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Important Steps Are Being Taken Towards Decarbonization in Industrial Sectors
07 May 2025The WEF report reveals that many industrial sectors have begun to reduce their emissions.
The “Net Zero Industry Tracker Report” prepared by the World Economic Forum (WEF) examines the emission reduction strategies of industrial sectors and the progress made. The report shows that “hard-to-abate” sectors have begun reducing their emissions as of 2023 in the decarbonization process.
Between 2022 and 2023, emissions in the same sectors decreased by 0.9 percent, while global energy-related total emissions increased by 1.3 percent. In addition, emission intensity in these sectors decreased by 4.1 percent between 2019 and 2023. Over the past year, this decline accelerated to 1.2 percent. A decrease in emission intensity was observed in the aluminum, cement, chemicals, aviation, and transportation sectors. Additionally, energy intensity decreased by 3.2 percent in 2022, achieving an improvement 1.6 times higher than the global average.
The report states that an additional $30 trillion investment is required in these sectors by 2050 to achieve the net-zero emissions target. This amount corresponds to approximately 45 percent of the global net-zero investment requirement by 2050. However, companies are struggling to meet the high costs required for decarbonization and to ensure sufficient profitability.
Data and artificial intelligence technologies stand out as important tools for achieving the net-zero emissions goal. The use of generative artificial intelligence can increase capital efficiency by 5 to 7 percent, reducing capital needs in hard-to-abate sectors by between $1.5 and $2 trillion. In addition, asset management, energy efficiency, R&D and product-based reporting also play a significant role in the net-zero transition. However, increased use of artificial intelligence also increases electricity demand, creating challenges in accessing low-carbon energy.
Collaboration is Crucial in Emission Reduction
Reaching the net-zero emissions target requires a complex and challenging process for many sectors. The Net Zero Industry Tracker Report emphasizes that progress must be made in five critical areas — technology, infrastructure, demand, capital, and policy — in order to reach these goals.
In the field of technology, positive developments were recorded this year with economic improvement and the adoption of innovations. Significant progress was achieved in electric transportation, energy efficiency, methane emissions reduction and the use of clean technologies in industrial processes. However, nearly half of the technologies required for intensive emission reductions are still not commercially viable.
In this case, it is noted that more R&D investment is needed in carbon capture and storage technologies, new production methods and hydrogen, and developing these technologies is critically important for the net-zero target.
The report also states that rapid progress has not been made in infrastructure development. To reach net-zero targets, hydrogen and carbon capture and storage capacities need to increase by 70 percent and 55 percent respectively by 2050. However, these infrastructures currently meet only 1 percent of the required capacity.
Although some improvement has been achieved in low-carbon energy infrastructure, hydrogen and carbon capture and storage infrastructures need to be rapidly expanded. Therefore, it is emphasized that more investment is required in clean energy and related infrastructures.
The report states that limited progress has been made regarding demand for green products. Since the necessary conditions for the widespread adoption of green products have not yet been established, their higher cost compared to conventional products, uncertainty in customer demand and the lack of sectoral carbon thresholds for green products are shown as the main reasons.
Policy support has also been insufficient so far and regional collaborations have not reached the required level. As of 2024, 75 carbon pricing instruments have been implemented worldwide, but these instruments cover only 24 percent of global emissions. Additionally, rising protectionism such as tariffs on green products creates additional costs. Policies focusing on incentives for low-emission production processes have not yet been sufficiently implemented.
Emission Reduction Continues in Industrial Sectors
The report also shares findings on aluminum, cement, steel, oil and gas, heavy transportation, shipping, chemicals and aviation sectors.
Aluminum: Between 2019 and 2023, the sector managed to reduce emission intensity by 13.6 percent, achieving this through measures such as reducing coal usage, increasing energy efficiency and expanding the use of recycled aluminum.
In 2019, the sector produced a total of 1.13 gigaton (Gt) of carbon dioxide equivalent (CO2e) emissions, which decreased to 1.12 Gt in 2023. However, in line with the net-zero goal, the sector needs to reduce emission intensity by 30 percent by 2030 and by 97 percent by 2050.
Cement: The sector's emissions decreased by 4 percent from 2019 to 2023. The energy mix in the cement sector consisted of 77 percent coal and petcoke, 15 percent natural gas, 4 percent non-renewable waste and 4 percent renewable waste.
The sector is expected to reduce emission intensity by 22 percent compared to 2023 levels by 2030. Meanwhile, 61 percent of publicly listed companies in the cement sector state that they consider climate change in their operational decision-making processes.
Steel: Between 2019 and 2023, emission intensity in the steel sector increased by 0.6 percent. The main reason for this increase was the rise in production based on the high emission-intensity blast furnace technology.
In 2023, steel production recorded a limited increase of 0.1 percent compared to the previous year. In 2022, the distribution of energy sources used in steel production was 73 percent coal, 14 percent electricity, 8 percent natural gas, 1 percent oil and 3 percent other sources.
Significant progress has also been made in the transition to cleaner production technologies. The basic oxygen furnace capacity ratio decreased from 64.5 percent to 64 percent, while electric arc furnace capacity ratio increased from 32 percent to 43 percent.
The sector plans to reduce emission intensity in primary steel production by 45 percent and in secondary steel production by 65 percent by 2030 and to achieve net-zero emissions in 2050. In addition, 77 percent of major publicly listed steel companies state that they consider climate change in their decision-making processes.
Heavy transportation: The sector's emission intensity decreased by 14 percent over the last five years, largely due to increased fuel efficiency. In 2023, the total freight transported reached a record high of 32.8 trillion ton-km. Low-emission fuel usage accounted for 4 percent of total fuel consumption in the heavy transportation sector.
According to the International Energy Agency (IEA), the transportation sector is expected to reduce emission intensity by 28 percent by 2030 and by 94 percent by 2050.
Shipping: Between 2019 and 2023, the sector reduced emission intensity by 4.6 percent. The main reasons were reduced speeds particularly in bulk carriers, chemical tankers and oil tankers, and improvements in vessel design efficiency. However, due to the use of inefficient routes and port congestion, emission intensity increased by 1 percent from 2022 to 2023.
Under the baseline scenario, sector emissions are expected to increase by 5 percent by 2030 compared to 2023 levels; decrease by 0.2 percent by 2040 and by 7 percent by 2050.
Chemicals: Over the last five years, the emission intensity of primary chemicals remained stable at approximately 1.3 Mt CO2e / Mt chemical. The main reason was the sector's prioritization of supply chain issues and commodity price fluctuations.
Total emissions increased by 6 percent between 2019 and 2023. This increase was driven by a 4 percent rise in ammonia demand, 19 percent in methanol demand and 9 percent in demand for high-value chemicals.
In 2022, low-emission production accounted for 2 percent of global chemical production, while recycled plastic usage accounted for 8 percent of total plastic production. In the same year, energy source distribution in the chemical sector was 55 percent natural gas, 36 percent coal, 7 percent electricity, 1 percent oil and 0.6 percent biofuel.
According to the IEA Net Zero Scenario, the chemical sector is expected to reduce emission intensity by 28 percent by 2030. In addition, 90 percent of publicly listed companies in the chemical sector state that they consider climate change in their operational decision-making processes, while 58 percent state that they have emission reduction targets approved by the Science Based Targets initiative (SBTi).
Oil and natural gas: The oil and natural gas sector succeeded in reducing emissions by 3 percent between 2018 and 2022. The reduction was driven by lowering methane and flaring emissions, electrifying operations and implementing efficiency-enhancing measures. In 2022, total sector emissions amounted to 5.1 Gt CO2e, equivalent to 15 percent of global energy-related greenhouse gas emissions.
According to the IEA Net Zero Scenario, the oil and natural gas sector aims to reduce emission intensity by 55 percent by 2030 and by 91 percent by 2050. In addition, the sector plans to reduce methane emissions by more than 75 percent by 2030 and eliminate all flaring except in emergencies. In line with this goal, flaring volume is expected to decrease by 95 percent.
Aviation: 2023 was a strong recovery year for the global aviation sector. Global air passenger traffic increased by 37 percent in 2023, reaching 94 percent of 2019 pre-pandemic levels. In the same period, direct emissions decreased by 8 percent compared to 2019.
The sector succeeded in reducing total emission intensity by 3 percent over the past five years. The use of sustainable aviation fuel (SAF) increased to 600 million liters in 2023. However, this amount corresponds to only 0.2 percent of total aviation fuel consumption. In 2024, SAF volume is expected to triple and meet 0.53 percent of the sector’s fuel demand. Energy intensity also decreased by 19 percent in 2022 compared to 2020.
According to the Net Zero Roadmap of the International Air Transport Association (IATA), the aviation sector is expected to reduce emission intensity by 13 percent by 2030 and by 76 percent by 2050. In addition, 75 percent of publicly listed companies in the sector state that they incorporate climate change into their operational decision-making processes.
Source: ISO Green Blog
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