State of Manufacturing Decarbonisation 2026
Industry is roughly a quarter of global energy-related emissions, and most of that comes from a handful of hard-to-abate processes. The path to net zero for these sectors is now reasonably well mapped — electrify what you can, capture what you cannot, and switch the rest to clean fuels — but the bill is large and the timeline is tight. This report pulls together the public numbers on where manufacturing decarbonisation stands in 2026 and which levers are actually moving.
Industry is about a quarter of energy-related CO2
Source: IEA — Industry — Energy System (2023)
The industry sector emitted roughly 9 gigatonnes of CO2 directly in 2022 — about a quarter of all energy-system emissions — when process emissions are counted alongside fuel combustion. A small group of materials dominates that total: iron and steel, cement, and chemicals together account for the bulk of it. That concentration is the reason decarbonisation effort focuses so heavily on a few process routes rather than spreading evenly across the factory floor.
The capital bill for heavy industry is measured in trillions
Fully decarbonising the four heaviest sectors — ammonia, cement, ethylene and steel — is estimated to need somewhere between USD 11 trillion and USD 21 trillion through 2050, with the wide band driven mainly by the future price of zero-carbon electricity. Analysts disagree on the exact figure, but agree on the order of magnitude. The cost shows up in the product too: green steel and cement are projected to carry production-cost premiums of roughly 30% and 45% respectively, which is why offtake demand and carbon pricing matter as much as the technology.
Electrification is scaling faster than capture
Source: IEA — CCUS projects around the world are reaching new milestones (2025)
Where decarbonisation can run on existing kit, it is moving. The electric-arc-furnace route reached about 29% of global crude-steel output in 2024, up from 28.6% the year before, recycling scrap instead of reducing ore in a blast furnace. Carbon capture, by contrast, remains early: roughly 50 megatonnes a year of capture capacity was operating in early 2025, with the project pipeline pointing to around 430 megatonnes by 2030 if announced plants are built. The pattern is clear — electrification and efficiency are doing the near-term work, while capture and clean hydrogen are still proving themselves at scale.
FAQ
Which industries are hardest to decarbonise?
Iron and steel, cement and clinker, and bulk chemicals are the hardest. They combine high-temperature heat with chemical process emissions that are not solved by switching electricity supply, so they need new process routes, clean hydrogen or carbon capture rather than efficiency alone.
Is carbon capture or electrification the bigger near-term lever?
Electrification and efficiency are doing more in the near term because they use proven equipment and pay back faster — the electric-arc-furnace route already makes about a third of the world's steel. Carbon capture is growing but still small, at around 50 megatonnes per year of operating capacity, so it is a longer-horizon lever for the emissions that cannot be electrified away.
Sources
- IEA — Industry — Energy System
- McKinsey & Company — Decarbonising the world's industries: a net-zero guide for nine key sectors
- IEA — CCUS projects around the world are reaching new milestones
- World Steel Association — World Steel in Figures 2025
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Sectors: Steel & Metals · Cement · Chemicals · Power Generation