In this episode of Navigating the Currents of Change, host Shaheen Chohan is joined by Joe Govreau, IIR’s Senior Vice President of Research Operations for the Metals & Minerals Industry. Together, they examine more than $10 trillion in ESG-related global projects and uncover what’s real, what’s stalled, and what’s next.
[Intro] (00:00):
Decarbonization has dominated the energy and industrial markets for more than a decade. We have almost $10 trillion of currently active ESG-related spending still active in the market globally, but we've also seen over $1.5 trillion in projects that have now paused or canceled. And so many are asking: is the energy transition slowing down, or is it simply changing direction?
Shaheen Chohan (00:44):
Welcome to Navigating the Currents of Change. My name is Shaheen Chohan and I lead Global Analytics here at Industrial Info Resources, a company recognized for over 40 years in delivering trusted industrial data, verified and constantly updated across more than 12 industries worldwide. Now, to help me answer that big question and many others, I'm delighted to be joined by Joe Govreau, Senior Vice President of Research Operations for our Metals and Minerals industry at IIR. Now, Joe works directly with our research and forecasting teams to track major capital projects, policy signals, and long-term investment patterns, especially around sustainability and industrial decarbonization.
Now, in this episode, we're taking a close look at the decarbonization landscape — what's being built, what's slowing down, and how the story is shifting across different sectors and different regions. So together, we'll break down what kinds of ESG and decarbonization projects are still moving forward, why we are seeing delays and cancellations certainly in some of those key sectors, and then we'll be looking at where companies are doubling down as they try and adapt to cost pressure, policy shifts and infrastructure constraints. So welcome, Joe.
Joe Govreau (02:11):
Thanks, Shaheen. Yeah, I think we're definitely seeing kind of a shift in the makeup of decarbonization spending. If you look at what the projects are doing, priorities are shifting, and phasing out of fossil fuels has proved challenging for companies. So we've been tracking the industrial market and the project spending and ESG-type projects for quite a while now. And as you said, we've got about $10 trillion worth of active spend. But there's a lot of geopolitical issues happening in the world right now. The war in the Middle East is ratcheting up, there's no end in sight to the Ukraine war, and the trade war is influencing material and project costs. Energy demand is also on the rise from things like data centers, and so that puts tremendous pressure on the industry as a whole — on how to meet that demand and also decarbonize. The Trump administration has paused a lot of the funding for green energy projects in the US that were funded by the Inflation Reduction Act and the Infrastructure Bill. As a result, there's uncertainty in the market and projects are experiencing delays.
Shaheen Chohan (03:30):
Clearly, Joe, you've started us off painting a picture of a market that is very, very dynamic and constantly changing. I think what would be useful is to get your perspectives and really just try and lock down on what is the magnitude of decarbonization spending and, certainly, what types of decarbonization and ESG-related projects you and your teams are tracking around the world.
Joe Govreau (03:55):
Yeah, as I mentioned, we're tracking about 52,000 projects totaling over $10 trillion. They really run the gamut of everything — from renewable energy type projects, we've seen a lot of solar and wind capacity coming online. Recently, I think Britt had mentioned in the outlook: wind power peaked in 2019 and solar peaked in 2023, as far as the amount of spend we're tracking. So that is definitely accounting for the majority of the spend. There's also quite a bit of spend in oil and gas for companies trying to abate methane and fix leaks in pipelines and terminals. There's quite a bit of activity in the chemical industry around green hydrogen and how to produce clean commodities from hydrogen.
Shaheen Chohan (05:00):
Just moving forward — and really what I'd like to do is just kind of peel the onion back a little bit. Could you walk us through the composition, and I guess what we call them — the pathways — the different pathways and certainly technologies that are now being developed and deployed that make up this broader decarbonization investment theme?
Joe Govreau (05:18):
Yeah. So it's heavily weighted toward the renewable energy side of things — even across industry, not just in the power generation industry, but in metals and minerals and other industries where a lot of in-plant electrification-type projects are happening to replace fossil fuel wherever they can. So that's probably the easiest way for companies to address decarbonization. There's also quite a bit around energy storage, renewable fuels in the chemical industry, for example, and power-to-X-type projects.
Shaheen Chohan (05:56):
Now, Joe, if I could bring you closer to home and just focus in on the ESG spending that you're seeing particularly in metals and minerals. Obviously your industry is both a beneficiary of the decarbonization theme — whether it's the upstream mining or the downstream metals processing, you are providing a lot of the raw materials or semi-finished product that goes into these new green technologies. But also, on the other hand, yours is an industry that's really been battered a little bit by very strict environmental compliance requirements. And a lot of the funding for many of your grassroots new mining projects — you want to develop a new steel mill — a lot of that funding is dependent on project owners being able to demonstrate that you have a high ESG rating. Would that be fair to say? So what are some of the types of projects and investments that your sector is committing to in order to decarbonize?
Joe Govreau (07:01):
Yeah. So the metals and minerals industry accounts for about 20% of all greenhouse gas emissions when you look at steel, cement, mining, glass and other smelters. So there's been a lot of effort to decarbonize those industries. Steel, for example — there's a lot of work around green steel and how to either electrify the process, or replace the blast furnaces with either hydrogen, or — now that hydrogen is proving too costly — they're looking at natural gas to fire the direct-reduced-iron facilities as a kind of bridge fuel while they figure out the technology and reduce the cost of producing hydrogen.
Shaheen Chohan (07:48):
Can I just stay with that green steel? Because you and I have talked about this in the past. Are there many projects out there associated with green steel, and are they actually moving forward — bearing in mind that green hydrogen, clean hydrogen, hasn't really scaled to the levels that probably many had hoped?
Joe Govreau (08:09):
Yeah. So the companies are kind of shifting away from the initial idea of using hydrogen and going to natural gas. So there are about 93 green steel projects that we're tracking, worth about $5.4 billion. ArcelorMittal is the second largest steel producer in the world, and they were going to decarbonize two mills in Germany — and they announced that they're backing out of that plan. They were going to get $1.5 billion in subsidies from the European Commission. So we're seeing quite a bit of pullback from those types of projects right now. But things are moving to the right.
Shaheen Chohan (08:49):
Well, I kind of want to — you've created the perfect segue into that. The reality of it is, and you've painted a picture right at the very start of this discussion, of one which is a little uncertain right now. We are in a period of higher inflation, certainly with the prospect of cost escalation for project owners increasing even further, should we not get a full resolution or at least a decent resolution around some of these trade tariffs. And unfortunately, as you also highlighted, we have an intensifying geopolitical situation. And I think that potentially could add further pressure on costs and certainly energy supply. And I guess all of this comes at a time when many of the decarbonization technologies, solutions and pathways that you talked about earlier are still quite costly. So we're still going to require the market to have tax incentives to some degree. But do you think now we are at a kind of a critical juncture in the path where the headwinds are just a little too big for many of these decarbonization projects to go forward? Could we expect to see more project fallout?
Joe Govreau (10:14):
Yeah, absolutely. And we're seeing increased fallout. This graphic here kind of represents that fallout since the beginning of 2024. We're tracking $1.5 trillion worth of fallout — these are cancellations or projects that were put on hold. And you can see that there's an increase in those. But at the same time, we're talking about a big market — there's $10 trillion still active. And the amount of projects are still coming in at a high rate. I just think there's some shifting in how companies are going to address achieving those goals.
Shaheen Chohan (10:55):
Yeah. So I think it goes back to that age-old trilemma that we have, where all governments around the world are trying to get this perfect balance between ensuring that there is sufficient energy supply to meet demand — and certainly that's a critical component when you're looking at emerging markets, where you've got rapid industrialization and very steep population growth, so that demand growth for energy is a lot higher than, let's say, the developed markets — but also the provision of all of that energy at a time when energy supply security is now becoming quite complex, and obviously trying to make sure that you have decarbonization as an agenda item. So I can certainly see why we may see more stress on some of these higher-cost ESG projects. Would you concur with that?
Joe Govreau (11:48):
Yeah, I definitely agree with that, and that's kind of what the market is bearing out. There's a lot of change. I mean, still the central area for the decarbonization projects is in Europe. But kind of the market has changed here recently in North America, with the new administration and the change in direction on some of the green projects — but there's still a need there to decarbonize in the long term. So the projects will be going forward.
Shaheen Chohan (12:20):
Yeah. We do have some headwinds, certainly over the near term. We can't ignore those. But maybe just sort of talk about the location — kind of where current decarbonization or ESG-related spending is being concentrated geographically over the next 24 months, 2025 to 2026 — where are you seeing that spending being located?
Joe Govreau (12:47):
Yeah. The graph on the left here shows what's currently under construction worldwide. There's about $1.2 trillion worth of decarbonization projects. And you can see it's heavily weighted in Asia, and also North America and Europe, where the main spend is. And that's mainly off of — as I mentioned earlier — the renewable energy projects that are going forward. And then there's another $1.8 trillion planned to start construction between now and the end of 2026. These are high and medium probability projects in the planning and engineering stage. And then beyond that, there's another $7.3 trillion, which makes up that over $10 trillion that are beyond 2026. So I think still things are getting pushed out further.
Shaheen Chohan (13:44):
Yeah. So the long and the short of it — I think everybody still has an aspiration to try and get somewhere close to net zero by 2050. I guess the pace and the timing of that is still a little less certain. But clearly ESG-related spending is still a big agenda item. Thank you, Joe, for sharing your perspectives. So folks, that brings us to the conclusion of our podcast. A very big thank you to you, Joe, for sharing your insights and perspectives today. If any of you have any questions about some of the points discussed today, then please do reach out to myself or Joe via the contact details you can see here. And finally, a big thank you to all of you who took the time to come and join us today. I hope we have helped you all better navigate some of the currents of change we're seeing. Thank you.
Decarbonization has dominated the energy and industrial markets for more than a decade. We have almost $10 trillion of currently active ESG-related spending still active in the market globally, but we've also seen over $1.5 trillion in projects that have now paused or canceled. And so many are asking: is the energy transition slowing down, or is it simply changing direction?
Shaheen Chohan (00:44):
Welcome to Navigating the Currents of Change. My name is Shaheen Chohan and I lead Global Analytics here at Industrial Info Resources, a company recognized for over 40 years in delivering trusted industrial data, verified and constantly updated across more than 12 industries worldwide. Now, to help me answer that big question and many others, I'm delighted to be joined by Joe Govreau, Senior Vice President of Research Operations for our Metals and Minerals industry at IIR. Now, Joe works directly with our research and forecasting teams to track major capital projects, policy signals, and long-term investment patterns, especially around sustainability and industrial decarbonization.
Now, in this episode, we're taking a close look at the decarbonization landscape — what's being built, what's slowing down, and how the story is shifting across different sectors and different regions. So together, we'll break down what kinds of ESG and decarbonization projects are still moving forward, why we are seeing delays and cancellations certainly in some of those key sectors, and then we'll be looking at where companies are doubling down as they try and adapt to cost pressure, policy shifts and infrastructure constraints. So welcome, Joe.
Joe Govreau (02:11):
Thanks, Shaheen. Yeah, I think we're definitely seeing kind of a shift in the makeup of decarbonization spending. If you look at what the projects are doing, priorities are shifting, and phasing out of fossil fuels has proved challenging for companies. So we've been tracking the industrial market and the project spending and ESG-type projects for quite a while now. And as you said, we've got about $10 trillion worth of active spend. But there's a lot of geopolitical issues happening in the world right now. The war in the Middle East is ratcheting up, there's no end in sight to the Ukraine war, and the trade war is influencing material and project costs. Energy demand is also on the rise from things like data centers, and so that puts tremendous pressure on the industry as a whole — on how to meet that demand and also decarbonize. The Trump administration has paused a lot of the funding for green energy projects in the US that were funded by the Inflation Reduction Act and the Infrastructure Bill. As a result, there's uncertainty in the market and projects are experiencing delays.
Shaheen Chohan (03:30):
Clearly, Joe, you've started us off painting a picture of a market that is very, very dynamic and constantly changing. I think what would be useful is to get your perspectives and really just try and lock down on what is the magnitude of decarbonization spending and, certainly, what types of decarbonization and ESG-related projects you and your teams are tracking around the world.
Joe Govreau (03:55):
Yeah, as I mentioned, we're tracking about 52,000 projects totaling over $10 trillion. They really run the gamut of everything — from renewable energy type projects, we've seen a lot of solar and wind capacity coming online. Recently, I think Britt had mentioned in the outlook: wind power peaked in 2019 and solar peaked in 2023, as far as the amount of spend we're tracking. So that is definitely accounting for the majority of the spend. There's also quite a bit of spend in oil and gas for companies trying to abate methane and fix leaks in pipelines and terminals. There's quite a bit of activity in the chemical industry around green hydrogen and how to produce clean commodities from hydrogen.
Shaheen Chohan (05:00):
Just moving forward — and really what I'd like to do is just kind of peel the onion back a little bit. Could you walk us through the composition, and I guess what we call them — the pathways — the different pathways and certainly technologies that are now being developed and deployed that make up this broader decarbonization investment theme?
Joe Govreau (05:18):
Yeah. So it's heavily weighted toward the renewable energy side of things — even across industry, not just in the power generation industry, but in metals and minerals and other industries where a lot of in-plant electrification-type projects are happening to replace fossil fuel wherever they can. So that's probably the easiest way for companies to address decarbonization. There's also quite a bit around energy storage, renewable fuels in the chemical industry, for example, and power-to-X-type projects.
Shaheen Chohan (05:56):
Now, Joe, if I could bring you closer to home and just focus in on the ESG spending that you're seeing particularly in metals and minerals. Obviously your industry is both a beneficiary of the decarbonization theme — whether it's the upstream mining or the downstream metals processing, you are providing a lot of the raw materials or semi-finished product that goes into these new green technologies. But also, on the other hand, yours is an industry that's really been battered a little bit by very strict environmental compliance requirements. And a lot of the funding for many of your grassroots new mining projects — you want to develop a new steel mill — a lot of that funding is dependent on project owners being able to demonstrate that you have a high ESG rating. Would that be fair to say? So what are some of the types of projects and investments that your sector is committing to in order to decarbonize?
Joe Govreau (07:01):
Yeah. So the metals and minerals industry accounts for about 20% of all greenhouse gas emissions when you look at steel, cement, mining, glass and other smelters. So there's been a lot of effort to decarbonize those industries. Steel, for example — there's a lot of work around green steel and how to either electrify the process, or replace the blast furnaces with either hydrogen, or — now that hydrogen is proving too costly — they're looking at natural gas to fire the direct-reduced-iron facilities as a kind of bridge fuel while they figure out the technology and reduce the cost of producing hydrogen.
Shaheen Chohan (07:48):
Can I just stay with that green steel? Because you and I have talked about this in the past. Are there many projects out there associated with green steel, and are they actually moving forward — bearing in mind that green hydrogen, clean hydrogen, hasn't really scaled to the levels that probably many had hoped?
Joe Govreau (08:09):
Yeah. So the companies are kind of shifting away from the initial idea of using hydrogen and going to natural gas. So there are about 93 green steel projects that we're tracking, worth about $5.4 billion. ArcelorMittal is the second largest steel producer in the world, and they were going to decarbonize two mills in Germany — and they announced that they're backing out of that plan. They were going to get $1.5 billion in subsidies from the European Commission. So we're seeing quite a bit of pullback from those types of projects right now. But things are moving to the right.
Shaheen Chohan (08:49):
Well, I kind of want to — you've created the perfect segue into that. The reality of it is, and you've painted a picture right at the very start of this discussion, of one which is a little uncertain right now. We are in a period of higher inflation, certainly with the prospect of cost escalation for project owners increasing even further, should we not get a full resolution or at least a decent resolution around some of these trade tariffs. And unfortunately, as you also highlighted, we have an intensifying geopolitical situation. And I think that potentially could add further pressure on costs and certainly energy supply. And I guess all of this comes at a time when many of the decarbonization technologies, solutions and pathways that you talked about earlier are still quite costly. So we're still going to require the market to have tax incentives to some degree. But do you think now we are at a kind of a critical juncture in the path where the headwinds are just a little too big for many of these decarbonization projects to go forward? Could we expect to see more project fallout?
Joe Govreau (10:14):
Yeah, absolutely. And we're seeing increased fallout. This graphic here kind of represents that fallout since the beginning of 2024. We're tracking $1.5 trillion worth of fallout — these are cancellations or projects that were put on hold. And you can see that there's an increase in those. But at the same time, we're talking about a big market — there's $10 trillion still active. And the amount of projects are still coming in at a high rate. I just think there's some shifting in how companies are going to address achieving those goals.
Shaheen Chohan (10:55):
Yeah. So I think it goes back to that age-old trilemma that we have, where all governments around the world are trying to get this perfect balance between ensuring that there is sufficient energy supply to meet demand — and certainly that's a critical component when you're looking at emerging markets, where you've got rapid industrialization and very steep population growth, so that demand growth for energy is a lot higher than, let's say, the developed markets — but also the provision of all of that energy at a time when energy supply security is now becoming quite complex, and obviously trying to make sure that you have decarbonization as an agenda item. So I can certainly see why we may see more stress on some of these higher-cost ESG projects. Would you concur with that?
Joe Govreau (11:48):
Yeah, I definitely agree with that, and that's kind of what the market is bearing out. There's a lot of change. I mean, still the central area for the decarbonization projects is in Europe. But kind of the market has changed here recently in North America, with the new administration and the change in direction on some of the green projects — but there's still a need there to decarbonize in the long term. So the projects will be going forward.
Shaheen Chohan (12:20):
Yeah. We do have some headwinds, certainly over the near term. We can't ignore those. But maybe just sort of talk about the location — kind of where current decarbonization or ESG-related spending is being concentrated geographically over the next 24 months, 2025 to 2026 — where are you seeing that spending being located?
Joe Govreau (12:47):
Yeah. The graph on the left here shows what's currently under construction worldwide. There's about $1.2 trillion worth of decarbonization projects. And you can see it's heavily weighted in Asia, and also North America and Europe, where the main spend is. And that's mainly off of — as I mentioned earlier — the renewable energy projects that are going forward. And then there's another $1.8 trillion planned to start construction between now and the end of 2026. These are high and medium probability projects in the planning and engineering stage. And then beyond that, there's another $7.3 trillion, which makes up that over $10 trillion that are beyond 2026. So I think still things are getting pushed out further.
Shaheen Chohan (13:44):
Yeah. So the long and the short of it — I think everybody still has an aspiration to try and get somewhere close to net zero by 2050. I guess the pace and the timing of that is still a little less certain. But clearly ESG-related spending is still a big agenda item. Thank you, Joe, for sharing your perspectives. So folks, that brings us to the conclusion of our podcast. A very big thank you to you, Joe, for sharing your insights and perspectives today. If any of you have any questions about some of the points discussed today, then please do reach out to myself or Joe via the contact details you can see here. And finally, a big thank you to all of you who took the time to come and join us today. I hope we have helped you all better navigate some of the currents of change we're seeing. Thank you.
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*This episode is brought to you by Industrial Info's Latin American Office in Argentina.