A reality check: Progress amid persistent challenges
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Hard to abate industries account for nearly 40 percent of global greenhouse gases. And while these sectors are nudging in the right direction, heavy industry comes up against fundamental physics when it comes to decarbonising. Steel production requires temperatures exceeding 1,500°C. Cement manufacturing inherently releases CO2 through chemical reactions. Aviation demands energy-dense fuels. These process emissions – distinct from energy-related emissions – have remained largely unchanged for decades.
Over the last 12 months, companies in harder-to-abate sectors have marched on by positioning themselves for long-term competitiveness by anticipating evolving regulatory frameworks, tightening regulations and procurement requirements. Why else are organisations not losing focus on decarbonisation? Fifty-six percent of surveyed business leaders say the primary motivation for investing in the transition is to secure long-term industrial competitiveness.
Orchestrate an ecosystem Decarbonisation cannot be achieved in silos. Organisations must adopt a collective approach to drive low carbon operations and processes. Internally that means breaking down traditional silos and
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encouraging cross-functional cooperation. Collaboration extends to encompass like- minded partnerships with industry peers, government, industrial hubs, even competitors. Industry alliances and collaborative initiatives enable shared standards, best practices and frameworks.
Digital-first measurement and tracking Spreadsheet-based emissions tracking is becoming a competitive liability. Companies that can accurately and repeatedly report their decarbonisation progress are emerging as preferred partners for investors and customers. There is also greater scrutiny surrounding emissions, their origin, calculation and aggregation. Leverage digital data to track metrics, map supply chains and integrate renewables into manufacturing.
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Outside of the World Economic Forum’s recommendations³ to focus on collaboration, electrification and circularity efforts, here are practical measures for business leaders looking to position their decarbonisation efforts for profitability and competitiveness. Five ways to make viable progress
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Integrated solution development Explore which low carbon alternatives for scaling are most cost effective and also provide greater diversification across domestic and export customer bases. Execution plans that combine multiple low carbon energy customer sets are likely to provide the best opportunities for early market entry. It will take a combination of solutions underscored by social buy-in, equitable policies, workforce upskilling and supporting communities. Consider harnessing AI and simulation tools to break down increasingly complex scenarios and support smarter decision-making.
Diversification for market leadership Focus on a balance of short- term wins, while investing in longer term goals and more transformational strategies. Devote resources to large, complex decarbonisation projects while focusing on near-term opportunities that bring you closer to the end goals. For example, investing in renewable energy infrastructure while pursuing ongoing energy efficiency programs. Consider what’s available to your business across financing mechanisms such as green bonds, public- private partnerships, climate funds and carbon pricing. Slicing up your decarbonisation strategy into achievable components will help you adopt a more practical approach while working on bigger, flagship-style solutions.
Technology investment for new efficiencies Digital innovation can fast- track positive outcomes. Emerging technologies across carbon capture, utilisation and storage, biofuels, new production pathways for materials, hydrogen and its derivatives can all be considered in your plans. Start with considering what technologies you already have available and go from there to establish new systems and platforms that support long-term transition efforts. To select ideal digital partner organisations, the additional capabilities and expertise required to accelerate achieving your net zero goals. conduct a needs gap assessment to identify
Shifting the narrative from problem solving to opportunity creation
Intertwined in these steps is the call for pooling thinking, best practices and resources, desperately needed to drive industry forward. Creating forums and collaboration opportunities is crucial for carving out a clear path. Organisations seeking long-term stability, adaptation and resilience, and those wanting to perform in an increasingly complex environment need to decarbonise. Evaluating your risks and implementing actions to
address operations, practices, products and services is critical regardless of your industry. Hard-to-abate sectors require more significant diversification and changes across the supply chain to edge closer to targets. Reframe the conversation from a set of problems to solve and costs to outlay into one about opportunity and future-proofing.
3. World Economic Forum, - ‘Hard-to-abate’ sectors are reducing emissions, here’s how they can accelerate progress towards net zero’. December 2024. https://www.weforum.org/stories/2024/12/net-zero-hard-to-abate-sectors-decarbonization/
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