A Clean Energy Ministerial coalition designed to stimulate global demand for low carbon industrial materials
The Clean Energy Ministerial Industrial Deep Decarbonisation 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, IDDI works to standardise carbon assessments, establish ambitious public and private sector procurement targets, incentivise investment into low-carbon product development and design industry guidelines.
Coordinated by UNIDO, the IDDI is co-led by the UK and India and current members include Canada, Germany and United Arab Emirates (UAE). The initiative brings together a strong coalition of related initiatives 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 carbon intensive construction materials such as steel and cement.
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 and cement must be confronted in the global effort to slash emissions.
Research from the IPCC predicts that if developing countries expand their infrastructure to average current global emissions, the 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.
Unlike efforts to decarbonize the energy sector, which are well underway, steel and cement pose a very unique set of challenges. Firstly, the need for continuous high-temperature heat to produce these industrial products requires large amounts of energy, a lot of which is still dependent on fossil fuels. Renewable technology for steel and cement production is still not available at scale, and economic incentives for industry to invest in much needed R&D are limited.
Reaching net-zero CO2 emissions for these sectors will require improving design and reducing materials, more and higher value recycling, and switching to clean energy sourcing 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 CO2 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 globalised industries, well-designed policy packages from a coalition of governments informed by evidence and careful consultation with all parties involved is critical to decarbonising heavy industry. The Clean Energy Ministerial Industrial Deep Decarbonisation Initiative (IDDI)’s mission is to facilitate this process, address these missing policy gaps and ultimately stimulate a market for decarbonised industrial materials including steel and cement.
Working with governments worldwide to standardise carbon assessments throughout the lifecycle of key industrial products, establish ambitious public and private sector procurement targets, incentivise investment into sustainable product development and design industry guidelines, the IDDI contributes to wider industry efforts to decarbonise. Together, stakeholders and governments involved in the IDDI are encouraging much needed public and private purchasing commitments of decarbonised steel and cement, and subsequent investment into product development.
1. Encouraging governments and the private sector to buy low carbon steel and cement
At both the state and federal level, government agencies are top purchasers of steel and concrete for major projects such as buildings, roads and bridges, making their procurement policies a powerful tool in creating a market for lower 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 steel and cement.
Making the most of the Clean Energy Ministerial’s member country network, IDDI is advocating for governments to set procurement targets for the purchasing of decarbonised steel and cement. 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 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 per cent 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 emission reduction.
2. Sourcing and sharing data for common standards and targets
Whether it’s setting targets for national procurement policies, industry carbon reporting or defining what constitutes decarbonised 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 decarbonised steel and cement products. Simultaneously 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.
Making these programme goals a reality requires a number of complementary efforts and global outputs, which will be completed within a three year timeframe.