Scaling the Industrial Transition 2025

While aviation and shipping are advancing system- wide agendas through global frameworks such as the International Civil Aviation Organization’s (ICAO) and International Maritime Organization’s (IMO) Net-Zero Framework, the recent IMO decision to delay adoption by a year to October 2026 highlights uneven global regulation. Petrochemicals and oil and gas are also reframing their growth models, shifting from fuel-based to materials-based value creation – using hydrocarbons as feedstocks for chemicals, materials (including advanced materials) and low-carbon fuels. In doing so, they are positioning themselves as enablers of the broader transition, anchoring integrated industrial clusters and carbon management systems (Table 3). Carbon reduction progress in 2025 across hard-to-abate sectors TABLE 3 Sector Current progress Core transition lever Main barrier to scale AviationGradual SAF uptake and aircraft efficiency gains as mandates in Europe come into effect and new aircraft is deliveredSAF and operational efficiency High SAF fuel cost and commercial viability ShippingPilots in ammonia (NH3) and early commercial scale in methanol as regional regulation like EU Emissions Trading System (ETS) come into effect while dual-fuel new builds enter the fleetsEfficiency upgrades and low-carbon fuels (NH3, H2)IMO’s delay on global regulation, supply chain alignment, fuel- infrastructure gaps TruckingElectrification in short-haul, H2 pilots for heavy freightDual-tech approach (battery/H2) and integrated ecosystem (grid, charging)Refuelling and charging infrastructure gaps, fleet turnover cost and limited fleet readiness SteelEarly adoption of H2, electrification, recycling, CCUS pilotsRedesign of core production processesHigh capital intensity, reliable clean energy supply, cost verification and premium AluminiumGradual use of low-carbon electricity and recycling, with early pilots in inert-anode and energy- efficient smelting technologiesElectrification and recycling, supported by breakthrough smelting technologies (inert anodes) and low- carbon power sourcingElectricity costs, limited access to reliable low-carbon power, mobilizing recycling logistics and slow commercial readiness of next- generation smelting technologies CementEarly-stage pilots in low-clinker materials and CCUS integrationCCUS integration and redesign of core production processesLack of clear demand signal from buyers, absence of regulation and public procurement favouring low- emission cement, limited financing for decarbonized production Primary chemicalsMoving from fuel-based to materials-based growth, early CCUS and CO2-based feedstocksCCUS integration and circular economy modelsWeak demand and uncertain pricing for low-carbon products Oil and gasExpanding CCUS and H2 hubs, methane-abatement effortsClustered CCUS and storage networks, methane reduction technologiesAsset decarbonization economics, volatile carbon prices and slow policy alignment Source: World Economic Forum. Scaling the Industrial Transition: Hard-to-Abate Sectors and Net-Zero Progress in 2025 10