Why hard-to-abate decarbonisation remains unresolved
Hard-to-abate decarbonisation remains one of the most complex and least resolved pillars of Europe’s energy transition. According to EU-level data, industry as a whole accounts for around 25% of final energy consumption and roughly 19% of total greenhouse gas emissions. Within this perimeter, four sectors – steel, cement, ammonia and aluminium – account for 7.7% of final energy demand and 9.7% of overall emissions.
These sectors are central to Europe’s economy, yet they are also where emissions reduction faces the most stringent constraints. A significant share of emissions does not stem from fuel combustion, but from the chemistry of production processes themselves.
For this reason, even under scenarios of rapid renewable deployment, hard-to-abate decarbonisation cannot be automatic nor rapid.
Steel, cement and chemicals: the main obstacles
The report Europe’s Environment: State and Outlook 2025, published by the European Environment Agency, clarifies that hard-to-abate sectors are defined by process emissions, meaning emissions that arise directly from the chemical reactions required to produce materials.
In cement production, for example, CO₂ is released during limestone calcination, regardless of the energy source used. In steelmaking, the reduction of iron ore generates emissions intrinsic to the production process. This distinguishes these industries from sectors where emissions are almost exclusively linked to fossil fuel combustion.
As a result, hard-to-abate decarbonisation requires interventions that reshape the structure of industrial processes, not merely a shift in energy sources.
Why direct electrification is not enough
The European Environment Agency highlights electrification as a central lever of the transition. However, it encounters physical and technological limits in high-temperature industrial processes and in basic chemical reactions.
This is confirmed by the study Decarbonization of Energy Operations for Hard-to-Abate Industries, published in Clean Energy. The research shows that in energy-intensive sectors, renewable electricity alone is insufficient to eliminate process emissions.
Even in fully decarbonised power systems, a significant share of emissions remains unchanged. Hard-to-abate decarbonisation therefore requires integrated solutions that go beyond electrification, including process innovation, new materials and deep transformation of industrial plants.
The structural limits of hard-to-abate decarbonisation
A report by Allianz Research provides a quantitative assessment of these constraints. In the cement sector, around 53% of total emissions are directly linked to limestone calcination.
Even if all available measures are adopted – energy efficiency, fuel switching, clinker substitution – a residual 35–40% remains difficult to eliminate. In ammonia production, approximately 0.18 tonnes of hydrogen and 0.82 tonnes of nitrogen are required per tonne of output, with direct emissions reaching up to 4 tonnes of CO₂ per tonne produced.
These figures illustrate why hard-to-abate decarbonisation cannot avoid a profound rethinking of supply chains and core technologies.
The role of hydrogen and CCUS
According to the European Environment Agency, less than 1% of hydrogen currently produced in Europe is low-emission. This underlines that hydrogen remains scarce and costly, and should be prioritised for sectors that cannot be directly electrified.
Guidelines from the Italian Energy Services Manager (GSE) and scientific analyses converge on the view that low-emission hydrogen and carbon capture, utilisation and storage are necessary but not sufficient. Hard-to-abate decarbonisation requires selective and strategic deployment of these technologies, avoiding inefficient or blanket applications.
A systemic challenge
A study published in Renewable and Sustainable Energy Reviews, titled Energy modelling challenges for the full decarbonisation of hard-to-abate sectors, highlights how traditional energy models struggle to accurately represent industrial decarbonisation pathways.
The barriers are not only technological but systemic: value chain integration, infrastructure availability, and coordination between energy and industrial policy. This reinforces the idea that hard-to-abate decarbonisation cannot be planned using tools designed for other sectors and requires dedicated, integrated approaches.
Infrastructure and investment bottlenecks
The European Environment Agency cites the example of the steel plant under construction in Boden, Sweden, designed to produce 5 million tonnes of steel per year with emissions reduced by up to 95%. In this case, slow infrastructure development, particularly for hydrogen, limits the replicability of such projects.
Allianz Research estimates investment gaps exceeding $2 trillion for steel and $1.2 trillion for ammonia, with annual investment growth rates of 8% and 11% respectively. These figures show that hard-to-abate decarbonisation is not only a technological challenge, but also a long-term economic and industrial transformation.