Hard-to-abate sectors — manufacturing, long-distance transport, aviation, data centres and the built environment — account for a significant portion of global greenhouse gas emissions. Their deep reliance on fossil fuels, high-temperature industrial processes, and dispersed infrastructure make them resistant to conventional decarbonisation levers. Yet, through smart policy, scalable technologies, and cross-sector collaboration, these sectors are beginning to carve out viable transition pathways.
Each of these technologies targets a specific sectoral challenge. Renewable diesel, or hydrotreated vegetable oil (HVO), can cut lifecycle emissions by up to 80% and is already in widespread use across the US and EU. Crucially, it requires no engine modification — making it a compelling short-term solution for heavy freight fleets, including in regional Australia.
Green hydrogen is advancing rapidly as a fuel for high-heat industrial applications like steelmaking, particularly through hydrogen-based direct reduction of iron (H₂-DRI).
Despite momentum, hard-to-abate sectors continue to face persistent barriers:
Prasad pointed to three measures that can unlock progress: blended public-private funding (such as Australia’s Hydrogen Headstart), offtake guarantees or fuel mandates, and open-access modelling tools to de-risk investment decisions. PFHN is currently developing such tools to support shared decision-making.
Electrification of transport is gaining traction across both regional and long-haul freight. Battery electric trucks are already being rolled out commercially by Tesla, Volvo, and Daimler, particularly for regional haulage. For longer routes, green hydrogen fuel cell trucks — like Hyundai’s XCIENT — offer faster refuelling and extended range, though infrastructure remains a limiting factor.
In aviation, SAF is central. Qantas, for instance, has committed to sourcing 20 million litres per year of SAF from California’s Aemetis starting in 2025 and up to 500 million litres annually from 2028, in deals tied to new aircraft orders. Electrification is also emerging for short-range flights, with models like Aviation Alice and Heart Aerospace in early development. Long-term, hydrogen aircraft such as Airbus’s ZEROe concept are expected to enter the market by 2035.
“SAF is gaining traction through recent CEFC-backed reports, emerging pilot projects, and federal government interest,” said Prasad. “Jurisdictions with mandates or credits — such as the EU’s ReFuelEU and US Inflation Reduction Act — are showing how targeted policy support can make SAF commercially viable.”
Companies like Neste and World Energy are producing SAF at commercial volumes, with major airlines such as United, Lufthansa and KLM using it for scheduled flights. Los Angeles International Airport (LAX) and San Francisco (SFO) have integrated SAF into their supply chains, achieving lifecycle CO₂ reductions of up to 80% per litre of fuel. These advances have been enabled by long-term offtake agreements and regulatory frameworks such as California’s Low Carbon Fuel Standard and US tax incentives under the IRA.
In the US freight sector, UPS and Walmart have adopted renewable diesel at fleet scale, achieving 10–20% reductions in emissions without vehicle retrofits. In maritime shipping, Amon Maritime in Norway is building ammonia-fuelled vessels and bunkering infrastructure in collaboration with Yara and the Port of Oslo, showcasing the operational feasibility of green ammonia as a clean shipping fuel.
“Together, these examples underscore that when technology, investment, and policy align, even hard-to-abate sectors can make meaningful carbon reductions today — not just by 2030,” Prasad said.
Dr Ashak Nathwani, author, engineer, and sustainability efficiency expert, highlights that the building sector, which contributes approximately 35–40% of global energy-related emissions, remains both a major challenge and a major opportunity.
Electrification is key. “The electrification of heating and hot water systems is a game-changer. Heat pumps are leading the transition,” said Nathwani. These systems are three to five times more efficient than gas boilers and are already widely adopted across the EU, US, Japan, and Australia. “When powered by renewables, these solutions approach zero emissions,” he added.
“Buildings can be more than energy users — they can become energy producers, carbon sinks, and climate solutions. The tools are here. The blueprint is clear. What’s needed now is scale and speed,” Nathwani said.
Decarbonising hard-to-abate sectors requires collaborative delivery models. Prasad stresses:
"Cross-sector collaboration is not optional — it’s foundational. Hard-to-abate sectors intersect with energy producers, infrastructure providers, industrial users, and regulators. No single entity can deliver a viable project in isolation.”
For example, the Hunter Valley Hydrogen Hub in NSW, a joint effort between Orica and the NSW Government, aims to produce green hydrogen for industrial use, co-located with renewables and end users. ARENA’s Hydrogen Hubs Program supports multiple such consortia across the country, while the NSW Decarbonisation Innovation Hub brings together 10 universities, multiple agencies, and networks like PFHN to align R&D with policy and pilot deployment.
“These hubs are designed not only for production, but also for shared learning, workforce training, and community engagement,” said Prasad.
The decarbonisation of hard-to-abate sectors is no longer a far-future ambition—it is unfolding now, with proven examples across aviation, buildings, heavy transport, and industry. Yet, challenges remain.
As Nathwani aptly put it, “The good news is that proven technologies that reduce emissions cost-effectively and at scale are already reshaping how we heat, cool, and power our buildings.”
What’s needed now is sustained investment, regulatory certainty, and cross-sector coordination to scale these solutions at speed. The blueprint is there. The race is on.