Decarbonisation: When can we expect the new business as usual for steel and concrete
A new business as usual is becoming measurably clearer for the steel and concrete industries, but there’s still a way to go get to net zero. We need deep collaboration from businesses right across the supply chain, access to secure sustainable finance and global public/private sector alignment to truly ignite the transition. Only then will we be able to unlock meaningful action at scale. This past month we’ve been raising the voice of the demand side and seeing it contribute to powerful and progressive steps forward.
We led the conversation in the U.S.
How to finance the decarbonisation of heavy industries was central to discussions at the ‘It’s a material work: Making the right investment for industrial decarbonization’ event at Climate Week NYC. High level speakers from both the financial and business community came together to explore the challenges and opportunities that these sectors face in getting the right scale of investment in time to effect change.
With representation from Europe, India and the U.S., speakers highlighted the various states of play of the steel and concrete industry around the world. What was clear is while one solution may work in Europe, it may not apply in another region. This is key to addressing the issues at hand. The shift in focus, on finding solutions to decarbonise heavy industry across Asia in particular, is an urgent global priority that needs to be addressed. These discussions continued at the Clean Energy Ministerial (CEM) in Pittsburg where I led several conversations on how steel consumers play a central role in shaping and supporting the industry to achieve net zero.
Near-zero steel is clearly defined
September was indeed a pivotal month for the steel industry. ResponsibleSteel, our SteelZero partner, published its updated Standard to coincide with Climate Week NYC and CEM. The additional requirements that ResponsibleSteel has added to the Standard define, and importantly verify, what is considered low emission and near-zero steel. It gives buyers the information they need to accelerate action towards net zero. As the Standard 2.0 forms part of the SteelZero commitment, it strengthens our members’ collective voice, boosts the demand signal and drives global alignment. It really is a gamechanger for the industry.
Mission Possible Partnership and ING Bank simultaneously published their reports on how to support the steel sector transition, and UNIDO launched the UNFCCC IDDI Green Public Procurement pledge. There were however some notable gaps in the conversation.
A just transition is needed
We know that the steel and concrete industries provide millions of jobs and support local economies across the world; how do we ensure that the shift towards net zero is equitable and inclusive? There’s no one answer to this question, but what lies at the heart is people, direct and indirect heavy industry employees, and their livelihoods. Responsible industrial transition means it is crucial that existing workforces are re-skilled and up skilled. This ensures employment and continues to support communities that rely on these heavy industries.
Strengthening public sector collaboration
We’re building out our work with states, regions, provinces and other subnational governments as part of the Under2 coalition, of which Climate Group is the secretariat. For SteelZero, we’ll be drawing on the ResponsibleSteel certification and Standard to hone our focus on societal issues. And we’ll continue to work with World Green Building Council and WBCSD to gather global insights for ConcreteZero. By working with an ever growing range of partners, we ensure a holistic and deeply collaborative approach, leaving no one behind as we move to a zero-carbon economy.
It's also important that Europe and North America aren’t the sole focus of the conversation on industrial decarbonisation. There needs to be a shift to support all countries and regions that are high producers of steel and concrete. For steel and concrete this is Asia, in particular India, China, South Korea and Japan.
Customers are setting the foundations for a new business as usual
We’re seeing substantial pickup in the pace and urgency on cutting carbon emissions from the production of steel and concrete. Of course, there’s a colossal amount of work to do to move every asset and production process towards lower emissions, near and ultimately net zero over the next 27 years. Through the work of SteelZero and ConcreteZero, we have a clear and immediately growing market for low emission products. We’re showing that customers not only want to buy clean steel and concrete, but they’re actively setting the new business as usual foundations for the industry – and embedding these expectations and requirements into their every procurement decision.