Hard-to-abate sectors

A deep dive into hard-to-abate sectors: types, characteristics and challenges

Urgent action is needed to address the so-called ‘hard-to-abate’ sectors, areas that are difficult to decarbonise and where reducing emissions is particularly challenging. Iberdrola is contributing to this challenge with its focus on green hydrogen, as well as electrification and industrial innovation.

Hard-to-abate sectors refer to industries where reducing carbon emissions is particularly difficult due to the nature of their processes and their heavy reliance on fossil fuels. These industries include shipping, aviation, heavy transport and steel and cement production, where the high energy inputs required and specific chemical reactions make decarbonisation difficult. According to the International Renewable Energy Agency (Irena), these sectors are not currently on track to achieve net zero emissions by 2050, which is a key objective of the Paris Climate Agreement with regard to energy transition.

What is hard-to-abate? A deep insight into the affected sectors

Hard-to-abate sectors depend on processes or energy sources that are very difficult to make carbon neutral with current technology, and thus achieve sustainability. They rely on the combustion of fossil fuels, for example, or chemical reactions that release greenhouse gases into the atmosphere. They include sectors such as shipping, aviation, heavy-duty trucking, and the production of iron and steel, as well as chemicals and petrochemicals.

According to a 2024 report from the International Renewable Energy Agency (Irena), none of these hard-to-abate sectors is currently on track to reach net-zero emissions by 2050, which is the objective of the 2015 Paris Agreement in a bid to limit global temperature increases to 1.5ºC since the start of the industrial era. Hard-to-abate sectors are a major obstacle on the path to tackling climate change, given that they currently account for one-third of global energy-related emissions and one-fifth of total CO₂ emissions.

What’s more, emissions from these areas are expected to grow by more than 50% from here to 2050 under a “business-as-usual” (BAU) scenario – i.e. one where no more effort is made to curb greenhouse gas emissions.

Some key figures

Hard-to-abate sectors pose a major challenge in the fight against greenhouse gas emissions and the resulting climate change. This is shown by figures reflecting the scale of the challenge, according to a report published in July 2024 by Citi.

31% of global GHG emissions come from hard-to-abate sectors
12 years until methane disappears from the atmosphere
60% of energy generated today comes from fossil fuels
3% of energy-related GHG emissions come from maritime transport

SEE INFOGRAPHIC: Hard-to-abate sectors: Some key figures [PDF]

What are hard-to-abate emissions?

Hard-to-abate emissions refer to the actual pollutants that are released into the Earth’s atmosphere by these processes, such as carbon dioxide or methane. The processes associated with hard-to-abate industries require very high amounts of energy, and therefore the combustion of fossil fuels with the resultant emission of greenhouse gases. What’s more, hard-to-abate emissions are often produced as a byproduct of chemical reactions.

Characteristics and challenges of hard-to-abate emissions

Greenhouse gases emitted by the hard-to-abate sectors pose major challenges, as they can remain in the atmosphere from a few years in some cases to many thousands of years in others. While in other sectors emissions can be reduced through the transition to cleaner technologies, such as renewable energy, emissions from the hard-to-abate sectors are characterised by the difficulty of avoiding the production of greenhouse gases.

Which sectors are hard to decarbonise?

The hard-to-abate or hard-to-decarbonise sectors represent a major challenge for emission reductions due to their high dependence on fossil fuels and the complexity of their industrial processes. In heavy-duty transport, vehicles emit a quarter of the entire transport sector's CO₂; in heavy industry, the production of steel, cement and chemicals requires high temperatures that generate emissions. What’s more, sectors such as aviation and shipping, which are critical to the global economy, present difficulties for the transition to cleaner energy alternatives due to the energy density required.

1 Heavy industry

In this sector, the production of steel, cement and chemicals produces hard-to-abate emissions, both from the energy that is required to produce the high temperatures needed for these processes, as well as the chemical reactions involved. Clinker, for example, is one of the main ingredients in cement. It is produced by heating limestone to extremely high temperatures, an action that releases the carbon in the stone. This element then combines with oxygen in the atmosphere, forming the greenhouse gas carbon dioxide (CO₂).

2 Aviation

Passenger planes and cargo aircraft require highly energy-dense fossil fuels, such as kerosene. According to Irena, the global aviation sector accounted for 10% of the world’s transport-related energy consumption in 2022, and 3% of total global energy consumption. As a result, the sector is a major contributor to CO₂ emissions, equivalent to 2 to 3% of global emissions and 10% of all transport-related emissions, according to Irena. The formation of contrails – vapour trails composed of water in the form of ice crystals – from plane engines also contributes to global warming, as they trap radiation from the Earth and reflect solar radiation.

3 Shipping

The shipping sector is currently very dependent on low-grade fossil fuels such as heavy fuel oil (HFO) and marine diesel oil, but is actually among one of the least carbon-intensive modes of transport. That said, the sector is still a major emitter of greenhouse gases given its sheer scale. Shipping accounts for 3% of total global energy consumption, and 10% of all transport-related energy consumption, according to Irena.

4 Heavy-duty trucking

Vehicles used for transporting goods emit almost a quarter of all the carbon dioxide emissions from the transport sector, outstripping the international aviation and shipping industries combined. Heavy-duty trucks use almost exclusively energy-rich fossil fuels such as diesel, petrol and natural gas.

SEE INFOGRAPHIC: Which sectors are hard to decarbonise? [PDF]

Characteristics and challenges of hard-to-decarbonise sectors

Challenges for heavy-duty trucking

Biofuels account for just 5% of consumption within the sector, with a wider deployment of such fuels needed to help bring down emissions. Greater efficiencies also need to be found, as well as the introduction of other fuels such as biodiesel or renewable diesel. The types of batteries used in electric cars are not currently being adopted in trucks on a widespread basis, with greater technological advances needed before this becomes a reality, as well as the creation of a charging infrastructure.

Challenges for heavy industry

The difficulty in heavy industry in terms of reducing emissions lies in the need for renewable power generation on site, increased efficiencies and greater recycling of scrap in the case of steel production.

Challenges for aviation

The limited choice of usable fuels and the immaturity of alternative aircraft technologies, such as electric or hydrogen-powered aircraft, limit the decarbonisation pathways available to the sector. Just 450 million litres of sustainable aviation fuels were consumed in 2022, which is the equivalent of just 0.1% of global aviation fuel consumption.

Challenges for shipping

Shipping is another hard-to-abate sector where global demand is expected to rise, anywhere between 40 and 50% from 2020 to 2050. This will mean that greater efficiencies will be needed along with alternative fuels and policies aimed at controlling that demand if hard-to-abate emissions for the sector are to be reduced.

Decarbonisation of hard-to-abate industries, a key step towards the energy transition

What is decarbonization?

Climate change is today's greatest environmental challenge, and social concern about it grows year by year. The 2015 Paris Agreement was a decisive move to action, since 195 nations approved the limiting of the increase in global temperature to 2 ºC by the end of the century compared to pre-industrial levels and the pursuance of efforts to reduce it to 1.5 ºC.

Find out more about decarbonization

Energy transition: Driving a sustainable transition

We need policies and actions for an energy transition. The fight against climate change is one of the most important challenges that humanity must face in the 21st century.

Discover the energy transition

What is decarbonization?

Climate change is today's greatest environmental challenge, and social concern about it grows year by year. The 2015 Paris Agreement was a decisive move to action, since 195 nations approved the limiting of the increase in global temperature to 2 ºC by the end of the century compared to pre-industrial levels and the pursuance of efforts to reduce it to 1.5 ºC.

Find out more about decarbonization

Energy transition: Driving a sustainable transition

We need policies and actions for an energy transition. The fight against climate change is one of the most important challenges that humanity must face in the 21st century.

Discover the energy transition

How can hydrogen play a role in hard-to-abate sectors?

Hydrogen is likely to play a key role in reducing emissions within hard-to-abate sectors, and achieving the objectives of the Paris Climate Agreement. The element, which is colourless, odourless and highly flammable, gives off no emissions when it burns, and could be key to decarbonising hard-to-abate sectors such as aviation, and steel and cement manufacturing.

Hydrogen can also be used to produce ammonia, a chemical that is a key component of fertilisers. Currently, ammonia is produced using fossil fuels, but substituting them for hydrogen could reduce the emissions from the agricultural sector by decarbonising fertiliser production.

What’s more, ammonia could be used as a fuel in existing marine engines. Given that it burns without producing emissions, it could also be an alternative fuel in the hard-to-abate sector of shipping, replacing polluters such as heavy fuel oil.

In industry, hydrogen could replace fossil fuels, given that it can be used to produce high temperatures needed in kilns used during the process of making cement. Hydrogen could also replace the coal used in blast furnaces for the iron ore reduction process that is essential to making steel.

The production of hydrogen, meanwhile, can also be done cleanly. Renewable energy can be used to produce the element via electrolysis.

A combination of technological advancements and government policies will be needed if clean hydrogen is to be adopted in hard-to-abate sectors, shifting them away from fossil fuels.

The challenges of using hydrogen in hard-to-abate sectors

According to the United Nations Economic Commission for Europe (UNECE), a lack of government policies is preventing an increased demand for hydrogen, and this is needed before the value chain for the fuel can grow. The International Energy Agency, meanwhile, reports that just 5% of announced hydrogen projects make it to the final investment decision.

There are, according to UNECE, concerns about the cost, technological challenges, risks, regulatory environment, geopolitical uncertainties and the lack of infrastructure needed to deliver hydrogen to end users. Currently, just 0.1% of hydrogen demand is for new applications in heavy industries, when this figure would need to be 33% by 2030 in order to meet the Net Zero target for mid-century.

Other challenges include regulatory fragmentation. According to a report from international law firm White & Case, in Europe there are jurisdictional variations in everything from planning and competition laws, to specifications for pipelines, all of which can be an obstacle for implementing hydrogen investments.

Cost is another factor, with a huge gap between the expense of producing renewable hydrogen, and low carbon or traditional fossil fuel hydrogen.

Do you know the possibilities of green hydrogen?

Find out more

Our commitment to decarbonisation in hard-to-abate sectors

The future of hard-to-abate industries and sectors

Technology is going to play a key role in the future of hard-to-abate industries and sectors if emissions are to be brought down. These new advances will likely include more advanced biofuels or carbon-capture processes, and there will need to be attempts to limit demand for commodities from these industries. Here are some examples of the changes that could be seen in a bid to reach net zero in these areas.

Transport

Heavy-duty trucks account for almost a quarter of carbon dioxide emissions within the entire transport sector, and currently rely almost exclusively on diesel, petrol and natural gas. Activity by these vehicles is expected to more than double by 2050, according to Irena. To address this hard-to-abate industry, a shift from road- to rail-based transport is a possibility, as well as the use of biofuels and the adoption of electric vehicles. Trucks that run on green hydrogen could also be part of the future, but currently are not economical nor sufficiently technologically advanced to be a viable option right now.

Industry

Direct electrification could play a role in decarbonising primary steel production, according to Irena. This could be done by using high- or low-temperature electrolysis to reduce iron ore. What’s more, hydrogen could be used as part of a direct iron reduction (DRI) process, reducing emissions by as much as 95%. This technology is already becoming widely accepted as an alternative within the industry. Carbon-capture processes are also likely to play a key role in controlling greenhouse gas emissions in the industry sector as a whole.

Chemicals and petrochemicals

The raw materials needed to make plastics are known as high-value chemicals (HVCs), and demand for them has been increasing steadily over the past decade. Some 90% of plastics are still made from fossil feedstocks, according to Irena, with production of primary chemicals from them accounting for 72% of the total CO₂ emissions for the entire chemical and petrochemical industry. To address this issue, more can be done to reduce plastic waste, with most currently either ending up in landfill, being mismanaged or even incinerated. Decarbonisation in the plastics industry can be achieved by higher recycling levels, finding alternatives to fossil fuels such as biomass as a feedstock, higher energy efficiency and the use of renewable-based electricity.

Aviation

Demand for aviation services could double from 2022 levels by 2050, meaning that urgent decarbonisation measures are needed to reduce emissions in this hard-to-abate sector. These could include the use of advanced biofuels, the adoption of synthetic fuels such as green hydrogen or e-kerosene, or even electric propulsion technologies and hybrid aircraft.

Shipping

The shipping industry is not only a major consumer of fossil fuels, but also a means to transport them. What’s more, ships are assets with a very long useful life. This means that there is an urgency within the sector to transition to vessels that make use of renewable energies in the coming years, in order to reach the net-zero goals of 2050, as these ships will be in service for decades to come. Electric propulsion, biofuels and e-fuels are all possible paths for the sector, and even nuclear propulsion using technologies that until now have been limited to military uses such as submarines.

More about hard-to-abate sectors