfolios,supportedby

aligned

innovation,

infrastructureand?nance.Technologyisadvancing,butviabilitysetsthepaceRoughly50%ofindustrialemissions

can

already

be

abated

with

maturetechnologies,yetscalingnowdepends

onbankability,demandcertaintyand?nancialfeasibility.Cleantechnologydeployment

is

progressing–for

instance,

globalelectricity

use

in

industrygrew

byalmost4%

in20241

–yet

overalldelivery

isconstrained

by

input

prices,

infrastructuregapsand

unevendemandgrowth.Divergent

regionalframeworksandcarbonstandards

aredrivingasymmetries

intradeand

investment,creating

uneven

playing?eldsacross

markets.Realmomentum,

butprogressunder

pressureScaling

the

Industrial

Transition:Hard-to-Abate

Sectors

and

Net-Zero

Progress

in

202551

2025

update

Progress

is

uneven;corporateambitioncontinues

torise,yetregionalpolicy

momentum

is

diverging

(EU,

Middle

East,

India

positive;

US

rollback);companiesshiftingtowardscommerciallydriven

decarbonizationstrategiesRateseasedslightly,

but

bottlenecksshiftedto

projecteconomics/bankabilitywithexchange-

ratevolatility

raisingcosts

inemerging

marketsNowcentral,with

newtariffs

and

policyuncertaintyaffectingsupply

chains,

raising

costsand

refocusingon

self-relianceDeployment

remains

uneven:

maturetechnologies

(renewables,electrificationandstorage)arescaling

rapidly,

while

hydrogen

progress

remainssubduedamidcost

pressures

anddemand

uncertaintyNowfullyoperational,

driving

a

surge

inelectricitydemandand

a

race

for

greenelectronsandgrid

access,while

also

openingnewopportunitiestooptimise

energy

assets

and

systemselectrificationsignals

progress

butalso

intensifies

pressureongrids,supplychains

and

power

costs.Meanwhile,carbondioxide(CO2)emissions

rose0.9%to38.2gigatonnes(Gt)of

CO2

in2024arecordhigh(Figure

1).

Emissionstrendsvarysharply

bysector,withrecentdeclinesin

cement

and

steel,

whileaviation,aluminiumandprimarychemicalsshownotableincreases.Under

current

policies,emissionsareprojectedtoremain

near

38

Gtthrough2035,showingnosustaineddecline.Stated

policypledgescouldmodestlycutemissionsabout

1%peryearto2050butonlythe

NetZeroby

2050

Scenario,asoutlinedbythe

International

EnergyAgency(IEA),deliversastructuraltransformation,requiringanearly7%annual

drop

in

global

emissions

thisdecade

(Figure2).5

Thisdivergenceunderscores

thatreducingemissionsin

hard-to-abatesectorsremainsthedefiningchallengeofthedecade.

Heavy

industries,suchassteel,cement,aluminium,oilandgas,andtrucking,remaincentralto

industrialvaluechainsandaccountforadominantshare

ofglobalemissions(nearly40%),exposingthedelicate

balancebetweenenergysecurity,affordability,andclimateambition.Together,theseshifts

mark2025as

a

year

of

transition

undertension.Thefoundationsforreducingemissions

in

heavy

industryexist,

but

are

increasinglyshaped

by

regionalasymmetry

andtechnologicaldisruption.Newgrowthenginesarereshapingenergydemand.Thesurgeofelectrification(+4.3%

in2024),2

automationandartificial

intelligence

(AI)hascreated

new

industrial

loadsandalteredthegeographyofenergy

use.

In2024,global

energydemand

rose2.2%,wellabovethe

decade

saverage,withAIanddatacentres

alone

projected

todrive

nearly

10%ofglobal

powerdemand

growth

by2030.3

Theseconcentratedand

inflexible

loads

are

redefining

howgridsare

planned,financedand

operatedtesting

resilience,

reliabilityandcostefficiency

in

realtime.Industryaloneaccountedfor

nearly40%

ofglobal

electricitydemandgrowth

in2024.

Industrialelectricity

use

rose

nearly4%a

markedaccelerationfrom2023,driven

byexpansion

inelectro-intensive

manufacturingand

broader

industrial

recovery.4

Thissurge

in

industrialNet

zeroEconomic/capitalTariffs

andtrade

policyGreentechnologyAI–energy

nexus2024snapshotStrong

policy

momentumandexpandingcorporate

net-zeropledges;some

efficiency

andemissions

improvements,though

progress

remains

insufficientHigh

interest

rates

madecapital

availabilitya

binding

constraintLimited

policyattention;marginalto

analyseStrong

policysupportforemergingsolutions

such

ashydrogen,

biofuelsand

CCUS;

early

pilotsshowing

promise1.1TABLE

1TopicInaworldof

rising

demand,

shiftingtradepatternsanddigitalandtechnological

disruption,

thecentralquestion

is

how

industrycan

remaincompetitivewhileacceleratingtheenergytransition.Can

industrialsystemssustaingrowth

andefficiencywhilecuttingemissions,

adaptingto

newenergydynamics,and

maintainingsecurityandcohesion

inan

increasinglyfragmented

global

landscape?Table

1summarizes

how

keydynamics

haveevolvedsince2024highlightingwhere

progress

hasstalled,

momentum

hasshiftedand

newconstraints

haveemerged.Note:Arrow

indicates

the

overall

trend

in

momentum

since

2024.Source:World

Economic

Forum.The

year

in

reviewScaling

the

Industrial

Transition:Hard-to-Abate

Sectors

and

Net-Zero

Progress

in

20256Strategicrelevance

2025in

review–what

has

changed?Nascenttechnologywith

speculative

benefits個(gè)個(gè)-0.9%-2.2%10.1%0.0%+2.7%-5.3%+9.7%-3.8%403530

2520YoYchange*AviationShippingTruckingSteelAluminium**CementPrimarychemicalsOilandgas***FIGURE2World

CO2

emissions

projection

in

Gt

CO2e,

2024–205045*Year-on-year(YoY)change

represents2024vs.2023

(except

for

oil

and

gas

which

is

2022

vs

2021);**Aluminium

and

primary

chemicals

2024

data

based

onAccenture

analysis;***Oil

and

gas

data

for2018–2022

since

data

onwards

2023

not

available;oil

and

gas

refers

to

Scope

1and2

emissions.Source:World

Economic

Forum.+6.4%+2.7%+0.6%-0.4%

+4.1%-3.5%

+2.3%-6.4%CO2

emissions

in

hard-to-abate

sectors

in

Gt

CO2

equivalent

(CO2e),

2019vs.

2024201020242035204020500.01.0

2.03.04.05.06.0Scaling

the

Industrial

Transition:Hard-to-Abate

Sectors

and

Net-Zero

Progress

in

20257Source:

International

Energy

Agency(IEA);World

Economic

Forum.●2019●2024●NetZero

Emissions

by2050●

Current

PoliciesScenario●Stated

PoliciesScenarioGt

CO2eFIGURE1015105shipping,trucking,steel,cement,aluminium,

primarychemicals,andoil

and

gas–

the

NZIT

benchmarksactualsystem

performanceand

readinesstotransform.System

performance

isassessedthroughindicatorssuchas

industryoutput,operational

process

intensity,energy

mix,andvaluechain

emissionsandoffsets,

providinga

clearview

ofactualsectoral

progress.

Readiness

isassessedacrossfiveenablers:technology,

demand,

policy,

infrastructureandcapital.Thesedimensions

highlightwherestructuralconditionsare

in

place–andwheregaps

remain

–

toaccelerate

industrialtransformation.Eacheditionalternates

between

acomprehensivequantitativeassessment(2024edition)andafocused

update

(this

edition),

ensuringcontinuityofinsightswhile

balancingdepthwithefficiency.The

NZIT

integratesglobal

net-zero

pathwaysfrom

key

international

andsectoral

bodiesand

industry

roadmaps,comparing

business-as-usualtrajectorieswith

net-zero-aligned

pathwaysto

revealthescale

ofaction

required.Bycombiningannual

pulsechecks

withperiodicdeepdives,the

NZIT

helps

decision-

makers

prioritize

interventions,tracksectoral

progress,andacceleratethetransitionofthe

hard-to-abatesectors.ScalingtheIndustrialTransition:Hard-to-Abate

SectorsandNet-ZeroProgressin2025marks

a

new

phase

intheevolutionofthe

Net-Zero

IndustryTracker

(NZIT)focusingonaqualitativeassessmentofprogress,

readiness

andsystemalignmentacrosstheworld’s

most

emission-intensivesectors.

Itfocusesontwo

corequestions:1How

fast

are

sectors

progressing

today?2

Whatconditionsmust

bestrengthened

toacceleratetheirtransformation?Thisyear’seditiontakesadifferentform.Ratherthanservingasa

data

tracker,

which

willbe

madeavailableonline,the2025

white

papersynthesizesthe

mainsystem-level

barriersandenablersshaping

industrialtransition.

It

buildsonthe

NZIT’sanalyticalframeworkbutfocuseson

interpretation,

readinessandscalingdynamics.

Thequantitativedashboardsandsectordatawill

be

releasedseparately,providingdata-driven

snapshotsandindicatorsthatcomplementthis

narrativeassessment.Launched

bytheWorld

Economic

Forumin2022,the

NZITprovides

a

fact-basedframeworktoassessthedecarbonizationprogressofhard-to-abate

industriesagainst

net-zerotargetsfor2030and2050.

Covering

eightemission-intensivesectors–aviation,growthhasslowedto

11%

in2024,

down

fromthe24–29%expansionof

previousyears.9

Volatile

interest

rates,fiscaltighteningand

riskaversion–particularly

inemergingeconomies–

have

madecleancapital

moreexpensive,withexchange-rate

volatilityfurther

raisingfinancingcostsanddeterring

foreign

investment.Overlaying

all

of

this

is

a

new

geography

ofenergyandtrade.Tariffs,regionalcarbonpricesand

exportcontrolsareredrawingtradeandtechnologyroutes,reshapingcoststructuresandsupplychains,

andcreatingamoreregionalized

energy

landscape.

Demandforkeymineralssurged

in2024–

lithium

up

nearly30%,nickel,cobalt,graphiteand

rare

earthsrising6–8%year-on-year(YoY),10

andbattery

demand

up25%,drivenby

electrification.11

Yetsupply

remains

highlyconcentrated:Chinacontrolsaround70%ofglobalearthproductionandprocesses

almost90%oftheworld’srareearthelements,12

intensifying

competitionforaccessandcreatingpressureonotherregionstosecurealternativesuppliersanddiversifysourcing.Asglobalsupplychainsreorganize

aroundresilienceratherthanefficiency,affordability

andsecurityareincreasinglyseenas

prerequisitesforsustainability,nottrade-offs.Thetransitionwill

advanceonlyasfastasaccesstotheseessential

materialsallow,becausecriticalminerals

underpin

manylow-carbontechnologies.Technology

progress

is

real,

but

scalingremains

constrained

by

system

readiness.Energysourcesarediversifying,but

investmentandpolicyclaritycontinuetolag.

Renewables

and

nucleararecompetingtoanchorsupplyforboth

industrialanddigitaldemand,yetcoststructures,

permittingtimelinesandinfrastructurebottlenecks

remainconstraints.Sustainableaviationfuel(SAF)isadvancingfrompilotsto

early

scale:

global

outputisexpectedtoroughlydoubleto

about

2milliontonnes(MT)in2025(approximately

0.7%

of

jet

fuel)6

–a

step

up

that

is

still

far

short

of

needs.Asia

isaddingcapacityfasterthanlocaldemand,likelyexportingsurplusandeasingpricesatthe

margin.The

EU’s

ReFuelEUmandates(2%SAF

in

2025,rampingsteeplythereafterto70%by

2050)7

are

set

tostrengthendemandsignalsandaccelerateuptake.Yetthetransitionisadvancingunderfinancial

andstructuralstrain.

Energyprices

haveeased

fromtheircrisis

peaks,

butvolatility

persists,erodingcompetitivenessforenergy-intensiveuserssuchaschemicals,

aluminium

and

digitalinfrastructure,andexposing

howfragile

industrial

competitiveness

remains

incompetitivecostenvironment.

Investment

patternsareshiftingtoo:cleanenergy

investment

remains

resilient,expectedto

reach$2.2trillion

in2025,

roughlytwicethecapitaldirectedtofossilfuels.8

Yetannual In2024,global

CO2

emissionsrose0.9%

to

about38Gt–the

highest

on

record–asenergydemand

climbedroughly

2%,includinga4%

increaseinelectricityuse.BOX

1Scaling

the

Industrial

Transition:Hard-to-Abate

Sectors

and

Net-Zero

Progress

in2025Scaling

the

Industrial

Transition:Hard-to-Abate

Sectors

and

Net-Zero

Progress

in

20258

Aviation

Shipping Trucking Steel

Aluminium CementPrimarychemicals Oil

and

gas8.8trillion

RPK*(actual

passengertrafficcarried)121.7trillion

tkm*

(annual

distancecovered)35.1trillion

tkm*(annualdistance

covered)1,883

MT(annual

production)113

MT(annual

production)3,950

MT(annual

production)754

MT(annual

production)*RPK=revenue

passenger-km;tkm=

tonne-km;

mbpd=

million

barrels

per

day;

bcfd

=

bi