Putting industry’s CO2 emissions on a net-zero pathway requires a significant scaling-up of low-carbon technologies deployment and related investments. Most of the needed technologies are at demonstration phase or early stages of commercialisation, and many of them are capital-intensive. To meet the objectives of the Paris Agreement, annual global investments for industry decarbonisation must increase by a factor of three to five over current levels by 2030. A majority of these investments will need to be financed from private sources and are located in emerging markets and developing economies (EMDEs) where most future industrial investment and emissions are expected to occur. The risks and costs associated with net-zero transition may reduce profits for companies. These challenges are exacerbated by limited access to finance or skills and a lack of enabling conditions including an investment-friendly business environment.
Policymakers and industry actors are increasingly aware of the importance of accelerating the decarbonisation of industry, and several initiatives are gaining traction. The Breakthrough Agenda was launched at COP26 to help the world close the collaboration gap and accelerate international action on climate change in major emitting sectors, including steel, hydrogen and cement and concrete. Launched at COP 28 in 2023, and comprising 46 members as of June 2025, the Climate Club is a high-ambition intergovernmental forum for exchange on industry decarbonisation and serves as an enabling framework for increased collective action across diverse geographies. The Science Based Targets initiative (SBTi) highlights that as of August 2024, more than a thousand companies have set net-zero targets globally, although less than 3% of them are based in Africa.
At COP29, in a Global Pledge on Scaling international assistance for industry decarbonisation, the governments of the United Kingdom, the Federal Republic of Germany and Canada announced scaling up their support for industry decarbonisation efforts in EMDEs, and the Climate Investment Funds’ Industry Decarbonisation Investment Programme announced its plans to deploy up to USD 1 billion in concessional finance. These efforts aim to catalyse additional pledges from governments and philanthropies and mobilise investments from private sector in the lead up to COP30, as the average yearly finance needs by 2030 to decarbonise the industry sector amount to around USD 500 billion.
Building on fruitful co-operation between the Government of South Africa and the Organisation for Economic Co-operation and Development (OECD), this report supports South Africa’s efforts to realise its industry’s net-zero transition. It identifies barriers to investment and formulates recommendations for improving the enabling conditions and developing financing solutions to scale up finance in low-carbon technologies in the South African iron and steel sector.
This report builds on the approach proposed in the OECD Framework for industry’s net-zero transition. It is one of the key outputs of the OECD Clean Energy Finance and Investment Mobilisation (CEFIM) programme. The CEFIM programme aims to support governments in emerging markets and developing economies to strengthen domestic enabling conditions to attract finance and investment in renewables, energy efficiency and decarbonisation of industry.