Scaling the Industrial Transition 2025

In 2025, there has been progress in industrial transition, though it remains uneven (Table 2) – electrification is expanding, renewable generation is accelerating and energy storage is scaling rapidly. In 2024, renewables accounted for 92% of new electricity capacity,13 while sales of electric trucks surpassed 90,000, growing 80% YoY.14 At the same time, scale-up is constrained more by economics and system readiness than by technology: fewer than 1 in 10 clean hydrogen projects have reached final investment decision (FID),15 reflecting financing, permitting and infrastructure gaps that limit deployment and profitability. Hard-to-abate sectors are entering a new phase. Efficiency remains a critical lever – particularly in aviation, shipping and trucking – where design and operational optimization deliver near-term emission cuts. In aviation, for instance, aircraft fuel efficiency improved by around 2.5% per year over the past decade, limiting a 35% rise in air travel demand to only a 20% increase in energy use. In shipping, activity rose nearly 30% between 2015 and 2024, yet oil demand increased by less than 5% to around 5 million barrels per day (mbpd), thanks to strong efficiency gains and gradual fuel diversification.16 Meanwhile, industries such as steel, aluminium and cement are transitioning from traditional, high-emission processes towards fuel switching to natural gas, hydrogen, electrification, recycling and carbon capture. Trucking exemplifies this dual transition, with battery-electric vehicles scaling for short-haul and hydrogen fuel cells emerging for heavy freight.1.2 State of play of the industrial transition Sectoral snapshot: demand growth, low-carbon supply and emissions trends TABLE 2 Sector ActivityYoY change in activity (2024 vs 2023)Emissions (Gt CO2) and YoY change (2024 vs 2023) Aviation8.8 trillion RPK* (actual passenger traffic carried) +10.4%1.108 (+6.4%) Shipping121.7 trillion tkm* (annual distance covered) +5.5%0.847 (+2.7%) Trucking35.1 trillion tkm* (annual distance covered)  +1.3%1.968 (+0.6%) Steel1,883 MT (annual production) -1.1%2.750 (-0.4%) Aluminium113 MT (annual production) +4.6%1.162** (+4.1%) Cement3,950 MT (annual production)-3.9%2.324 (-3.5%) Primary chemicals754 MT (annual production) +3%0.971** (+2.3%) Oil and gasOil: 103 mbpd* Oil: +4%5.100*** (-6.4%)Gas: 411 bcfd* Gas: +1.5% (annual production) *RPK = revenue passenger-km; tkm = tonne-km; mbpd = million barrels per day; bcfd = billion cubic feet per day. **Data sourced from World Economic Forum. ***Latest data available from 2022. Sources: Airports Council International World & International Civil Aviation Organization (ICAO). (2025). Joint ACI World-ICAO passenger traffic report, trends and outlook; International Energy Agency (IEA). (2025). World Energy Outlook 2025; World Steel Association. (2025). World Steel in Figures 2025; International Aluminium Institute. (n.d.). Primary aluminium production; International Energy Agency (IEA). (2025). Oil 2025: Analysis and forecasts to 2030; International Energy Agency (IEA). (2025). Gas 2025: Analysis and forecasts to 2030. Scaling the Industrial Transition: Hard-to-Abate Sectors and Net-Zero Progress in 2025 9