Sector Profiles
Decarbonization is reshaping every major sector. Explore the technologies, economics, and policy dynamics driving change across power, transport, industry, and the built environment.
The foundation of the energy transition
The power sector is undergoing the most rapid transformation of any major industry. Renewable energy sources now account for over 40% of global electricity generation, driven by dramatic cost reductions in solar photovoltaics and wind power over the past decade.
Solar PV costs have fallen approximately 90% since 2010, making it the cheapest source of new electricity generation in most markets worldwide. Onshore wind has followed a similar trajectory. These cost declines, combined with supportive policy frameworks and growing corporate procurement, have made renewable energy deployment self-sustaining in many regions.
Grid-scale energy storage is the next frontier. Lithium-ion battery costs continue to decline, while emerging technologies like iron-air and flow batteries promise to address longer-duration storage needs. The integration of variable renewables at scale requires rethinking grid architecture, market design, and system flexibility.
Electrification and the future of mobility
Transportation accounts for roughly a quarter of global energy-related CO2 emissions and is undergoing a fundamental technological shift. Electric vehicles have moved from early-adopter curiosity to mass-market reality, with global EV sales exceeding 20 million units in 2025.
Battery electric vehicles have reached cost parity with internal combustion engine vehicles in several segments, driven by lithium-ion battery pack prices falling below $100/kWh. China leads global EV adoption, followed by Europe and an accelerating North American market. Charging infrastructure deployment is scaling rapidly, though unevenly across geographies.
Beyond passenger vehicles, decarbonizing freight, aviation, and maritime shipping presents more complex challenges. Battery-electric solutions work for short-haul trucking, but long-distance freight and shipping are likely to require hydrogen, ammonia, or synthetic fuels. Sustainable aviation fuel (SAF) production is scaling but remains a fraction of total jet fuel consumption.
Decarbonizing the hardest-to-abate sectors
Heavy industry—steel, cement, chemicals, and aluminum—accounts for roughly 20% of global CO2 emissions and presents some of the most technically challenging decarbonization problems. These sectors require high-temperature heat, use carbon-intensive chemical processes, and operate in globally competitive markets where cost margins are thin.
Green hydrogen is emerging as a key enabler for industrial decarbonization, particularly in steelmaking where hydrogen-based direct reduced iron (H2-DRI) can replace coal-based blast furnaces. Several pilot plants are operational in Sweden and Germany, with commercial-scale production expected by the late 2020s.
Carbon capture, utilization, and storage (CCUS) remains relevant for process emissions in cement production, where CO2 is released from the chemical decomposition of limestone regardless of the energy source used. The economics of industrial CCUS are improving but remain dependent on carbon pricing and policy support in most jurisdictions.
Efficiency, electrification, and sustainable construction
Buildings account for nearly 40% of global energy consumption and around 30% of energy-related CO2 emissions when including construction. Decarbonizing the built environment requires action across two fronts: improving the efficiency of existing buildings and ensuring new construction meets net-zero standards.
Heat pumps are the most significant technology disruption in this sector. Global heat pump sales have been growing at over 10% annually, driven by policy mandates in Europe and cost competitiveness with gas boilers in many markets. Modern air-source heat pumps operate efficiently even in cold climates and provide both heating and cooling, making them versatile replacements for fossil fuel heating systems.
Building energy codes are tightening globally, requiring higher levels of insulation, airtightness, and on-site renewable generation. Embodied carbon—the emissions from manufacturing building materials and construction processes—is receiving increasing regulatory attention, with several jurisdictions now requiring whole-life carbon assessments for new developments.
Carbon pricing mechanisms, emissions trading systems, carbon border adjustments, and the regulatory frameworks shaping investment decisions across all sectors.
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