Manufacturing industries account for up to 40% of the global CO2 emissions. Therefore, climate objectives cannot be achieved without significant progress in emission reduction in industry. Although industries themselves are taking significant steps to reduce their carbon footprint – for instance, 88% of the major steel companies around the world have introduced net-zero targets – further efforts are needed, including by policy makers.

Reaching net-zero in industry extends beyond simply translating climate objectives into decarbonisation pathways. It entails a comprehensive industrial transformation encompassing labour and skills, research and development (R&D), finance, and trade. OECD analysis underscores the need for an industry perspective - next to an energy and climate perspective - to achieve this goal. This approach demands consideration of the specificities of industries across countries, engagement with industry stakeholders, and awareness of the diversity of circumstances. It also highlights the need for a just and inclusive transition in meeting these objectives.

While industries are making strides towards net-zero, the current rate of progress is insufficient. This lag can partly be attributed to barriers hindering industrial advancement. Achieving industrial decarbonisation requires an enabling environment that offers access to finance and skills, to resources such as clean hydrogen and renewable energy, and support for developing new technologies and scaling-up of existing clean technologies.

Policy makers play a crucial role in fostering an environment that facilitates industrial decarbonisation. Effective policies must be both comprehensive, combining different drivers of decarbonisation, and tailor-made to address the unique circumstances of individual countries. 

Many industries operate on a global scale through trade and investment. That means that progress (or the lack thereof) in decarbonising in one country can affect other countries as well. International co-operation is therefore essential to ensure progress and avoid unnecessary distortions to open markets and free trade. This co-operation is also essential for scaling the transition, to establish new trade routes, create regional markets for green products, develop new standards, and support technology transfer and capacity building through which good practices can be shared. 

The Clean Energy Finance and Investment Mobilisation (CEFIM) programme has developed a framework for industry’s net-zero transition in partner countries, the implementation of which is complemented by dissemination activities through country, regional and international dialogue.