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

Hard-to-abate sectors such as steel, cement, aviation, and shipping contribute approximately 40% of global CO₂ emissions, making them the most challenging strongholds to overcome in achieving net-zero targets. Technologies like green hydrogen and carbon capture and storage (CCS) are seen as key solutions, but current deployment lags far behind ambitions—costs remain high, infrastructure is underdeveloped, policy frameworks are still evolving, and many technologies are still in early demonstration stages. As the 2030 climate milestone draws closer, continued delays will expose global temperature goals to material risks.

Industry Background: The Challenge and Opportunity of 40% Emissions

According to the World Economic Forum, hard-to-abate sectors emit about 15 billion tonnes of CO₂ equivalent annually, with emission intensity declining slowly. Steel and cement production rely on high-temperature processes and chemical reactions, while aviation and shipping are constrained by the need for high-energy-density fuels. Currently, about 90% of global steel is still produced via the blast furnace–basic oxygen furnace (BF-BOF) route, emitting about 1.8 tonnes of CO₂ per tonne of steel; process emissions from cement (limestone decomposition) account for over 60% of the sector's total emissions. The efficiency of traditional carbon reduction measures has reached its limit, making a breakthrough technological transformation essential.

The International Energy Agency (IEA) points out that in the net-zero emissions scenario by 2050, hard-to-abate sectors need to achieve rapid emission reductions starting from 2030. Hydrogen-based direct reduced iron (H2-DRI), carbon capture and storage (CCS), and green ammonia fuel will become core pillars. However, the commercial maturity of these technologies remains low: globally, only a few million-tonne-scale CCS projects are operational, and the cost of green hydrogen is still above $4/kg, 2–3 times that of fossil-fuel-based hydrogen.

Current Developments: Localization and Innovation Hubs Driving Progress

Emerging Divergent Pathways

Major economies are formulating differentiated decarbonization pathways based on their resource endowments. The UK, relying on abundant wind resources in the North Sea, plans to build large-scale offshore wind capacity and combine it with green hydrogen and CCS to support emission reductions in steel and chemical industries. Spain added 13.8 GW of new solar capacity in 2025, driving deep decarbonization of the power system and subsequently providing cheap electricity for electrolytic hydrogen production. Japan, due to limited domestic renewable energy resources, is actively building overseas green hydrogen supply chains, signing multiple cooperation memoranda with Australia, the Middle East, and Southeast Asian countries, aiming to import 3 million tonnes of hydrogen by 2030.

This localization strategy is not only a pragmatic choice under resource constraints but can also be transformed into a competitive advantage. For example, Morocco, leveraging its solar and wind endowments, is building a green hydrogen export hub, and innovation centers like Green Energy Park are becoming key vehicles for technology incubation and industrialization.

Innovation Centers Bridging the Commercialization GapThe "valley of death" from laboratory to large-scale deployment is a major obstacle for hard-to-abate technologies. Innovation centers integrate research, industry, and infrastructure to provide real-world validation environments, accelerating technology maturation. Take the Port of Rotterdam as an example. It is building an integrated hydrogen hub encompassing production, import, storage, transport, and industrial applications, aiming to achieve a hydrogen throughput of 4 million tons per year by 2030. Similarly, Green Energy Park in Morocco offers full-chain services from R&D to pilot testing, attracting global investors to set up pilot projects and cultivating local operation and maintenance talent.

The existence of these centers significantly reduces companies' trial-and-error costs and clears technical uncertainties for scale-up. Research by the WEF shows that clustered innovation ecosystems can shorten the time from R&D to commercialization for industrial decarbonization technologies by 30%-50%.

Impact on Energy Systems: Reshaping Trade and Geopolitical Landscape

As hard-to-abate industries shift to low-carbon energy, the global energy system is undergoing profound changes. Cross-border trade in hydrogen and low-carbon fuels is emerging. Resource-rich regions like Australia, the Middle East, and North Africa are expected to become new energy exporters, while Europe, Japan, and South Korea become major demand centers. This is similar to the current natural gas market, but with a more complex supply chain: infrastructure such as ammonia as a hydrogen carrier, liquid hydrogen ships, and pipeline transport requires entirely new investment.

At the same time, the location logic for industrial sectors is changing. In the past, steel plants and refineries were often located near raw material sources or consumer markets; in the future, the availability and cost of low-carbon energy will dominate investment decisions. Middle Eastern oil giants are leveraging cheap natural gas and solar advantages to build blue and green hydrogen projects, attempting to shift crude oil exports toward low-carbon products. European aluminum smelters are beginning to relocate to regions with hydropower resources. This "energy arbitrage" means that decarbonization of hard-to-abate industries is not only a technical issue but also a reshaping of the global industrial competitive landscape.

Challenges: Cost, Policy, and Infrastructure

Although the prospects are promising, real challenges remain severe. First, the cost gap is huge. Currently, green hydrogen costs 2-3 times more than gray hydrogen. Even with carbon pricing, it remains uneconomical in many regions. Carbon capture technology has not yet fully demonstrated large-scale engineering feasibility, with costs ranging from $60 to $200 per ton of CO₂. Second, infrastructure is severely insufficient: the global existing hydrogen pipeline network is only about 5,000 kilometers, far from meeting demand; hydrogen refueling stations, ammonia bunkering facilities, etc., are still in their infancy. Third, policy uncertainty affects investment decisions. Although the Carbon Border Adjustment Mechanism (CBAM) has been introduced, implementation details and coverage remain to be clarified; while many national hydrogen strategies exist, subsidy and regulatory frameworks often change.

Furthermore, technology maturity varies. Direct air capture (DAC) is energy-intensive and expensive; alternative cementitious materials (e.g., alkali-activated cement) in the cement industry have not yet been mass-produced; the synthetic pathway for aviation fuel (PtL) has low efficiency. These bottlenecks require sustained R&D investment and cross-industry cooperation.

Future Outlook: Action Roadmap 2025-2045Looking ahead to the next 5-20 years, decarbonization in hard-to-abate sectors will exhibit the following trends:

• Rapid decline in technology costs: BNEF predicts that by 2030, the cost of green hydrogen will drop below $2/kg, while continued reductions in solar and wind costs make electrolysis more competitive; scaling up CCS projects will reduce unit costs by 30%.
• Gradual improvement of policy frameworks: The EU, the US, and China will introduce stricter emission standards and carbon pricing, with sector free allowances accelerated for reduction. The expansion of CBAM to more products will drive global carbon price convergence.
• Widespread adoption of industrial cluster models: Zero-carbon industrial clusters around ports and industrial parks will increase, enabling multi-energy complementarity of electricity, hydrogen, and heat, as well as resource recycling. Northern Europe, the Middle East, and East Asia will take the lead in forming cross-regional low-carbon supply chains.
• Shift in investment structure: Guided by governments and multilateral development banks, private capital will move from pilot projects to commercial scale. Climate funds and green bonds will provide long-term low-interest financing for infrastructure.

Ultimately, the net-zero transition in hard-to-abate sectors will evolve from an "option" to a "necessity." Countries and enterprises that establish localized advantages and technological innovation systems first will dominate the global low-carbon competition. And the urgency of action has never been clearer—the 2030 window of opportunity is just a few years away; every delay increases the cost and difficulty of the eventual transition.