Energy industry confidence in reaching global net-zero targets is fading as policy instability, financial uncertainty and slow project approvals continue to hinder progress, according to a report by the Energy Industries Council (EIC).
The Net Zero Jeopardy Report II found that only 16% of senior energy executives interviewed now believe the world can achieve net zero by 2050, down from 45% last year.
The report, based on interviews with EIC member companies mostly based in the UK, points to 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.
Stuart Broadley, EIC chief executive, said: “The energy industry is facing real challenges in turning pledges into projects.
“Business leaders are not seeing the level of policy certainty or investment required to deliver net-zero ambitions.
“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.”
Confidence in interim net-zero targets is even lower.
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.
Mahmoud Habboush, author of the Net Zero Jeopardy II report, said: “The data leaves no room for optimism-confidence in net-zero targets is collapsing across the energy sector.
“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.”
The offshore wind sector highlights the challenges in scaling up clean energy. Current installations in the UK and Europe are largely a result of investment decisions made a decade ago, which raises serious concerns over whether future targets will be met.
The slow pace of new projects moving from planning to construction is linked to lengthy permitting processes, grid access constraints and an uncertain investment climate.
A key issue is financing. Investors remain cautious about backing new clean technologies, particularly in sectors such as hydrogen, carbon capture and storage, and grid infrastructure.
Report respondents 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.
Respondents also raised concerns about supply chain vulnerabilities, particularly in clean technology manufacturing and logistics.
The report notes that many components for renewable energy projects, including wind turbines and battery storage systems, are sourced from China, which increases reliance on a single market.
While China’s dominance has lowered costs, it raises concerns about energy security, trade policy, and supply chain resilience.
There are also concerns about manufacturing capacity and skills availability, especially when more planned cleantech projects enter the construction phase.