Alongside 53% of respondents in a 500-strong survey of senior executives who have not yet set targets, only 30% of executives believed that their decarbonisation budget will be “at least adequate” to support their goals, according to the Hard to abate, ready to start report.

Moreover 54% said the financial squeeze from supply chain constraints, high energy prices for energy buyers and market pressure to keep costs low made it difficult for companies to justify investment in decarbonisation.

Cutting emissions from heavy industries requires new infrastructure, value chains, and technology, which all require investment.

That is a challenge when many industrial and transport companies are still trying to recover financial losses from the economic activity slump from the Covid-19 pandemic.

The steel industry alone is estimated to need more than US$200bn to transition steel assets to Net Zero compatible technologies, and between $5.2trn-6.1trn to set up enabling infrastructure by 2050, including carbon capture and green hydrogen supply.

The aviation sector, meanwhile, will need about $300bn each year between 2022 and 2050.

For 63% of respondents, the main motivations to decarbonise are business-critical reasons, such as remaining financially competitive and mitigating the future cost of a carbon border tax.

Yet only 24% of those surveyed expect to receive financial support from their government to achieve decarbonisation goals and targets.

“That is a problem, because to implement costly infrastructures such as electric arc furnaces or CCUS for industries such as steel and cement, companies need funding partners to de-risk their investments – similar to the subsidies and tariffs solar and wind energy received to make them competitive,” it states.

However the report found 70% expect to spend more on decarbonisation over the next two to three years, with public and private sectors working closer together.

The International Energy Agency (IEA) estimates in its Net Zero pathway that nearly half of the carbon dioxide (CO2) emissions savings by 2050 will depend on technologies such as hydrogen electrolysers and direct air capture and storage, which are not available on a commercial scale today.

The slow progress on both blue and green hydrogen may be down to the business case weakening amid record-high gas and electricity prices.

The cost of producing blue hydrogen, for instance, is now 36% higher than the UK government estimated in 2021. Nearly half (43%) said that the spike in energy prices has made green hydrogen less attractive.

There is more optimism in MENA and North America about the business case for low-carbon technology than in all other regions, the report found.

In the US, the Inflation Reduction Act, could signal a shift towards prioritizing investment in a Net Zero economy.