Was 2025 the year that business retreated from net zero? | Energy industry

Almost a year since Donald Trump returned to the White House with a rallying cry to the fossil fuel industry to “drill baby, drill”, a backlash against net zero appears to be gathering momentum.

More companies have retreated from, or watered down, their pledges to cut carbon emissions, instead prioritising shareholder returns over climate action.

In the UK, the rise of Nigel Farage’s Reform UK has helped fracture the political consensus that had helped make Britain the first big economy to enshrine a commitment to cutting carbon emissions into law, in 2019. Earlier this year, the Conservative party leader, Kemi Badenoch, officially ditched net zero by 2050 as a Tory policy. Labour was even forced to defend its net zero policy after an attack by its former leader, Tony Blair.

Big players in retail and automotive this week became the latest businesses to weaken pledges – a retreat that threatens devastating consequences for the climate.

Running counter to this, many countries – notably China – have continued the march towards renewable power (which surpassed coal generation this year). Investment in clean energy, at $2tn (£1.5tn) a year, is now double that going into fossil fuels, according to the International Energy Agency.

Here we look at how important industries are treating net zero.

Cars and planes

For a few years after the pandemic, carmakers made bold promises that they would switch their factories to electric cars within a few years. Yet that momentum for change petered out by 2024 amid disappointing growth in battery car sales. In the US, EU and UK the lobbying campaign for weaker regulations has been intense – and successful.

Trump has torn up US electric vehicle subsidies – costing carmakers billions of dollars – and eased emissions rules to allow them to sell more cars with polluting petrol and diesel engines. This week, Ford said it would take a $19.5bn write-down and is scrapping several EV models.

The UK government said in April it would ease its zero-emission (ZEV) mandate. The rules still force carmakers to sell more electric cars each year, but new loopholes mean they can sell more hybrids, which combine a smaller battery with an internal combustion engine.

And the EU this week said that 10% of carmakers’ sales could be petrol or diesel after 2035, in a significant climbdown.

Traditional European carmakers were delighted, but manufacturers focused on electric cars said it would benefit Chinese rivals in the long term. Chris Heron, secretary general of E-Mobility Europe, a lobby group representing electric carmakers such as Tesla, Rivian and Polestar, said: “While China accelerates, Europe is hesitating, and hesitation is not a strategy.”

If the transition is stalling for ground transport, in the air things have not even started to take off. Airbus and Boeing, the global…