Summary of Clean Energy Ministerial Industrial Deep Decarbonisation Initiative

(CEM IDDI) Workshop on 22 April 2021

CEM members consume 72% of all energy produced in the world. CEM members’ industrial
sectors consume 81% of global industry energy consumption. Member states can use green
public procurement (GPP) to create market demand for green products, which in turn drives
the innovation and action required for deep decarbonization of energy-intensive industrial
sectors including steel and cement. The goal of this initiative is to build a platform for
collaboration that accelerates deployment of GPP policy in member states.

The workshop focused on drafting a work plan. Key outcomes and activities were proposed.
Then two discussion rounds were held to gather information on current actions in GPP and
collect feedback on the proposed activities.

Proposed key outcomes:

1. Define a collective medium-term vision setting targets, measuring, and reducing

embodied carbon.
2. Enhance data systems and establish harmonized rules for comparison to support
industry efficiency benchmarking and target setting.
3. Create incentives and give market signals to stimulate demand and drive industry
action on industrial decarbonization.

Proposed activities and outputs:

1. Define a standard environmental reporting mechanism

2. Define a standard evaluation process and tools for projects bids
3. Develop harmonized minimum standards
4. Develop guidelines for setting targets
5. Create a free or low-cost certification service
6. Make the data and the tools publicly accessible
7. Support IDD training and knowledge sharing platform

Discussion Round 1: Current Activities

Key questions for discussants:

• What are you doing in this area? Any there any potential synergies or overlaps?
• What are the key potential activities where you see some gaps?
• Which activities will be more challenging to work on and why? How can we overcome
these challenges?

Discussants agreed that policy to generate demand for green products will play an important
role in meeting the ambitious climate goals set for 2030 and 2050. The top priority is to
establish a reporting mechanism to start building a database of products which can be used
to determine industry standards. The next goal after this is to set targets that incentivize
uptake of current best practices as well as continued innovation.

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One theme from discussion was variation across industries. Steel can be decarbonized
through use of green hydrogen. It is feasible for this to be impactful in reducing emissions by
2030 as long as there is sufficient market demand. Standards like Responsible Steel already
exist to identify green products. The challenge with green steel is uptake in both public and
private procurement. GPP should be designed to incentivize adoption of green products.

Cement is much harder to decarbonize as half of emissions come from the calcination of
limestone and would not be reduced by use of clean energy sources. There is some low
hanging fruit that can be tackled but carbon capture and sequestration (CCS) will be
required for deep decarbonization. Low carbon concrete that uses recycled content in place
of conventional clinker faces challenges in uptake due to fear that it is not structurally sound.
Even when these are thoroughly tested, they may not be successful in the market as
engineers have a low tolerance for risk when it comes to safety and liability. New materials
may also require high upfront costs in testing, insurance, and changing existing regulations,
which further prevents industry from adopting their use. Another barrier is lack of expertise
on use of new materials such as how they compare to alternatives, norms, best practice, etc.

Due to these variations, targets should be industry- and product-specific. International

standards would be helpful for individual countries to use as a starting point. Targets should
not only focus on the fabricator but encompass the entire supply chain. Tracking of hydrogen
use in the power sector may be a good example to follow.

Discussion Round 2: Feedback on Proposed Activities

Key questions for discussants:

• Which of the activities listed are more important and should be prioritized?
• What other outputs/outcomes would be desired for CEM initiative?
• Where would you like to contribute and what?
• Any other key questions that we haven’t asked?

Discussants agreed with the proposed activities and their ordering. Many commented on the
importance of establishing reporting before defining targets. Stakeholders from
policymakers, procurement agencies, and industry should be consulted in defining
terminology like “green concrete” and setting feasible targets that consider the intricacies of
each sector. Lots of certifications and tools already exist to identify green products (e.g.
Responsible Steel). GPP should avoid duplication and choose a standard to ensure uniform
implementation. More details are needed on the type of collaboration envisioned, the
commitments required from CEM members, the timeline, and specific deliverables.

The complexity of target setting emerged as a theme of discussion. Targets must be

ambitious to encourage innovation. However, they should also be feasible enough for the
market to reach. A two-tiered approach with baseline standards and incentives for further
decarbonization may be used to encourage innovation without setting targets too low.
Targets should be adjusted incrementally to meet net zero goals. End use targets like net
zero buildings may encourage substitution of cement and steel with timber, which does not
contribute to the decarbonization of those sectors.

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Limitations of EPDs were also discussed. EPDs are based on life cycle assessment, which
can vary by scope. General industry-level EPDs are not helpful for differentiating between
bidders; facility-level EPDs are preferred. Product category rules (PCR) should be developed
to standardize how LCAs are conducted for each material.