“Companies are facing increasing technological and economics challenges to decarbonize which is compounded by increasing uncertainty about political support” says Gregor Vulturius, Lead Scientist and Senior Advisor in Climate & Sustainable Finance at SEB. “Our research shows that the costs of reducing carbon emissions from hard-to-abate industries vary greatly across different technologies and require ambitious carbon pricing to outcompete existing fossil-powered forms of production.”
The report also features an update on the sustainable finance market and how it has funded heavy industry decarbonization.
“In the first eight months of 2025, the sustainable finance market recorded USD 1.45tn in new issuances, a modest 2.7% YOY decline.” says Samantha Arpas, Sustainable Finance Specialist at SEB. “Hard-to-abate industries are seeing increasing green bond issuance with China, the EU, and South Korea leading the way. Venture capital is building the pipeline for future investable projects, particularly in steel, cement, and chemicals.”
The report also examines the consequences of the One Big Beautiful Bill Act and the new tariff regime in the U.S. for the energy transition in the country and its key trading partners.
“New U.S. policies roll back the country’s clean energy policy by cutting key tax credits and boosting fossil fuels - likely cutting 23% of new solar and wind capacity by 2035.” says Gregor Vulturius. “They also threaten investment in clean tech manufacturing, while leaving the states reliant on China’s clean technology supply chains. The U.S. administration bet on fossil fuels to power AI will likely lead to higher energy prices.”
The American Chamber of Commerce in Sweden also shares its view on U.S. policy shifts, stating that despite transatlantic trade tensions, structural drivers towards secure and clean energy remain intact.
The full report is available here: Sustainable Finance Outlook Highlights | SEB
About the Sustainable Finance Outlook
The Sustainable Finance Outlook delivers insights and market intelligence for navigating the sustainability transition. Issued four times per year, the report engages a readership exceeding 3000, comprising financial institutions, corporates, and other influential decision-makers within SEB's primary markets. Renamed from The Green Bond, this change underscores the significant evolution of sustainable finance, which now extends far beyond traditional fixed income to embrace a diverse spectrum of financial products, markets, and stakeholders.