Industrial emissions have surged 70 per cent since 2000. Faster than any other sector. They now account for almost 40 per cent of total greenhouse gas emissions. Steel, cement, chemicals – the materials that build our world – are also heating our planet.

To reach net zero by 2050, we need industrial emissions to fall 30 per cent by 2030 and 90 per cent by 2050. The challenge is enormous.

This blog sets out our analysis on how we can succeed, based on our experience in Asia and Europe.

Despite progress, there’s a substantial, persistent investment gap

While emissions from sectors like steel, chemicals and concrete are profoundly off track, there has been significant progress in this decade. Prior to this, these sectors were notable largely for the total lack of climate action. Since 2020 many companies as well as the global steel and cement sectors have made commitments to net zero and interim targets, and substantial low carbon investments. The number of Green Industrial Policy measures grew steadily from 2016 to 2019, and doubled from 2019 to 2022 in both developed and emerging countries.

This has been powered by growing societal concern on climate, and specifically by the commitment and ingenuity of pioneers like the Energy Transition Commission, RMI and Agora and a rapidly growing community of civil society organisations pushing for change as well as investor pressure. We’ve witnessed the rapid growth in the community of organisations contributing to steel decarbonisation firsthand, with over seventy organisations now part of our India Green Steel Network (IGSN).

We’ll only cut emissions in the next decade if we unlock the necessary investment in new infrastructure now. There has been progress but the investment gap is still substantial, as the 2025 Project Tracker from the Mission Possible Partnership reveals. While there is a strong pipeline of projects on ammonia and momentum on methane and aluminium, progress in other areas is slow. The vast majority of projects still need to move to Final Investment Decisions. We must create the conditions now for a surge in low-carbon investment.

How to unlock a new industrial era

Why is this so hard to unlock? Some well known and connected reasons include; lack of policy incentives, high cost of capital, weak demand signals, the lack of international collaboration, and the high price of unproven technologies which we will need to scale. But what is the key to unlocking success in these areas?

Some see this as primarily a problem of innovation and technology. This is certainly part of the solution – many technologies are not available at scale, and there is a significant green premium for many solutions. But successful industrial development has never simply been driven by innovation and technology. An active and capable state has been vital, historically in the developed world and more recently in China, Japan, Korea and elsewhere. These countries continue to place industrial sectors at the heart of their national growth strategies.

Others see this as a challenge of public mobilisation – creating sufficient public pressure on these sectors to act, and on governments to regulate them effectively. Public concern is a motivating factor for all climate action. However, this has a limited impact in heavy industries that are not consumer facing, and where growth is concentrated in countries where civil society has less influence.

The key to unlocking success is to inspire political leadership on decarbonisation, in different contexts. This is abundantly clear from the positive success stories in specific Chinese regions, varying progress within Europe, and the investments stimulated by the Inflation Reduction Act under former President Biden. Where this leadership is not present, investment continues to flow into high-emitting infrastructure.

At Climate Catalyst, we see four stages in mobilising this sustained political leadership:

• Stage 1: Business as usual. Here vested interests maintain control and action remains limited
• Stage 2: Pledge, plan and pilot. No transformation has happened without early movers. In this stage, they emerge and the early action begins
• Stage 3: Scaling incentives and investment. Here those early movers become power coalitions and advocates for driving policy change
• Stage 4: Rapid emissions reductions. This is the good stuff. Widespread political commitments deliver emission reductions at scale

Many industrial sectors are at stage two – progress from even five years ago. But to move forward globally we need to bring together four essential ingredients.

Four essential ingredients

1. Focus on Asia

The first is to focus our efforts where it matters most in Asia. It is here – in China, India, Indonesia and elsewhere – that current and future heavy industry investment is concentrated. It is vital that Europe, the US and Australia still demonstrate leadership in this transition – having both the historic obligation and greater financial means to do so. But we must substantially increase our focus on Asia, developing the capacity and approaches that will succeed in these contexts.

2. Build alignment across all actors

The second ingredient is to build understanding and alignment across all those involved. Our community remains highly fragmented, both within and across countries. There is much for organisations to learn from one another, as we seek to navigate a complex external context and the huge challenge of unlocking the US$30 trillion needed in new capital, to agree standards for green commodities, push for trade agreements between countries, and so much more.

We need to build new spaces to come together, share learnings and develop strategies. This means listening to new perspectives, building trust and working to find alignment. Without this alignment, we will not overcome powerful forces that oppose the changes we seek. This vital work can be powered by groups, like Climate Catalyst, that can connect and align the work of different actors over time.

We need to bring clarity and rigour to this, developing targets and indicators for the strength of our community. In our work we see three key measures of success:

• Network diversity and strength: Do networks include the range of actors needed to influence policy? How active are these players?
• Network health and connectivity: Do stakeholders have the knowledge they need? How aligned are they? Are they undertaking collective action?
• Narrative change: Do dominant narratives make a consistent case for action? Is this reflected in media, policy and public discourse?

3. Mobilise new actors and build power

The third essential ingredient is to mobilise new actors, and build power. The huge swings in climate commitment and policy – in the US, Australia and Canada – fatally undermine the long-term signals needed to unlock low carbon investment. We need to inspire leaders across the political spectrum, by working together across climate camps, from civil society, business and the investment community, and inspiring new sources of leadership such as cities, local and regional governments, arts and culture and the media.

4. Centre growth and prosperity

The fourth ingredient is to focus on how climate policy and action can deliver national growth and prosperity. The context is changing. Countries are increasingly focused on economic self-sufficiency and growing tariff and non-tariff barriers, as a result of deep mistrust between the major economies and above all the US and China. While this makes international co-operation exceptionally difficult, it increases the space to align climate and growth policy, as countries seek greater self sufficiency in strategic industrial sectors.

We can see this trend in many places, with the European climate effort now clearly embedded in the drive for European competitiveness and progress in Indonesia dependent on aligning with the Presidential focus on an annual growth rate of eight per cent. Notable initiatives focused on this include: the CISL European competitive sustainability index for Europe and the work of the Global Green Growth Institute in Indonesia. We must now centre growth and prosperity in all our analysis and advocacy, in the global North and South.

A call for collective action

These four ingredients are essential to build our collective power and influence over national and regional policy. We’ve made real progress over the past five years. But to succeed in this decade, we must inspire sustained political leadership. We will only do so if we build a bigger, more sophisticated and more powerful community, and mobilise a new generation of leaders in the geographies that really matter. Collective action, when properly organised and directed, can overcome even the most entrenched interests.

Success in industrial decarbonisation isn’t just about reducing emissions. It’s about designing a transition that drives prosperity, creates employment, and builds more resilient economies.

We can only do this together. Whether you’re from business, investment, civil society, philanthropy, government or any other sector, your expertise and influence is needed. We’re here to learn from you and work with you. Together, we can energise the industrial transformation our world urgently needs.

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