As heartening as the progress has been on electric power and transportation, we are more or less stuck in place with some other sectors of the economy. We turn now to two where relatively little headway is being made: the decarbonisation of the world’s buildings and its industry.

For more than a decade, many people have pinned their hopes for cleaning up industry on the development of a huge new enterprise to produce clean, ‘green’ hydrogen. In principle, hydrogen made without releasing emissions could substitute for fossil gas and other dirty energy in many factories. But over the past couple of years, the great bubble of hydrogen hope has finally burst.

We are now seeing cancelled projects, wasted public funds and recriminations around the world. At least 20 percent of the hydrogen projects on the drawing board in Europe have died recently,¹ and most of the others are on life support. The story is much the same in other industrial countries. The exceptions may be the United States, where some federal tax breaks for hydrogen projects were retained in the bill that slashed most other clean-energy subsidies, and China, where the government is pushing several large-scale projects. But even in those countries it is unclear how many hydrogen projects will really get off the ground.²

The basic problem is that green hydrogen, made without emissions, is still several times more expensive than dirty hydrogen made from fossil gas.³ At the prices that green hydrogen producers would need to charge, buyers are just not showing up, nor is it clear that costs can fall enough in the long term to make green hydrogen competitive. In retrospect, the bubble of enthusiasm for hydrogen may have cost us years in which industrial decarbonisation could have been pursued by more practical means. It may be no accident that much of the hype for a cleaned-up supply of hydrogen came originally from oil companies. If society could be sold on hydrogen as the essential pathway for cleaning up industry, that would have played to their expertise and given the oil majors a key role in the energy transition. Now, the hydrogen hype cycle is ending just as many of those same oil companies walk away from their own weak climate commitments.

Initially, the oil companies wanted to capture the emissions from dirty hydrogen production and bury them underground, although they invested little money and made little progress on the idea. The longer-term goal, in theory, was to use renewable electricity to make hydrogen by splitting water molecules into their constituent elements, oxygen and hydrogen. Hydrogen can burn cleanly and it can reach exceedingly high temperatures, so in theory, it would work in many industrial uses. Hydrogen is used in some plants today, but it is made from fossil gas in a way that throws carbon dioxide emissions into the air. Green hydrogen would not do that.

Some potential uses of green hydrogen still make sense, at least in locations where plentiful renewable energy is available — the steel industry, for instance, may have no choice but green hydrogen to clean up certain kinds of production.⁴ But green hydrogen was also being bandied about for many other uses that never made much sense. Some companies, for instance, fantasised about sending it through pipelines to heat homes, but heat pumps powered with electricity are far more efficient and, therefore, less costly.

With so many hydrogen plans in ruins, where does that leave us?

Practically no progress has been made in decarbonising heavy industry, even though everyone knows it has to be done. Governments, initially convinced by the hydrogen talk, have been slow to adopt other strategies that could help to get industry moving. Among the most useful tools would be ‘buy clean’ provisions, which are essentially performance standards requiring that a rising percentage of goods sold to the government itself be produced by clean methods. To cite one example, governments buy as much as a third of all the cement in the world, for roads, bridges and similar projects.⁵ If these large buyers declared that a percentage of the cement they buy must be made with climate-friendly methods, this would shake the cement industry from its lethargy. Such policies have indeed been adopted in a few places, and we are beginning to see a bit of movement, but there is a very long way to go. Clean production methods are available in many industries, but still in their earliest stages.

One potentially important development is that the chemical industry’s attention may be turning from hydrogen to one of its compounds: ammonia. This is a vital industrial chemical, used for many purposes — including a critical role in the world food supply as the basis for the most important type of fertiliser. The world’s ammonia production is now dirty, producing as much as 2 percent⁶ of global greenhouse gas emissions, but could be cleaned up using renewable electricity. Ammonia is a compound of nitrogen and hydrogen, but because it is a liquid instead of a gas, it is easier and cheaper to handle than hydrogen alone. Worldwide, more than 300 clean ammonia projects are on the drawing board,⁷ and a few have already gone into production. This may turn out to be a more promising pathway than green hydrogen.

Hydrogen is not the only example where the cleanup of the world’s industry is stuck in neutral. Hopes for a global treaty to control plastics pollution, and the emissions associated with production of virgin plastic, ran aground late last year in Busan, South Korea, when negotiators failed to bridge deep divides over the issue. Efforts this year to get the negotiations back on track failed again, in Geneva. The United Nations has not given up trying to bring a plastics treaty into existence, but fossil-fuel interests oppose it, and with Donald Trump in the White House, it is extremely unlikely the Americans will agree to adopt any treaty. China is the world’s largest plastic producer, using coal as its main feedstock — the dirtiest possible way to make plastic. Without a global treaty that limits production and requires improved recycling systems, global plastics production could increase 70 percent by 2040, compared to the level in 2020.⁸ Plastic is already an environmental catastrophe, polluting land and ocean and, in microscopic form, the human supply of food and water. Microplastics have been detected all over the world, in rainwater, agricultural soils and even Antarctic snow. The health consequences of ingesting microplastic, if any, are still largely unknown. Efforts to recycle plastic continue to falter. Despite decades of investment, only about 9 percent of global plastic waste is recycled.⁹ Much of it is incinerated, landfilled or exported — often to countries without adequate waste infrastructure. The plastics industry may account for more than 3 percent¹⁰ of global greenhouse gas emissions, large enough that getting this under control is a critical issue.

The fashion and clothing industry is yet another example of halting, inadequate progress. This is another industry that may represent 2 percent¹¹ or more of global emissions. With the advent of cheap ‘fast fashion,’ clothing consumption per person has been rising worldwide, yet much of this cheap clothing is disposed of after being worn for limited periods. An estimated 73 percent¹² of discarded clothing is landfilled or incinerated — a tragic waste of the water, cotton, land and fuels required to produce these goods. Despite token take-back schemes from some manufacturers, we have yet to figure out how to recycle most garment types back into garments. Of the small share of clothing waste that does make it into a recycling stream, most is ‘downcycled’ into insulation fibres, carpet backing, industrial rags or other low-value uses. Of the 3.3 billion tonnes of materials the clothing industry consumes each year, more than 99 percent comes from virgin sources.¹³

France, long associated with high fashion, is at the forefront of policy innovation to tackle the textile-waste problem. Key initiatives there include anti-waste legislation that prohibits the destruction of unsold textiles and promotes re-use, stricter environmental labelling requirements and a proposed advertising ban and surcharge on ultra-cheap garments. It is too early to know how successful these efforts will be at curbing the wasteful fast-fashion trend, but one country is trying, at least.

Buildings are another example where government policy is stuck in neutral, so that far too little progress is being made in cleaning them up. In the Dubai declaration that we mentioned earlier, governments committed themselves to doubling the rate at which the energy efficiency of buildings is improving, but they have not come anywhere close to achieving this. With just a few more years of delay, that pledge will look like another bit of unserious hypocrisy. Meanwhile, the number of buildings constructed in the world continues to grow at a steady pace, with two-thirds of them built in developing countries where construction standards are often weak. Investments in making buildings more energy-efficient need to rise sharply, but the International Energy Agency actually forecasts a decline in 2025.

The best policy tools are strong building codes, to ensure that newly constructed buildings use as little energy as possible, as well as performance standards for existing buildings, to require retrofits that drive down their emissions. The construction and real estate industries have fought these vociferously, unwilling to trade modest cost increases for themselves in the short run with large savings for consumers in the long run. Time after time, even in Europe, tough rules have been proposed and then watered down. Moreover, the effort to improve the world’s buildings is starting to run into a major headwind: the housing affordability crisis that seems to be spreading worldwide. California, long one of the world’s leaders in building efficiency, just passed a law freezing any new requirements on residential buildings for three years, out of concern that the energy standards were driving up costs.¹⁴

A fundamental tenet of the energy transition is that the burning of fossil gas in buildings needs to stop. A primary way to achieve this is to replace gas-powered boilers with heat pumps, which are essentially two-way air conditioners that can both heat and cool a building. Sales of heat pumps got a worldwide boost as the Ukraine war drove up the relative cost of fossil gas, but that factor has abated. With gas being more economically competitive, and with a slowdown in new construction, heat pump sales dropped 21 percent in Europe in 2024. However, the United States was still making headway last year, with heat-pump sales up 15 percent.¹⁵ This is, however, another market where we could see erosion as a result of Donald Trump’s policies. He is cutting federal tax credits that had encouraged Americans to adopt heat pumps.

Another important policy tool is strict efficiency standards for the devices that go into buildings, such as appliances. Huge gains have been made in improving the efficiency of refrigerators, for example. And the improvement in lights, with the transition from energy-wasting incandescent bulbs to modern fixtures based on light-emitting diodes, or LEDs, has cut the power use for lighting by as much as 80 percent.¹⁶ It is one of the greatest success stories of the energy transition. Yet again, Donald Trump is undoing some of the American policies that had led to progress on this front, but other countries are moving forward. We hope to see worldwide market pressure to continue making appliances more efficient.