Turning Challenge into Opportunity 2025

Materials cross-sector – converging realities across low-carbon materials suppliers2.5 Across the cement and concrete, steel, aluminium and carbon dioxide removal (CDR) sectors, suppliers related many similar challenges that stand in the way of faster decarbonization. While technologies and market structures differ sector by sector, some common barriers to progress continue to dominate supplier feedback: –Policy differences. –Weak market signals. –Divergent standards. –Unresolved financing. This chapter addresses how suppliers interviewed for this report viewed these themes from the perspective of cross-sector solutions and future stakeholder collaboration. Policy: differences and fragmentation impact demand visibility Across all three materials sectors plus CDR, greater policy harmonization and predictability offer potential ways to support progress in decarbonization. Regulatory approaches, carbon pricing mechanisms and incentive schemes differ not only between countries, but often within a single market. For example, many aluminium and steel producers said the limited scope and shifting parameters of instruments such as the EU Carbon Border Adjustment Mechanism, which may exclude certain processes or emissions sources, creates an uneven playing field. Similarly, CDR project developers must navigate a global patchwork of credits and eligibility rules, such as evolving tax incentives and nascent standards for carbon removals, which create uncertainty and impact investments. Cement/concrete suppliers reported similar challenges, especially as the strength of policy signals varies by jurisdiction. For all materials, policy changes globally can be frequent or abrupt, further destabilizing forward planning. Many suppliers described significant resources being spent on tracking and interpreting these changes, rather than innovating or scaling-up solutions. This disparate and evolving policy landscape makes long-term planning extremely challenging and often dampens the appetite for capital-intensive decarbonization projects.Market signals: weak, unpredictable or misaligned with industrial perspective A second, closely connected barrier is the lack of reliable, value-driving market signals aligned with actual decarbonization impact. Suppliers observe that, while there is growing support for “low-carbon” procurement, real-world buyer behaviour often fails to support the required technology transitions. Weak or inconsistent product premiums mean firms that invest in breakthrough carbon reduction methods rarely see these rewarded in contract prices or long-term market access. For instance, aluminium and steel suppliers highlighted that contracts often prioritize recycled content or cost savings, rather than lifecycle carbon intensity, dampening incentives for process innovation. Cement/concrete and CDR suppliers similarly pointed out that offtake arrangements rarely extend beyond short-term purchase cycles. The absence of multi-year, standardized contracts means lenders and investors often view such projects as risky – given there is no secure revenue base to underwrite plant financing. Many suppliers describe a tendency among buyers to select the minimum viable option, rather than partnering on shared investment in truly novel solutions. The result is that projects remain stuck in pilot or demonstration phases, as suppliers are forced to chase near-term or marginal requirements rather than investing boldly in long-term breakthroughs. Standards and accounting: divergent metrics create market friction Suppliers from the four industries highlighted serious consequences from the lack of unified accounting and standards. What constitutes a “low-carbon” or “sustainable” product may vary across governments, industries and buyers, with each applying different definitions and emission boundaries. For example, a steel product may qualify as “net zero” under one regime if it leverages renewable electricity, yet be excluded under another that does not count scope 2 emissions reductions. CDR and cement/concrete suppliers face shifting verification targets, with evolving criteria on issues such as permanence and additionality that change between project types, buyers and geographies. Turning Challenge into Opportunity: Supplier Voices from Heavy-Emitting Sectors 47