Decarbonizing Hard-to-Abate Industries: The Importance of a New Accounting Method

This briefing by RMI argues that current corporate-level carbon accounting lacks the transparency needed to drive decarbonization in hard-to-abate industries. It proposes a new product-level accounting method that distinguishes between the emissions intensity of virgin and recycled inputs to create credible market signals and support net-zero goals.

• Steel, aluminum, and petrochemical industries are identified as hard-to-abate sectors that collectively represented 14 percent of global greenhouse gas emissions in 2019.
• Increasing circularity and materials efficiency offers immediate emissions cuts and broader environmental gains; for instance, based on 2020 global iron ore production, circularity could reduce iron ore extraction by 37 percent, save 344 million m3 of water, and avoid over 170 acres of land use change annually.
• Recycled materials alone cannot achieve net-zero by 2050 because scrap supply is limited by product lifetimes in sectors like automobiles, infrastructure, and buildings; optimistic models suggest recycled inputs may only meet 70 percent of steel demand by 2050.
• RMI proposes a new accounting method that distinguishes the emissions intensity of virgin and recycled supply chain segments to replace corporate-level aggregation, which currently hides upstream supplier decarbonization efforts and lacks product-level visibility.
• The proposed accounting guidance serves multiple stakeholders: corporations can verify supplier progress to catalyze demand for low-carbon products, producers can gain competitive advantages, and policymakers can better enforce instruments such as the Carbon Border Adjustment Mechanism (CBAM).

APA

RMI (2022). Decarbonizing Hard-to-Abate Industries: The Importance of a New Accounting Method. https://rmi.org/resources/the-importance-of-a-new-accounting-method/

Chicago

RMI. Decarbonizing Hard-to-Abate Industries: The Importance of a New Accounting Method. 2022. https://rmi.org/resources/the-importance-of-a-new-accounting-method/.

Wikipedia

{{cite report |author=RMI |title=Decarbonizing Hard-to-Abate Industries: The Importance of a New Accounting Method |date=6 September 2022 |url=https://rmi.org/resources/the-importance-of-a-new-accounting-method/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2022decarbonizing, author = {{RMI}}, title = {{Decarbonizing Hard-to-Abate Industries: The Importance of a New Accounting Method}}, institution = {RMI}, year = {2022}, month = sep, url = {https://rmi.org/resources/the-importance-of-a-new-accounting-method/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }