Scaling the Industrial Transition: Hard-to-Abate Sectors and Net-Zero Progress in 2025

The 2025 industrial transition is characterized by a 'multi-speed' progress where mature technologies exist to abate roughly half of industrial emissions, but scaling is hindered by high financing costs, fragmented regional policies, and infrastructure gaps. While clean energy investment is expected to reach $2.2 trillion in 2025, capital remains heavily concentrated in China and advanced economies. The report highlights a critical 'demand-supply credibility gap' where industrial activity continues to grow while low-carbon procurement remains insufficient to justify large-scale investment. Key bottlenecks include grid congestion and the slow development of CO2 and hydrogen transport networks, compounded by rising electricity demand from AI and data centres.

• Approximately 50% of industrial emissions can be abated using mature technologies, but the remaining half requires deeper innovation, stronger policy, and enabling infrastructure.
• The primary barrier to scaling low-carbon solutions has shifted from technical feasibility to economic and operational viability, with financing costs and demand certainty now being the decisive factors.
• Global climate policy is fragmenting into regional compliance models, moving from voluntary ambition to enforced accountability, which creates asymmetries in trade and investment.
• A significant 'demand-supply credibility gap' exists where industrial activity and emissions are rising faster than the capacity of clean supply, as voluntary corporate pledges have not translated into large-volume procurement.
• Clean energy investment is projected to reach $2.2 trillion in 2025, but 90% of this capital since 2021 has been concentrated in China and advanced economies, leaving emerging markets underfunded.
• Infrastructure is a critical bottleneck, with grid spending (approximately $400 billion annually) falling short of the $811 billion per year estimated by BloombergNEF as required for net zero.
• Artificial intelligence and data centres are projected to drive nearly 10% of global electricity demand growth by 2030, increasing competition for low-carbon grid capacity.
• Deployment of hydrogen and carbon capture, utilization and storage (CCUS) remains in early stages, with fewer than 10% of hydrogen projects reaching a final investment decision (FID).
• Supply chain concentration of critical minerals is a major risk; China controls approximately 70% of global rare earth production and processes nearly 90% of the world's rare earth elements.

APA

World Economic Forum (2025). Scaling the Industrial Transition: Hard-to-Abate Sectors and Net-Zero Progress in 2025. https://reports.weforum.org/docs/WEF_Scaling_the_Industrial_Transition_2025.pdf

Chicago

World Economic Forum. Scaling the Industrial Transition: Hard-to-Abate Sectors and Net-Zero Progress in 2025. 2025. https://reports.weforum.org/docs/WEF_Scaling_the_Industrial_Transition_2025.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Scaling the Industrial Transition: Hard-to-Abate Sectors and Net-Zero Progress in 2025 |date=December 2025 |url=https://reports.weforum.org/docs/WEF_Scaling_the_Industrial_Transition_2025.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2025scaling, author = {{World Economic Forum}}, title = {{Scaling the Industrial Transition: Hard-to-Abate Sectors and Net-Zero Progress in 2025}}, institution = {World Economic Forum}, year = {2025}, month = dec, url = {https://reports.weforum.org/docs/WEF_Scaling_the_Industrial_Transition_2025.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }