Demand Aggregation 101

This guide by RMI explains demand aggregation as a strategy to accelerate the decarbonization of heavy industry and transport. By consolidating fragmented demand into larger signals, buyers can reduce first-mover risk, achieve economies of scale, and provide the financial certainty needed for suppliers to invest in low-emissions infrastructure. The document details specific initiatives in aviation, maritime shipping, steel, and cement, highlighting the use of joint procurement and 'book and claim' mechanisms to bridge the 'green premium' gap.

• Demand aggregation is the process of combining individual demand from multiple buyers into a single, larger signal to help suppliers accelerate new investments and send a stronger demand signal for low-emissions products. This is critical for heavy industrial sectors, which require nearly 600 low-emissions projects to start construction before 2030 to align with net zero goals and limit global warming to 1.5°C.
• Low-emissions alternatives in heavy industry and transport are often more expensive than conventional options due to the 'green premium', which stems from the need for significant infrastructure buildout and high upfront capital expenses. Demand aggregation helps mitigate this by sharing costs across value chains and providing financiers with the predictable, long-term cash flows necessary for project financing.
• Beyond stimulating supply, demand aggregation helps establish market infrastructure by aligning buyers and suppliers on voluntary standards, product definitions, and guidelines. This harmonization reduces barriers for new market entrants and ensures purchasing power is directed toward projects that effectively transform sectors.
• To engage buyers who are separated from producers by complex supply chains or who purchase services rather than raw materials, 'book and claim' mechanisms are used. These tools allow buyers to contract for and pay the premium for environmental attributes separately from the physical product.
• The Sustainable Aviation Buyers Alliance (SABA), launched in 2021, facilitates joint purchases of sustainable aviation fuel certificates (SAFc). In an RFP completed in April 2024, 20 corporate customers committed approximately $200 million over five years to purchase SAFc, representing about 50 million gallons of high-integrity SAF or 500,000 tons of abated CO2e.
• The Zero Emissions Maritime Buyers Alliance (ZEMBA), launched in 2023, focuses on zero-emission shipping solutions. In April 2024, it completed a collective tender where over a dozen companies committed to purchasing environmental attributes for over 1 billion twenty-foot equivalent container unit (TEU)/miles of zero-emission shipping on a route from Singapore to Rotterdam for 2025-2026.
• The Sustainable Steel Buyers Platform (SSBP) aims to drive investment in decarbonized ironmaking. In September 2024, RMI planned to launch a Request for Proposal for low-emissions steel to be delivered into North America before 2030.
• RMI and the Center for Green Market Activation (GMA) are implementing a phased approach for low-emissions concrete, starting with the design of a standardized book and claim system through stakeholder consultation, followed by the aggregation of demand for direct and indirect procurement.

APA

RMI (2024). Demand Aggregation 101. https://rmi.org/resources/demand-aggregation-101/

Chicago

RMI. Demand Aggregation 101. 2024. https://rmi.org/resources/demand-aggregation-101/.

Wikipedia

{{cite report |author=RMI |title=Demand Aggregation 101 |date=18 September 2024 |url=https://rmi.org/resources/demand-aggregation-101/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2024demand, author = {{RMI}}, title = {{Demand Aggregation 101}}, institution = {RMI}, year = {2024}, month = sep, url = {https://rmi.org/resources/demand-aggregation-101/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }