Decarbonizing Hard-to-Abate Heavy Industries

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  Science and Technology on Tue, Sep 08th, 2026 by The Financial Times

The Challenge of Hard-to-Abate Industries

A significant portion of global emissions originates from heavy industries such as steel, cement, and chemical production. These sectors are labeled "hard-to-abate" because they require extremely high process heat—often exceeding 1,000 degrees Celsius—which cannot be achieved through current electrification methods.

In steel production, the traditional reliance on coking coal serves a dual purpose: providing heat and acting as a reducing agent to remove oxygen from iron ore. The technological shift here involves replacing coal with hydrogen. Green hydrogen, produced via electrolysis powered by renewable energy, allows for the production of "green steel," where the byproduct is water vapor rather than carbon dioxide. However, the scalability of this transition depends heavily on the availability of low-cost, renewable electricity and the build-out of hydrogen infrastructure.

Cement production presents a different chemical hurdle. A large percentage of cement emissions are not from fuel, but from the chemical reaction itself—calcination—where limestone is heated and releases CO2 as a byproduct. For this sector, the focus is less on fuel switching and more on Carbon Capture and Storage (CCS), where emissions are trapped at the source before they enter the atmosphere.

The Hydrogen Spectrum

• Green Hydrogen: Produced by splitting water into hydrogen and oxygen using renewable electricity. This is the gold standard for sustainability but currently remains the most expensive option.

• Blue Hydrogen: Produced from natural gas through steam methane reforming (SMR), but with the resulting CO2 captured and stored underground. This is viewed as a bridge technology to build out infrastructure while green hydrogen costs drop.

• Grey Hydrogen: The current industry standard, produced from natural gas without carbon capture, contributing significantly to global emissions.

Carbon Capture and Removal

Hydrogen is frequently cited as the "Swiss Army knife" of decarbonization, but its utility is contingent on its source. The industry distinguishes between various "colors" of hydrogen to denote the carbon intensity of production

As the window to limit global warming to 1.5?© narrows, it has become evident that reducing emissions alone may be insufficient. The focus has expanded to include Carbon Capture and Storage (CCS) and Direct Air Capture (DAC).

CCS focuses on point-source emissions, catching CO2 at the smokestack of a factory or power plant. In contrast, DAC seeks to scrub CO2 directly from the ambient air. While DAC is theoretically more flexible because it can be located anywhere, it is energy-intensive and currently prohibitively expensive for wide-scale deployment without significant government subsidies or high-value carbon credit markets.

Grid Stability and Energy Storage

The inherent intermittency of wind and solar power necessitates a revolution in energy storage. Lithium-ion batteries are effective for short-term storage (hours), but the grid requires long-duration energy storage (LDES) to manage seasonal variations.

Emerging technologies include flow batteries, thermal energy storage (storing heat in molten salts or bricks), and compressed air energy storage. These technologies aim to transform the grid from a "just-in-time" delivery system into a resilient network capable of buffering energy for days or weeks at a time.

The Financial "Valley of Death"

Despite the technological promise, many climate tech innovations face a structural financial gap known as the "valley of death." This is the period between a successful laboratory prototype and the achievement of commercial scale. Because climate tech often requires massive physical infrastructure (First-of-a-Kind plants), it cannot be funded by venture capital alone, which typically favors software with low overhead.

Closing this gap requires a combination of government policy—such as the Inflation Reduction Act in the United States or the EU Green Deal—and blended finance models where public grants reduce the risk for private investors. The transition to a decarbonized economy is thus as much a feat of financial engineering as it is of chemical or electrical engineering.