Only 9% of hydrogen projects have reached FID. (image source: Adobe Stock)
A new report from the UK’s Energy Industries Council (EIC) finds that energy industry confidence in reaching global net-zero targets is declining sharply, with policy instability, financial uncertainty and slow project approvals cited as obstacles to progress
Only 16% of senior energy executives interviewed for the EIC’s Net Zero Jeopardy Report II now believe the world can achieve net zero by 2050, down from 45% last year, with growing concerns over the lack of clear regulatory frameworks, underinvestment in clean technologies and delays in bringing projects to the final investment decision (FID) stage. Only 14% of respondents believe their country will meet 2030 climate goals, down from 16% in last year’s report. Globally, 5% believe interim targets will be met, compared to 11% a year ago.
A key issue is financing, with investors cautious about backing new clean technologies, particularly in sectors such as hydrogen, carbon capture and storage, and grid infrastructure. Executives say that while the private sector is willing to invest, the absence of long-term, stable policies creates financial risk.
The report points out that rates for clean energy projects remain very low. Despite ambitious targets, only 10% of offshore wind projects and 9% of hydrogen projects have reached FID, compared to 21% for upstream oil and gas. In the UK offshore wind sector, for example, lengthy permitting processes, grid access constraints and an uncertain investment climate are factors behind the slow pace of new projects moving from planning to construction.
Supply chain vulnerabilities
The report also highlights concern about supply chain vulnerabilities, particularly in clean technology manufacturing and logistics, pointing out that the reliance on China for many renewable energy project components raises concerns about energy security, trade policy, and supply chain resilience. There are also concerns about manufacturing capacity and skills availability.
“The energy industry is facing real challenges in turning pledges into projects,” said Stuart Broadley, EIC CEO. “Business leaders are not seeing the level of policy certainty or investment required to deliver net-zero ambitions. We need a lot of immediate reforms that speed up licensing processing and cut other red tape, ensure consistent policy and regulation, have the right financial incentives.”
“The data leaves no room for optimism—confidence in net-zero targets is collapsing across the energy sector,” said Mahmoud Habboush, author of the Net Zero Jeopardy II report. “Industry leaders are not merely expressing frustration, they are passionately warning about fundamental barriers, including unstable policy, weak investment appetite, and slow project approvals. And these barriers, if left without tackling, will no doubt derail the energy transition.”
“For many, one clear path toward net zero is ensuring that energy projects are commercially viable. For that to happen, work needs to be done on the demand side, including facilitating a regulatory environment conducive to creating demand. This will make banks less apprehensive, and more capital will flow.”
