From Ambition to Action: The Path to Net Zero for Hard-to-Abate Sectors

Hard-to-abate sectors such as steel, cement, aviation, and shipping still account for about 40% of global greenhouse gas emissions and are among the biggest obstacles to achieving net-zero targets. Although green hydrogen and carbon capture are widely regarded as key solutions, the gap between ambition and action is widening. High costs, insufficient infrastructure, and incomplete policy frameworks, coupled with many technologies still in early deployment stages, have left the industry uncertain about the timing and pathways for action.

Industry Status and Challenges

According to the World Economic Forum, emissions from hard-to-abate sectors are close to 40% of the global total, and progress in reducing emissions has been slow. Green hydrogen and carbon capture technologies are seen as fundamental pathways, but their commercial viability remains limited. Continued delays in action will put the crucial 2030 climate milestone at risk. The core of the issue is not what needs to be done, but how to implement it in practice.

Localization: Tailored Energy Transition

The energy transition is not a one-size-fits-all model. Different countries' resource endowments, infrastructure, and industrial demands determine their respective pathways. The UK focuses on expanding the combination of wind power with green hydrogen and carbon capture; Spain is expected to add about 13.8 GW of new solar capacity in 2025; Japan, due to limited domestic resources, is actively investing in hydrogen across the global supply chain. This localization strategy turns resource advantages into competitive barriers rather than constraints.

Innovation Hubs: From Pilot to Scale

Innovation hubs are becoming bridges that close the gap between pilot projects and large-scale deployment. Institutions such as Green Energy Parks integrate research, industry, and infrastructure, providing technology with a platform for testing and optimization in real-world environments. The Port of Rotterdam is building an integrated hydrogen hub covering production, import, transport, and application, leveraging its port role to achieve scale. Such hubs not only attract investment but also cultivate the talent needed to operate new technologies.

Restructuring of Global Energy Markets

The rise of localized hubs is reshaping the global energy trade landscape. Hydrogen trade flows are emerging: regions like Australia, the Middle East, and Morocco are targeting export markets, while other economies are building import-dependent supply chains. This is crucial for hard-to-abate sectors, directly impacting raw material procurement and supply security. The availability of cheap, reliable, low-carbon energy is becoming a decisive factor in the siting of heavy industry, elevating decarbonization from an operational challenge to a strategic issue.

Challenges and Risks

Despite technological progress, hard-to-abate sectors still face funding gaps, infrastructure lag, and policy uncertainty. The high cost of early-stage projects increases investment risk, while subsidy and carbon pricing mechanisms have not yet been coordinated globally. In addition, the diversity of technology pathways may lead to resource dispersion, slowing down the scaling process.

Future Outlook

The next few years will determine the pace of decarbonization in hard-to-abate sectors. Countries need to translate strategies into concrete actions, leveraging local advantages to accelerate technology deployment. The evolution of innovation hubs and global energy markets will shape a new landscape of industrial competitiveness, and regions that achieve clean energy access first will gain long-term economic advantages.Against the backdrop of the global engineering industry’s transformation, the net-zero progress of hard-to-abate sectors is not only about climate goals but will also redefine the manufacturing landscape of industrialized countries and the division of global supply chains. As infrastructure investment shifts toward low-carbon directions, the engineering industry must prepare for large-scale green hydrogen facilities, carbon capture plants, and the construction of supporting pipeline networks.