International Study Reveals Affordability Challenges of Deep Decarbonization for Key Industries
Table of Contents
published September 11, 2025
The Path to Net Zero: An Affordability Assessment
A new international assessment examines the industrial affordability of achieving deep decarbonization goals within member countries of the International energy agency (IEA). The study focuses on the economic implications of transitioning to net-zero emissions,particularly for industries with high carbon intensity.
A New Index for Measuring Affordability
Researchers developed a novel industry-specific index, denoted as A, to quantify the financial burden of deep decarbonization. This index represents the ratio of incremental energy costs resulting from decarbonization efforts to the value added by the industry. Industrial affordability is defined as existing when A is less than or equal to α, where α is a user-defined fractional threshold.
Key Findings: Carbon Intensity and Policy Impact
The assessment utilized carbon intensity data sourced directly from the IEA and effective carbon rates published by the Organisation for Economic Co-operation and development (OECD). Analysis revealed a clear correlation: industrial affordability decreases as an industry’s carbon intensity increases, as a country’s effective carbon rate rises, and as more ambitious deep decarbonization targets are set.
Unmitigated Net Zero: A Costly Proposition
The study highlights a critical concern: mandating net-zero emissions without accompanying mitigation strategies proves economically unsustainable for several carbon-intensive industries, even with a relatively lenient affordability threshold (α = 0.1). Specifically, the chemical products, coke and petroleum products, and basic metals sectors face notable affordability challenges.
Recommendations for a Feasible Transition
In alignment with the United Nations’ call for net-zero emissions, the research team recommends a politically feasible decarbonization strategy. This strategy emphasizes a gradual implementation approach, coupled with targeted exemptions and strategic subsidies to ensure public support and economic viability. A phased approach, rather than immediate and stringent mandates, is crucial for a accomplished and equitable transition.
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