"Challenges and best practices in financing to accelerate industry decarbonisation", OECD Series of Webinars on low carbon hydrogen and industry decarbonisation, 14 June 2023

1. Image:
Pexels
Decarbonising the Steel and
Cement Industries:
Global Policies and Best Practices for Industry Transition
G20 India Presidency 2023
Energy Transition Working Group IV

2. Policy
• Insufficient ambition for energy and resource efficiency, and material circularity
• Unclear demand for low emission steel and cement in the public and private sector
• No/low interoperability between emissions measurement standards
• No internationally agreed definition for low- and near-zero emission steel and cement
• Risk of technology lock-in
Finance
• High capital requirements for the transition to low-carbon technologies
• High risk investments lead to low access to finance, especially in emerging economies
Capacity
• Infrastructure for hydrogen, CCUS and electrification
• Workforce and skills development
Technology • Availability and access to low carbon technologies and fuels
Challenges to the decarbonisation of harder to abate sectors

3. • The transition towards net-zero steel and cement is highly capital-intensive (estimate figures
for global transition)
• Steel: $170 - 200 bn pa1
• Cement: $370 - 1,270 bn pa2
• Existing facilities will need to be retrofitted and new low-carbon facilities will need to be built
to meet the objectives of the Paris Agreement
• Low carbon technologies are considered high risk investments
• Cost of capital in emerging economies is a major barrier to the deployment of low-carbon
technologies
Challenges to financing decarbonisation of the steel and cement sectors
1 Mission Possible Partnership (2022). Making Net-Zero Possible: An industry-backed, 1.5°C-aligned transition strategy.
2 Global Cement and Concrete Association (2022). Concrete Future The GCCA 2050 Cement and Concrete Industry Roadmap for Net Zero Concrete.

4. Action areas Key activities
• Bilateral and multilateral
development financing
• De-risk investments
• Leverage private finance
• Engage with International Finance Institutions and initiatives that provide
financing standards:
• Climate Investment Fund Industry Decarbonization Program
• Climate Bonds Initiative
• RMI Center for Climate Aligned Finance Initiative – Sustainable
STEEL Principles
• Develop sustainable finance taxonomies
• Explore blended finance models for first-of-a-kind industrial technologies
Develop industry-dedicated financial mechanisms