Decarbonization budgets are a significant source of concern, with less than a third of executives from ‘hard-to-abate’ industries saying they have adequate budgets to finance their decarbonization efforts, a recent report by renewable energy company Masdar has found.

The report said 60% of the organizations who are taking steps to reduce their emissions have not even yet set net-zero targets, with reliable financing being the main barrier to accelerating commitments.

While challenging, the report finds that half of the industry leaders are more confident than earlier that net zero in their business is more achievable today compared to a few years ago.

The report called on governments to boost support and increase financing to support the goal of decarbonization.

The Masdar report said reducing emissions in hard-to-abate industries like cement, steel, aluminum, petrochemicals, shipping, aviation, heavy industry, and manufacturing was crucial in the effort to mitigate climate change.

Reliable Finance Remains a Major Barrier

Despite strong progress across the sector over the past decade, 60% of organizations surveyed across Europe, Asia-Pacific, the Middle East, and North America cite a lack of reliable finance as the main barrier for committing to targets.

Senior executives from the Middle East (83%) and Asia-Pacific (62%) highlighted that they were taking steps to reduce emissions but had not set a target date for completion.

Further, only 30% of senior executives indicated their budgets would be able to meet decarbonization needs. More than 50% were concerned about the impact of global economic headwinds on decarbonization investment.

In addition to financing hurdles, the report also highlighted the disparity in available technologies to accelerate decarbonization.

The research outlines the gap in “frontier” technologies available at a commercial scale, which delays the energy-intensive industries in ramping up decarbonization efforts.

Mohamed Jameel Al Ramahi, Chief Executive Officer of Masdar, said, “Masdar, a global clean energy powerhouse, will continue to play a leading role by fostering global collaboration amongst governments and private sector partners. We intend to seize the opportunity of utility-scale renewable energy and focus our investments in frontier technologies like sustainable aviation fuel and green hydrogen to help accelerate global progress ahead of COP28 and beyond.”

Only 24% of senior executives expected to receive funding from government or incentives, and 41% believe that without greater incentives and funding, they would be unable to meet their domestic market’s net-zero targets.

In January, the World Economic Forum (WEF) launched a fundraising vehicle to unlock $3 trillion of financing needed each year to reach net zero, reverse nature loss, and restore biodiversity by 2050. The vehicle would focus on attracting philanthropic resources toward the net-zero targets.

In the same month, a BloombergNEF report said investments in the low-carbon energy transition accounted for a record-breaking $1.1 trillion in 2022 and had reached parity with capital deployed for fossil fuel supply.