A Clean Energy Ministerial coalition designed to stimulate global demand for low carbon industrial materials
The Clean Energy Ministerial Industrial Deep Decarbonization Initiative (IDDI) is a global coalition of public and private organisations who are working to stimulate demand for low carbon industrial materials. In collaboration with national governments, the IDDI works to standardize carbon assessments, establish ambitious public and private sector procurement targets, incentivize investment into low-carbon product development and design industry guidelines.
Coordinated by UNIDO, the IDDI is co-led by the UK and India. Additional members include Canada, Germany, Japan, Saudi Arabia, Sweden, the United Arab Emirates and the United States. The initiative brings together a strong coalition of related initiatives and organizations including the Mission Possible Platform, the Leadership Group for Industry Transition (LeadIT) and the World Economic Forum to tackle carbon intensive construction materials such as steel, cement and concrete.
The next frontier in the fight against climate change
In the fight against climate change, heavy industries are the next frontier. To date, two ubiquitous industrial products in particular — steel and cement — have remained somewhat out of reach. Each representing around 7-8 per cent of energy related emissions globally, the highly energy intensive production of steel, cement and concrete must be confronted in the global effort to slash greenhouse gas emissions.
Unlike efforts to decarbonize the energy sector, which are well underway, steel and cement pose a unique set of challenges. The need for continuous high-temperature heat requires large amounts of energy, a lot of which is still dependent on fossil fuels. Electrified and other low-carbon technologies for steel and cement production are not yet available at scale, and economic incentives for industry to invest in research and development are limited.
Reaching net-zero carbon dioxide emissions for these sectors will require reducing demand for these materials, more and higher value recycling and switching to clean energy sources for primary production. It is therefore imperative to develop a new value chain and market for clearly defined “low-carbon construction and manufacturing” products. Alongside all of this is the need for a collective, long-term and aspirational vision of what net-zero carbon emissions steel and cement industries could look like by 2050, one that is wholeheartedly supported by governments and industry worldwide.
Given the physical, economic and political challenges of these globalized industries, well-designed policy packages from a coalition of governments, informed by evidence and careful consultation with all parties involved, are critical to decarbonizing heavy industry. The IDDI’s mission is to facilitate this process, address policy gaps and ultimately stimulate a market for low- and near-zero emission industrial materials including steel and cement.
The IDDI works with governments worldwide to standardize carbon accounting, establish green procurement targets, incentivize investment in low-carbon product development and design industry guidelines. Together, stakeholders and governments involved in the IDDI are encouraging much needed public and private purchasing commitments of decarbonized cement, concrete and steel, and subsequent investment into product development.
1. Governments and private sector businesses procure a share of low and near-zero emission steel and cement/concrete
At both the state and federal level, government agencies are top purchasers of steel, cement and concrete for major projects such as buildings, roads and bridges, making their procurement policies a powerful tool in creating a market for low and near-zero emission construction materials. When it comes to the private sector, car manufacturers, power generation developers and construction companies are also responsible for purchasing an influential share of cement, concrete and steel.
Making the most of the Clean Energy Ministerial’s member country network, the IDDI is advocating for governments to set procurement targets for the purchasing of decarbonized steel and cement and creating the tools to do so. While there is still a way to go before clearly defined ‘low-carbon’ cement and steel is available in the market at scale, green public procurement commitments are essential in signalling to the market “if you make it we will buy it.”
Within the next three years, the IDDI expects to have encouraged a minimum of ten governments to make public procurement commitments for low-carbon steel and cement. An estimated 80 per cent of cement and 90 percent of steel is produced in around ten key countries respectively. Therefore, the adoption of green public procurement commitments — even in just a handful of these countries — will make a great impact in terms of greenhouse gas emissions reduction.
2. Common standards and targets to support industry and procurers
Whether it’s setting targets for national procurement policies, industry carbon reporting or defining what constitutes decarbonized construction materials and products, reliable data is critical in this effort. For the most part, frameworks and data systems that produce or collect relevant data are lacking in the global steel and cement sectors.
Through the development of a number of key definitions, tools, guidelines and publicly accessible data, IDDI will enable industry to conduct rigorous reporting and industry benchmarking comparisons in addition to defining common methods and understandings of what constitutes decarbonized steel and cement products. Simultaneously, the IDDI will develop a globally recognised target for the public procurement of green steel and cement, informed by key industry data and insights collected and generated by the initiative throughout the duration of the project.
Key activities and outputs
Making these programme goals a reality requires a number of complementary efforts and global outputs, which will be completed within a three-year timeframe.
1. A standard environmental reporting mechanism for the cement, concrete and steel industries, providing a consistent communication framework for organizational accountability.
2. A standard evaluation process and tools for project bids which incentivise and reward public work contractors on their commitment to source decarbonized building materials.
3. Consistent definitions and standards for low and near-zero emissions cement, concrete and steel products to encourage best production and manufacturing practice.
4. Procurement guidelines for government agencies detailing how to set environmental project targets and incentivize contractors to source and use low and near-zero emissions cement, concrete and steel products.
5. Publicly available data, research and tools for industry and governments to set targets, establish industry-wide definitions of key sustainable products, improve production processes and benchmark best practice between organizations and industries.
7. Industrial deep decarbonization training and knowledge sharing to ensure that all cement, concrete and steel manufacturers have access to the information required to participate in the global race to net zero.
8. A global 2050 vision for the decarbonization of the cement, concrete and steel industries with ambitious targets informed by collective stakeholder input.
For more information, visit our website or contact:
Rana Ghoneim, Chief, Energy Systems and Industrial Decarbonization Unit, UNIDO.