Industrial Decarbonisation Faces Capital Gap Despite Available Technologies

GETEC's Chief Business Officer Rukmini Glanard argues that while technologies for decarbonising European industry are widely available, the financing frameworks required to mobilise capital at scale have not kept pace, leaving industrial decarbonisation as the missing middle of the energy transition. Industry accounts for one fifth of Europe's greenhouse gas emissions yet investment in factory electrification and heat decarbonisation remains far below what is needed.

Unlike the renewable energy sector, which has reached investment maturity through clear policy frameworks and standardised contracts, industrial decarbonisation projects are highly bespoke. Projects often require multiple technologies working together within live production environments, making risk assessment complex for lenders. Deep retrofits and system upgrades typically pay back over ten to fifteen years, with financial outcomes dependent on energy prices, production cycles, and daily operations — factors that create uncertainty and raise the cost of capital.

Three structural barriers impede investment: challenging project economics with long payback periods, fragmented and inconsistent policy frameworks across European markets, and carbon data that is not yet consistently investment-grade. Different emissions baseline methodologies, heavy reliance on manual reporting, and inconsistent verification practices limit investor confidence and make it difficult to group industrial projects into portfolios that institutional investors can assess and support.

Glanard proposes four solutions to unlock industrial decarbonisation finance: blended public and private finance structures to absorb early regulatory risk, standardised model agreements and shared due diligence frameworks to reduce bespoke contract requirements, financial instruments linking returns to verified carbon reductions such as Contracts for Difference for avoided emissions, and data standards that make carbon measurement as credible as financial reporting. These steps could transform industrial decarbonisation from a series of one-off projects into a scalable investment category.

Key figure — 20% of Europe's emissions