Confidence in achieving global net zero targets by 2050 has plummeted within the energy industry, with only 16% of senior energy executives now believing the ambition is realistic – a stark drop from 45% last year.
That’s according to the Energy Industries Council’s (EIC) latest Net Zero Jeopardy Report II, which reveals mounting frustration over policy uncertainty, underinvestment in clean technologies, and slow project approvals.
“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.”
The report indicates a particularly bleak outlook for meeting interim 2030 climate goals, with only 14% of respondents believing their country will fulfil these targets – down from 16% a year ago. Globally, just 5% think the world is on track to meet mid-decade objectives.
Broadley continued, “In the UK, if the government is serious about achieving its interim targets, it needs to listen closely to what the supply chain is saying. The message isn’t a very happy one. 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.”
Planning hurdles continue to drag down industry confidence
According to the EIC, one of the biggest hurdles is the significant lag between project planning and final investment decisions, with slow approvals stalling the deployment of new clean energy infrastructure. While the UK has historically enjoyed success in offshore wind, those projects reflect investment decisions taken a decade ago – casting doubt on the future pipeline of developments.
It has long been acknowledged that the planning system has caused untold delays in building new energy infrastructure in the UK, something the current Labour Government has vowed to solve in its upcoming Planning and Infrastructure Bill in March. While exact details about what will be in the bill remain unknown, the Starmer Government has revealed slightly updated planning rules targeting renewable energy infrastructure, while nuclear projects are also set to get an easier ride in the new planning system.
Despite these initial promises, the industry remains unconvinced. “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.”
Is investment appetite in net zero waning in the wake of global policy shifts?
Executives point to a cautious approach from investors, who remain apprehensive about backing emerging technologies such as hydrogen and carbon capture and storage. The report finds that only 10% of offshore wind projects and 9% of hydrogen schemes have reached final investment decisions, compared with 21% of upstream oil and gas.
“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,” concluded Habboush.
Beyond funding and policy, the study highlights additional challenges in clean tech manufacturing. Many renewable energy components, from wind turbines to battery systems, are still sourced from China, raising questions over energy security, trade risks and supply chain resilience. That reliance could become an even bigger issue if global deployment ramps up without increased manufacturing capacity and skills training – especially if the US’ trade war sparks a wider fallout across the globe.
