Nearly half of global companies are ready to pay a premium for lower-emission steel and concrete
A new report released today by Climate Group and Ramboll at Climate Week NYC reveals that close to 50% of global businesses surveyed for the research are prepared to pay a premium for lower-emission steel and concrete, signaling a powerful and growing demand for more sustainable materials. With steel and concrete emissions responsible for 15% of global emissions, their urgent decarbonization is critical to meeting the goals outlined in the Paris Agreement.
The report, “The Steel and Concrete Transformation: 2024 Market Outlook on Lower Emission Steel and Concrete,” comes after over 250 companies globally from 42 countries and 21 industries were surveyed on their current readiness to use and willingness to pay for lower emission steel and concrete. It aims to evaluate business readiness to incorporate lower-emission steel and concrete in their operations, their willingness to pay a premium for these materials, and the existing key barriers preventing wider adoption.
The research indicates growing momentum, with 45% of respondents saying they would be willing to pay a premium for emissions reductions of 25% or higher for steel, while 57% would be willing to do so for reductions exceeding 50%. For concrete, these numbers were 40% and 49% respectively. While the ability to pay varies across sectors and geographies, 52% of respondents had a higher willingness to do so when compared to their stance one year ago, while 34% reported no change in opinion.
The report highlights that businesses expect the transition towards lower-emission materials to be inevitable. Driven by regulatory pressures and market demand, 78% of respondents answered that lower-emission steel and concrete will be standard materials for new products or projects within the next decade.
While the outlook is broadly positive, the report also focused on the barriers and solutions to this widescale adoption and transition. Businesses said while progress is accelerating, the greatest barriers to adoption remain cost (84%), industry conservatism (37%), and lack of knowledge (33%).
In terms of solutions, businesses were clear that governments have a significant role to play in supporting them. Financial levers such as tax incentives, credits, and subsidies (69%), carbon pricing (50%) as well as minimum product standards or embodied carbon limits (43%) were identified as crucial policies for governments to prioritize. Without them, the world is unlikely to see the rapid scaling of lower-emission steel and concrete in time. Clear and robust policies must be implemented at all levels of government, now.
Climate Group’s Jen Carson reports increased demand for lower-emission steel and concrete, indicating a growing appetite among business leaders, suppliers, governments, and investors. Governments must support businesses in transitioning to lower-emission steel and concrete, removing barriers, and listening to their concerns to accelerate sector transformation.
Ramboll CEO Michael Simmelsgaard emphasizes the need for collaboration among policymakers, investors, off-takers, and end users to accelerate the decarbonization of heavy industries and drive global net zero, citing increased companies willing to pay premiums for lower-emission steel and concrete.
