Increasing financing support is vital to boost decarbonisation efforts in “hard-to-abate” industries and remains key to achieving net-zero targets, according to a new report.
Top executives from these industries have called for more help as less than a third believe they do not have adequate budgets to do so, and more than half have not yet set their net-zero targets, a joint study by Abu Dhabi’s clean energy company Masdar and FT Longitude released on Tuesday said.
Reducing emissions in hard-to-abate industries such as cement, steel, aluminium, petrochemicals, shipping, aviation and manufacturing, is also vital for long-term climate change objectives, as industry and transport account for almost half of global emissions.
The report, which identified major hurdles in decarbonisation of heavy industries and transport, found that half of the senior industry leaders are “more confident that net zero in their business is more achievable today compared to a few years ago”.
“Addressing carbon emissions in hard-to-abate sectors is a priority,” said Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, Cop28 President-Designate and chairman of Masdar.
“There is simply no path to net-zero that does not include decarbonising these essential industries.”
The UAE is set to host the next UN Cop28 climate summit in November in Dubai.
The meeting of heads of state, finance and business leaders and members of the civil society will take stock of what has been achieved since the Paris Agreement of 2015 was adopted by most countries.
The agreement aims to limit global warming to less than 2ºC — preferably no more than 1.5ºC — above pre-industrial levels. As Cop28 President-Designate, Dr Al Jaber will help shape the conference agenda and intergovernmental negotiations.
“Cop28 will see the conclusion of the ‘Global Stocktake’, offering a review of progress against the Paris Agreement. We know that the results will show a significant gap in where we are and where we need to be,” Dr Al Jaber said.
“The UAE is committed to addressing this, to reigniting momentum and to bringing the goal of 1.5 ºC within reach.”
This will be 'a Cop of solidarity' says Cop28 President-designate Dr Sultan Al Jaber
Despite the optimism that exists across the industry, and the emergence of innovative new technologies to capture and store carbon, industry executives pinpointed access to finances as a major barrier for accelerating progress.
Up to 60 per cent of organisations surveyed across Europe, the Asia-Pacific, the Middle East, and North America have still not set their decarbonisation targets, the report found.
About 83 per cent and 62 per cent of senior executives from the Middle East and the Asia-Pacific regions, respectively, said they are taking steps to reduce emissions but have not set a target date for completion, according to the report.
“Only 30 per cent of senior executives overall indicated their budgets will be able to meet decarbonisation needs, and more than 50 per cent are concerned about the impact of global economic headwinds on decarbonisation investment,” it added.
In addition to financing hurdles, the report underlined the disparity in available technologies to accelerate decarbonisation efforts.
It also called for greater industry collaboration and importance of increased public sector support as top industry executives called for incentives across “funding, legislation and taxation” support by governments across the world to achieve national net-zero targets.
According to the survey, only 24 per cent of senior executives expected to receive funding or incentives from governments.
More than 40 per cent of those polled believed that without “greater incentives and funding they will be unable to meet their domestic market’s net-zero targets”, the report added.
