IFIs and Heavy Industry Decarbonization

This policy brief from LeadIT, published by the Stockholm Environment Institute, examines the role of international financial institutions (IFIs) in financing the decarbonization of heavy industry within emerging and developing economies, identifying current barriers and recommending the use of blended finance and concessional capital to scale breakthrough technologies.

• Heavy industry is a significant contributor to global emissions, with steel production accounting for 6% of all greenhouse gas emissions (8% of CO2) and cement production accounting for 5% of all greenhouse gas emissions (6% of CO2).
• International financial institutions (IFIs) can facilitate the transition to net zero by offering technical assistance for national transition plans and project pipelines, as well as providing targeted concessional capital to reduce risks for commercial financiers and first movers.
• Despite their potential, IFI engagement in heavy industry decarbonization is in its early stages due to barriers such as the scale of required investments, country priorities favoring other sectors, and a misalignment between IFI mandates and corporate needs.
• To prevent the lock-in of high-carbon assets, innovative financing that blends public and private capital must be established this decade to scale breakthrough technologies in emerging economies, especially as the EU's Carbon Border Adjustment Mechanism may alter market conditions for exports.

APA

Stockholm Environment Institute (2023). IFIs and Heavy Industry Decarbonization. https://www.sei.org/publications/ifis-heavy-industry-decarbonization/

Chicago

Stockholm Environment Institute. IFIs and Heavy Industry Decarbonization. 2023. https://www.sei.org/publications/ifis-heavy-industry-decarbonization/.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=IFIs and Heavy Industry Decarbonization |date=6 December 2023 |url=https://www.sei.org/publications/ifis-heavy-industry-decarbonization/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitute2023ifis, author = {{Stockholm Environment Institute}}, title = {{IFIs and Heavy Industry Decarbonization}}, institution = {Stockholm Environment Institute}, year = {2023}, month = dec, url = {https://www.sei.org/publications/ifis-heavy-industry-decarbonization/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }