Major global economies announce collaboration to drive the global decarbonization of steel and cement

VIENNA, 1 June 2021 – In a high-level online session earlier today, a coalition of governments and organizations, led by the United Kingdom (UK) and India, launched the new Clean Energy Ministerial’s Industrial Deep Decarbonization Initiative (IDDI). Coordinated by the United Nations Industrial Development Organization (UNIDO), this ground-breaking effort aims to create market demand for low-carbon industrial materials, especially more sustainable steel and cement. With steel and cement among the most carbon-intensive commodities on the planet today, over the next three years, the coalition wants at least 10 countries to commit to purchasing low-carbon versions of these essential materials.

 

 "Through this initiative, UNIDO will work with governments worldwide to agree on a global 2050 vision for the decarbonization of the steel and cement industries with ambitious targets informed by collective stakeholder inputs," said UNIDO Director-General LI Yong in his opening remarks.

In addition to the UK and India, other members of the coalition include Germany, Canada and the United Arab Emirates, with more countries expected to join soon. The initiative also brings together a strong group of related programmes and organizations, including the Mission Possible Platform, the Leadership Group for the Industry Transition (LeadIT), the International Renewable Energy Agency (IRENA) and the World Bank, to tackle one of the next frontiers in the race against climate change.
 

To date, steel and cement — which each represent around 7-8% of energy-related emissions globally — have remained out of reach in the pursuit to mitigate carbon emissions. The need for continuous, high-temperature heat to produce these construction products requires large amounts of energy, a lot of which is still dependent on fossil fuels.

 

“We need a new clean industrial revolution,” said Dan Dorner, the Head of the Clean Energy Ministerial (CEM). “This new global coalition will enable bold action that helps unleash the huge opportunities from transforming our heavy industrial sectors,” he said. “I am very proud to see the launch of this new CEM initiative to decarbonize heavy industry and very grateful the the governments of India and the UK, and our partner UNIDO for their leadership.”

While there is still a way to go before clearly defined low-carbon steel and cement is available in the market at scale, green public procurement commitments are essential in signalling that demand exists. For example, public procurement accounts for 46% of cement consumption in the United States of America, making it a colossal purchasing power in creating a market for lower emission materials. The same can be said for nations in the European Union and for many emerging industrial economies.

Within the next three years, the IDDI expects to have encouraged a minimum of 10 national governments, and a number of municipalities, to make public procurement commitments for low-carbon steel and cement. The first of a series of government commitments for the procurement of low-carbon steel and cement are expected to be announced at the upcoming global climate talks, hosted by the UK in Glasgow later this year.

“I firmly believe that this initiative has the potential to unlock the development of a global net-zero industry,” said Anne-Marie Trevelyan, Minister for Business, Energy and Clean Growth at the Department for Business, Energy and Industrial Strategy in the UK. “This initiative will align government action to create markets for low-carbon industrial products. We will work to ensure that the companies investing in a pathway towards net-zero today have a growing international market to sell their green products tomorrow.”

Major construction manufacturers, particularly those in emerging economies, are set to benefit from this initiative. Companies like India’s Tata Steel are already piloting new processes for the production of decarbonized steel, which is promising enormous efficiency gains.

 

“India’s commitment to cut emissions intensity per unit of GDP by 33 to 35% by 2030 significantly hinges on effective deployment of low-carbon technologies in energy intensive sectors like iron and steel, cement and petrochemicals,” explained Alok Kumar, India's Secretary of Power. "With the ongoing programmes, India has considerably improved specific energy consumption of steel and cement industries. Now the next stage will be to focus on reducing the emission intensities from these sectors. We are therefore thrilled to co-lead this initiative at the CEM and look forward to collaborating with other governments and international partners,” Kumar added.

For enquiries or more information, please contact programme manager, Rana Ghoneim, Chief of the Energy Systems and Infrastructure Division, UNIDO

Email: r.ghoneim@unido.org
 

Additional facts

 

• Emissions from the production of five basic industrial materials – steel, cement, plastic (and other chemicals), paper and aluminium – account for 20%of global CO2 emissions and demand for these materials is only expected to increase as many countries around the world continue to industrialize.
   
• Research by the IPCC predicts that if developing countries expand their infrastructure to average current global emissions, the global construction sector alone will emit 470 billion tonnes of carbon dioxide by 2050. This is more than the remaining carbon budget to avoid dangerous climate change. 
   
• Since more than 80% of cement and 90% of steel is produced in less than 20 countries, respectively, the adoption of green public procurement commitments, even in a limited number of countries, can help to achieve the majority of the greenhouse gas emissions reduction potential.
   
• In the EU alone, governmental expenditures on works, goods, and services are estimated to represent 14% of GDP, and up to 30% of GDP in developing countries. Materials such as cement, concrete and steel are often significant.
   
• Assuming around 40% of the cement is used for public constructions globally, green public procurement with 10%, 30% or 50% reduction targets in cement CO2 intensity can result in annual CO2 emissions reduction of 93, 280, and 470 million tonnes of CO2 (Mt CO2), respectively.
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• Assuming around 25% of  steel is used for public constructions globally, green public procurement with a 10%, a 30%, or a 50% reduction target in steel CO2 intensity can result in annual CO2 emissions reduction of 90, 270, and 450 million tonnes of CO2 (Mt CO2), respectively.