Four industrial decarbonisation trends to watch in 2026
By Sarbojit Pal, Program Manager, Global Matchmaking Platform Secretariat
This article is part of the Global Matchmaking Platform’s Insight Series: Unlocking a New Industrial Age.
The revised Nationally Determined Contributions (NDCs) submitted by countries last year, indicate a desire for countries to drive significant action through their industrial sectors. But as industrial decarbonisation moves from commitments to implementation, 2026 will be a pivotal year for emerging markets and developing economies (EMDEs). A small number of structural shifts are becoming unavoidable and increasingly replicable. Here are four trends already taking shape, and likely to accelerate over the coming year.
1. Emissions data is becoming part of export competitiveness
As of January 2026, the EU’s Carbon Border Adjustment Mechanism (CBAM) enters its definitive phase, turning embedded emissions into a direct financial consideration for exporters of steel, cement, aluminium and fertilisers. Beyond the immediate cost implications, CBAM is also reshaping how carbon pricing, emissions accounting and trade rules interact across markets. For EMDEs, this represents a clear challenge, but also a catalyst for strengthening industrial data systems, aligning them with evolving global carbon pricing frameworks.
Türkiye illustrates this shift. The country’s first Climate Law entered into force in 2025, establishing a domestic Emissions Trading System (ETS) designed not only to price carbon and support national climate targets, but also to help manage exposure to CBAM by improving emissions transparency and regulatory alignment with key export markets. I had the opportunity to meet them earlier this month, and the country’s Directorate of Climate Change (DCC), overseeing this process, has already started work to roll this System.
And it’s not just limited to countries with a significant exposure to CBAM alone. As highlighted through the World Economic Forum’s paper Climate and Competitiveness: Border Carbon Adjustments in Action, that examines how Border Carbon Adjustment mechanisms are reshaping the relationship between carbon pricing, emissions data and trade competitiveness, it is clear that industries across major emerging economies like Brazil, China, India and South Africa, could benefit in the process. In 2026, we are likely to see more EMDEs treating Measurement, Reporting, and Verification (MRV) and emissions data as part of export and trade infrastructure, not just for climate reporting.
2. New financing instruments target industrial decarbonisation directly
A second clear trend is the emergence of dedicated financing instruments for heavy industry, moving beyond generic climate finance. These mechanisms combine concessional capital, risk-sharing and private-sector mobilisation, specifically tailored to steel, cement and other hard-to-abate sectors. Even five years ago, the language of industrial transformation was relatively unknown within the finance community, who were wary of exposure in this sector beyond the traditional fossil based capital investments. There has been a gradual change in that mindset post the pandemic, not only for embracing digitalization, but also for acknowledging the fresh-capital intensive industrial infrastructure that is due to be built (or rebuilt).
Countries are starting to line up pipelines of investment grade projects, with a good diversity of projects also lining up across the EMDEs. Early efforts through pooled climate assistance funds are making the first moves. A flagship example is the Climate Investment Funds’ Industry Decarbonization Program, a USD 1 billion facility focused exclusively on industrial decarbonisation. Brazil, Egypt, Mexico, Namibia, South Africa, Türkiye and Uzbekistan have already been selected to develop investment pipelines. The Global Matchmaking Platform (GMP) will also be working with a number of additional countries to secure technical and financial assistance for specific projects identified by them. In 2025, the GMP successfully engaged over 20 countries and matched over 20 industrial decarbonisation projects with international technical and financial support. For instance, Cambodia, Chile, Colombia, Egypt, Morocco, Türkiye, have already indicated project needs which have been matched with support, while several others are developing their specific requests.
And as they continue to work towards implementation of their NDCs, this year we will see more EMDEs compete on preparedness, bringing credible pipelines, sectoral roadmaps and MRV readiness to access these emerging industry-specific windows.
3. A shift from single plants to industrial clusters, and the idea of coordinated industrial development policies through the Hubs
Much like Silicon Valley did for digital innovation, industrial decarbonisation is increasingly being organised around clusters. Rather than decarbonising one facility at a time, governments are increasingly organising the transition around industrial zones, where shared infrastructure, clean energy supply and aggregated demand can reduce costs and investment risk. We have seen such advantages to great effect with the introduction of Special Economic Zones (SEZs) across many Asian economies. However, while in the past they might have been designed only for economic growth and development, the efforts today are encouraging these be integrated with clean energy sources, incorporating certain environmental standards. This theme was prioritized last year through South Africa’s G20 Presidency’s launch of the Sustainable Industrialization Hubs Coalition. We expect to see many more such sustainable industrial zones being announced in this new year, hopefully accelerating new green industries.
However, efforts are not just pushing for such physical infrastructure alone. Transformative changes in industrial production and processes often require complex, inter-connected policy and regulatory changes, not limited to ministries of industries alone. To simplify and streamline the domestic coordination required to facilitate such fresh policy making to complement the establishment of the physical industrial spaces and infrastructure, countries are also establishing domestic industry coordination hubs. Brazil, for instance, has launched such an Industrial Decarbonization Hub (ID Hubs) to cover this broad mandate. Brazil’s ID Hub is designed to create regulatory frameworks on green policies and the carbon market, to facilitate private investment in industrial decarbonization projects through national and international matchmaking, to support research and innovation in key sectors via incubation programmes and knowledge exchange, and to accelerate the commercialization of clean energy technologies with pilot demonstration projects. Similar efforts to establish streamlined coordination mechanisms are also underway in Turkiye, Egypt, and Indonesia, among others, with many more countries likely to follow similar approaches in 2026. EMDEs can also benefit from the newly established ID Hubs Accelerator facility to launch such coordination programs.
These coordinated efforts will likely help significantly ease the processes involved in establishment of new clean industrial setups.
4. Green industrialisation turns decarbonisation into a jobs and development agenda
A fourth trend is the shift toward green industrialisation as a development-led agenda for emerging markets and developing economies, rather than a climate-first narrative. Industrial decarbonisation is increasingly linked to job creation, skills development, domestic value chains and industrial upgrading, positioning the transition as an engine of inclusive growth. This perspective was formally reinforced in 2025 with the launch of the Belém Declaration on Global Green Industrialization at COP30 in Brazil, which positions green industrialisation as a core pathway to align climate ambition with economic development. The Declaration explicitly links the decarbonisation of heavy-emitting industries with job creation, industrial upgrading and resilient value chains, while emphasising the need for multilateral cooperation, coordinated finance and policy coherence to support emerging markets and developing economies in building their own low-carbon industrial pathways.
In practice, this means developing new industrial capabilities, value chains and skills in parallel with decarbonisation efforts. In many EMDEs, green industrialisation is therefore as much about reducing emissions as it is about creating new productive capacity and jobs. In fact, FSD Africa projects that green jobs could drive employment growth across the continent over the next four years, with up to 3.3 million direct green jobs by 2030 while helping African countries build the strategic green industries needed to compete in the future global economy.
2026 is shaping up as a year where industrial decarbonisation will continue to remain a priority for most emerging and developing economies, not only because of the climate imperative alone, but also aided by competitive pressures, new approaches to financing and with the emergence of scalable delivery models.
See how the Global Matchmaking Platform (GMP) is helping countries and partners turn these trends into investable, replicable solutions.
*The views expressed in the article are the author’s own and does not reflect or represent the views of the organization.
