The market alone will not fix harder-to-abate sectors

Stronger policies and regulations are needed

In many harder-to-abate sectors, like heating of buildings, high-heat processes in industry and heavy transport, progress with decarbonization, including efficiency gains, has been slow and has fallen well short of what is required by the Paris Agreement. The technology and solutions to decarbonize these sectors exist (e.g. hydrogen and Carbon Capture and Storage, CCS), but implementation has been patchy, with only a handful of solutions applied at scale.

For hard-to-abate sectors, near-term policy mechanisms in the form of e.g. Research and development funding, economic incentives for piloting and implementation, performance standards and mandates, are urgently needed to mature solutions and bring these to commercial readiness. Nationally Determined Contributions (NDCs - each country's own targets and contributions toward the Paris Agreement), now due for renewal, should significantly strengthen these areas.

Energy efficiency can greatly reduce energy demand in most sectors, but split incentives and lack of regulations prevents progress which, from a societal perspective, can come at low or even negative costs.