Concrete policies to underpin the cement transition

The cement sector is a major industrial emitter, accounting for approximately 7% of global CO2 emissions and 4% of EU emissions. The report argues that the current decade is critical because 30% of EU cement kilns will reach the end of their life by 2030, presenting a window to avoid stranded assets by investing in low-carbon technologies. Key technical levers include reducing the clinker-to-cement ratio, implementing carbon capture and storage (CCS), and substituting fossil fuels with biomass and waste. To support this, the report recommends a comprehensive policy suite: upstream (accelerating renewable energy and CO2 infrastructure), midstream (implementing Carbon Contracts for Difference and phasing out ETS free allowances), and downstream (mandating green public procurement and scaling off-take agreements). It also highlights the role of sustainable finance, noting that while sustainability-linked bonds (SLBs) have been issued, their potential in the cement sector remains under-exploited due to a lack of sector-specific standards.

• The cement industry is the second-largest industrial emitter globally, contributing approximately 7% of global CO2 emissions and around 4% of the EU's total CO2 emissions.
• A critical investment window exists before 2030, as 30% of EU cement kilns are expected to reach the end of their operational life and will require reinvestment.
• Decarbonisation of cement is uniquely dependent on Carbon Capture and Storage (CCS) because approximately 60% of direct emissions result from chemical reactions during clinker calcination rather than fuel combustion.
• Global capital spending to transition the cement industry could reach USD 70 billion annually between 2030 and 2040, with an additional USD 16 billion needed annually over business-as-usual investments to reach net zero.
• Sustainable finance instruments, specifically sustainability-linked bonds (SLBs), are under-utilised in the sector, representing less than 2% of all SLBs issued between 2020 and February 2023, with total issuances around USD 3.7 billion.
• The report recommends implementing Carbon Contracts for Difference (CCfDs) to provide long-term price stability and reduce investment risks for breakthrough decarbonisation technologies.
• To prevent carbon leakage and incentivise decarbonisation, the report suggests phasing out free EU Emissions Trading System (ETS) allowances for sectors covered by the Carbon Border Adjustment Mechanism (CBAM) by 2030.
• Green Public Procurement (GPP) is identified as a powerful demand lever, as public procurement accounts for up to 40% of global cement demand.

APA

Passaro, F. (2023). Concrete policies to underpin the cement transition. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/Concrete-policies-to-underpin-the-cement-transition.pdf

Chicago

Passaro, Fabio. Concrete policies to underpin the cement transition. Climate Bonds Initiative, 2023. https://www.climatebonds.net/files/documents/publications/Concrete-policies-to-underpin-the-cement-transition.pdf.

Wikipedia

{{cite report |last1=Passaro |first1=Fabio |title=Concrete policies to underpin the cement transition |publisher=Climate Bonds Initiative |date=March 2023 |url=https://www.climatebonds.net/files/documents/publications/Concrete-policies-to-underpin-the-cement-transition.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{passaro2023concrete, author = {Passaro, Fabio}, title = {{Concrete policies to underpin the cement transition}}, institution = {Climate Bonds Initiative}, year = {2023}, month = mar, url = {https://www.climatebonds.net/files/documents/publications/Concrete-policies-to-underpin-the-cement-transition.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }