Poor demand for greener aluminium, cement, chemicals and steel products is deterring up to $700 billion worth of investment in low-carbon projects.
The low order numbers in heavy-emitting industries, which also includes shipping and aviation, were revealed by those behind an initiative launched at last year’s United Nations Climate Summit.
Over 450 large-scale industrial projects globally are seeking hundreds of billions of dollars of investment to slash carbon emissions, the Industrial Transition Accelerator (ITA) said in a statement on Thursday.
The ITA was set up at the COP28 summit in Dubai to stimulate needed investment in green projects.
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The six heavy industry sectors examined in the report – aluminium, cement, chemicals, steel, aviation and shipping – contribute approximately 30% of all global CO2 emissions, the ITA said.
“To keep on track with Paris-aligned climate targets, a critical mass of large-scale projects… must reach their final investment decision in the next 2-3 years,” the group said.
But project developers have not secured firm commitments from buyers for low-carbon products such as green steel and sustainable aviation fuel in order to secure the necessary finance, it added.
“The lack of clear, sustained demand for low-carbon products is the single biggest barrier to investment. Businesses and financiers cannot commit to these projects without market certainty,” said Faustine Delasalle, executive director of the ITA Secretariat.
The ITA is active in Brazil and the United Arab Emirates, providing targeted support to project developers, the statement said.
- Reuters with additional editing by Sean O’Meara
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