Filling gaps in the policy package to decarbonise production and use of materials

The report identifies that the production of basic materials accounted for approximately 25% of global CO2 emissions in 2014, yet progress in decarbonisation has been modest due to carbon leakage concerns and limited political support for resource efficiency. It proposes a portfolio of seven mitigation options, ranging from sharing and reuse to low-carbon production processes. To unlock these, the authors identify three primary policy gaps: incomplete incentives for recycling, a lack of markets for climate-friendly options, and missing signals for phasing out carbon-intensive production. Recommended solutions include project-based carbon contracts for difference (CfDs), Green Public Procurement (GPP), and the introduction of consumption charges on carbon-intensive materials to reinstate carbon price signals muted by free allowance allocations in the EU ETS.

• Basic materials production, including cement, iron and steel, paper and board, aluminium, and chemicals, represented about 25% of global CO2 emissions in 2014, with non-OECD countries accounting for approximately 75% of these emissions.
• The report identifies seven categories of mitigation options to align the materials sector with the Paris Agreement: sharing, repairing and reusing; more and purer recycling; material efficient design of products; efficient manufacturing; material substitution; low-carbon processes; and reducing plant emissions.
• Current decarbonisation efforts in Europe are hindered by an 'investment limbo' where carbon-intensive choices risk future policy stringency, while climate-friendly choices lack a clear economic case due to policy uncertainty.
• The European Emission Trading Scheme (EU ETS) fails to provide a full carbon price signal to consumers and designers because free allowance allocations prevent firms from passing carbon costs through to material prices.
• Project-based carbon contracts for difference (CfDs) are proposed to guarantee a carbon price for innovative projects, bridging the 'valley of death' by covering incremental operating costs and reducing financing risks.
• Green Public Procurement (GPP) can create lead markets for low-carbon materials by using shadow carbon prices higher than the EU ETS, though it is currently underutilised; in Germany, only 2.4% of large public contracts in 2015 included environmental criteria.
• The report suggests a consumption charge on carbon-intensive materials, potentially piloted in the automobile sector, to raise revenue for decarbonisation and reinstate carbon price incentives without the trade risks associated with border adjustments.
• To enhance recycling, the report suggests extending the Eco-Design Directive to mandate product durability, reparability, and ease of disassembly, alongside eco-modulated Advanced Disposal Fees (ADF) that reward circular design.
• Phasing out carbon-intensive production requires credible long-term signals, such as tightening emission performance standards, product certification for clean processes, and mandatory carbon-risk disclosure to influence capital market financing.

APA

Neuhoff, K., Chiappinelli, O., Bataille, C., Haußner, M., Ismer, R., Joltreau, E., Jürgens, I., Piantieri, C., Richstein, J., Sartor, O., Singhal, P., & Stede, J. (2018). Filling gaps in the policy package to decarbonise production and use of materials. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2018/06/CS-DIW_report-designed-2.pdf

Chicago

Neuhoff, Karsten, Olga Chiappinelli, Chris Bataille, Manuel Haußner, Roland Ismer, Eugénie Joltreau, Ingmar Jürgens, et al. Filling gaps in the policy package to decarbonise production and use of materials. Climate Strategies, 2018. https://climatestrategies.org/wp-content/uploads/2018/06/CS-DIW_report-designed-2.pdf.

Wikipedia

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BibTeX

@techreport{neuhoff2018filling, author = {Neuhoff, Karsten and Chiappinelli, Olga and Bataille, Chris and Haußner, Manuel and Ismer, Roland and Joltreau, Eugénie and Jürgens, Ingmar and Piantieri, Carlotta and Richstein, Jörn and Sartor, Oliver and Singhal, Puja and Stede, Jan}, title = {{Filling gaps in the policy package to decarbonise production and use of materials}}, institution = {Climate Strategies}, year = {2018}, month = jun, url = {https://climatestrategies.org/wp-content/uploads/2018/06/CS-DIW_report-designed-2.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }