Scaling the Industrial Transition 2025

Corporate commitments to purchase green materials and fuels are rising, but voluntary uptake remains too limited to move markets alone. Price gaps, unclear certification, limited standardization and weak consumer willingness to pay continue to constrain procurement at scale. Across hard- to-abate sectors, demand for verified low-carbon products remains too fragmented to justify major investment in new supply. The outcome is a widening demand–supply credibility gap: activity and emissions are climbing faster than clean-supply capacity. Global CO2 emissions reached an all-time high in 2024,49 and fossil-based output still dominates. Industry and transport already account for around 40% of global GHG emissions, and demand for these sectors is projected to rise by over 60% by 2050 – underscoring that without mandated and standards-based demand signals, clean supply cannot scale.50 This demand–supply credibility gap persists because early frameworks and voluntary demand remain transitional. While regulatory frameworks are shaping price signals by embedding carbon costs and product standards, uptake still depends on voluntary and aggregated offtakes. Mechanisms such as the EU CBAM, ReFuelEU Aviation and FuelEU Maritime are creating early “compliance- driven demand”, while buyers’ alliances like the First Movers Coalition (FMC), SteelZero, ConcreteZero and Sustainable Steel Buyers Platforms generate “voluntary market pull”. These efforts de-risk early projects by providing credible buyers and demand visibility. Still, volumes, contract tenors and green premiums remain too limited to make projects bankable (Figure 3). Converting intent into investment will require scalable demand mechanisms – such as public procurement, border adjustments that reward low-carbon content and standardized green-material contracts – to turn early pledges into long-term, investable markets. Green premium gap across hard-to-abate sectors FIGURE 3Difference in cost, low-carbon versus conventional products (%) 020406080100120340 Aviation (SAF) Shipping (green methanol)Low-carbon cement using carbon captureOil and gas Low-carbon steel using carbon captureLow-carbon steel using low-carbon hydrogenActual vs. acceptable green premiums Actual green premium* Acceptable green premium**1025 1118 119 5108 10123340 9 *Difference in cost between low-carbon product versus conventional alternative; **Green premium that organizations are willing to pay Source: Capgemini Research Institute. Emissions and demand are climbing, but clean supply investments are held back by weak offtake incentives, uneven policy support and high costs. Scaling the Industrial Transition: Hard-to-Abate Sectors and Net-Zero Progress in 2025 16