COP28 unleashes unprecedented momentum to decarbonize heavy emitting industries
Steel, cement and concrete – high emitting industries that are essential to tackling climate change yet are the hardest to decarbonize – are now at the centre of the industrial decarbonization agenda thanks to the momentum built before and during COP28.
To achieve global climate goals, carbon emissions from steel, cement and concrete need to decrease by more than 90% by 2050. The collective action secured at COP28, which UNIDO has been central in driving, promises to bring the steel, cement and concrete industries closer to achieving this goal.
Early on in 2023, the COP28 Presidency identified the need to move industrial decarbonization forward, and it identified green public procurement as a priority. In collaboration with the Industrial Deep Decarbonisation Initiative (IDDI), the COP Presidency has taken targeted steps to raise this ambition throughout the year, using its Letter to the Parties to call on countries to commit to IDDI’s Green Public Procurement Pledge (GPP), and pushing for delivery on industrial decarbonization during COP28 itself.
A multi-billion-dollar demand signal
During the global summit, Canada, Germany, the US and the UK – governments with huge buying power – ramped up their commitments to buy low and near zero emission steel, cement and concrete when they became the first four countries to adopt timebound procurement goals under the GPP Pledge.
“The leadership from these four countries is hugely important,” said Fiona Skinner, who coordinates the IDDI. “They are the first movers, and what they are doing is ground breaking – they are not only pushing for deployment of and innovation in technology, they are pushing for innovation in the procurement process itself.”
By making their pledges at COP28, the four governments are sending a powerful multi-billion demand signal to steel, cement and concrete manufacturers as to the commercial viability of investing in the low carbon technologies that are needed to produce low and near zero emission products. Three other governments – Japan, the United Arab Emirates (UAE) and the Federal Government of Austria – also signalled their intent to sign the GPP pledge.
Fiona adds: “National and sub-national governments are increasingly aware of the need to use policies such as the GPP pledge as levers to make urgent progress on decarbonization. During the climate summit many expressed an interest in committing to buying low carbon or near-zero emissions materials. Through 2024 we will double down on our efforts to give governments the examples and tools they need to transform their procurement systems, and we hope to bring many more governments on board.”
The private procurement of low and near zero emission steel, cement and concrete was also given a boost after the First Movers Coalition, the world’s largest private sector group working to galvanize a demand signal for emerging climate technologies, used COP28 to announce that coalition members have signed 94 offtake agreements to buy emerging climate technologies, including those relating to heavy emitting industries.
Also on the procurement side, the Breakthrough Agenda, a collaboration between the International Energy Agency, the International Renewable Energy Agency and UN Climate Change High-Level Champions, announced a new set of 2024 priority actions for steel. Canada and the UAE launched a Breakthrough Agenda for cement and concrete, and France and Morocco launched the Buildings Breakthrough.
Robust steps towards a harmonized system for emissions accounting
Unless all purchasers and manufacturers across the world have a common understanding of what constitutes low and near-zero steel, cement and concrete, green procurement initiatives in these areas will not be as effective. To this end, the IDDI Secretariat released a White Paper at COP28 which represents a major first step in that direction. This covers the two most widely used greenhouse gas accounting methods for steel, cement and concrete – an international (or ISO) standard and a European (or EN) standard – and makes the differences and similarities between the two methods transparent alongside evidence-based proposals on how to align them.
Announcing the White Paper, Rana Ghoneim, Chief of the Division of Energy and Climate Action at UNIDO, said: “The urgency of driving towards harmonized greenhouse gas accounting approaches for hard to abate industries cannot be overstated.”
Supporting developing countries to decarbonize heavy-emitting sectors
Beyond the IDDI’s work, UNIDO is working directly with developing and emerging economies to agree on the policies, technologies and finances they need to decarbonize heavy emitting industries. At COP28, Brazil took centre stage presenting its preliminary decarbonization roadmap, developed in partnership with UNIDO, which focuses on three high emitting sectors: steel, cement and chemicals. This will inform the work of a new major bilateral country collaboration between the UK and Brazil, announced at the global summit, which will establish an Industrial Decarbonisation Hub in Brazil.
UNIDO is supporting the Moroccan, Kenyan and Vietnamese governments to develop similar roadmaps with announcements expected in 2024. By working directly with these strategic countries to agree on the policies, technologies and finances needed to decarbonize these highly polluting sectors, UNIDO is playing a central role in driving progress.
The Climate Club, a high-level intergovernmental forum consisting of 36 countries, officially launched at COP28 with two global initiatives. The Partnership for Net Zero Industry will be coordinated by UNIDO to support developing countries in their efforts to decarbonize heavy-emitting sectors by providing them with technical assistance. The technical facility will initially support five countries. Efforts are underway to bring more donors and philanthropies on board to extend this support to more countries.
The second initiative, the Global Matchmaking Platform, will be the Climate Club’s central platform for cooperation with developing countries. It will support developing countries in moving forward with industrial decarbonization agenda by facilitating the alignment, coordination and matchmaking of existing international technical and financial assistance offers and private finance instruments to the needs and priorities of emerging markets and developing economies. UNIDO will act as the platform’s secretariat.
Other major COP28 announcements that will drive the decarbonization of heaving emitting industries include the new Industrial Transition Accelerator (ITA) for Heavy-Emitting Industries, covering energy, heavy industry and transport. The ITA will bring global industry leaders together with policymakers, finance and technical experts to unlock investment and rapidly scale the delivery of projects on the ground.
Industrial decarbonization efforts will also be boosted by the Global Renewables and Energy Efficiency Pledge, which 123 countries signed. This sets the world on course to triple global installed renewable energy generation capacity, and double the global average annual rate of energy efficiency improvements every year until 2030. Another significant boost came from Mission Efficiency which announced it has secured a series of pledges in support of its Call to Action to double annual energy efficiency improvement and tripling annual energy efficiency investment.
Significant financial backing for industrial decarbonization was indicated through a suite of additional new climate finance instruments, including the Climate Investment Fund’s Industrial Decarbonisation Programme, the International Finance Cooperation’s Equity Facility, and the Climate Innovation Pull Facility.