First Movers Coalition: Leading the charge in decarbonising the aluminium, steel & cement industry

The latest World Economic Forum Net-Zero Industry Tracker highlights the significant impact of the aluminium, steel, cement, and concrete sectors on global greenhouse gas emissions, collectively contributing to around 15 per cent of industrial emissions. These industries, vital for the green transition, face a daunting task in aligning with the 1.5°C climate goals, primarily as global population growth, urbanisation, and economic expansion drive increased demand. Balancing this growth with the imperative to reduce carbon intensity presents a considerable challenge for these sectors.

As per the World Economic Forum report, members of the First Movers Coalition (FMC), a global coalition of companies creating the largest private sector demand for green industrial products, exemplify this approach. The FMC comprises 99 members who have made over 120 purchasing commitments across seven sectors. By 2030, these commitments are projected to generate an annual demand of $16 billion for emerging climate technologies and achieve annual emissions reductions of 31 million tonnes (Mt) of CO2 equivalent.

Something more than demand commitments

Demand commitments alone are insufficient to drive market progress—they must be paired with practical execution. In 2023, FMC members signed 35 offtake agreements that secured carbon reductions across all seven sectors, raising the total number of offtake agreements supporting FMC commitments to 94. Below are examples of First Movers' investments in three key metals and materials sectors, illustrating their contributions to ambitious global plans for renewable energy deployment, cleaner transport, and sustainable construction.

How the industry is moving towards green transition

Low-carbon materials are essential to support the tripling of the renewable energy pledge made at COP28. According to the National Renewable Energy Laboratory's 2015 Cost of Wind Energy Review, wind turbines are primarily composed of steel, which accounts for 66-79 per cent of the total turbine mass, depending on the make and model.

While steel is employed in turbines and concrete supporting structures, aluminium is pivotal in manufacturing critical components to decarbonise energy systems. Danfoss, the newest FMC member in the aluminium sector, has pledged to procure low-carbon aluminium for its products and solutions. These solutions facilitate electrification, sector coupling, demand-side flexibility, energy efficiency, and energy recovery across various industries.

As per the reports, two leading FMC members in the steel, cement, and concrete sectors, Vattenfall and Ørsted, are dedicated to ensuring that the steel and concrete utilised in constructing their wind turbines meet 'near-zero' emissions criteria, aligning with their FMC sector pledges. Vattenfall has recently collaborated with Swedish steelmaker SSAB, an FMC trucking member, to procure fossil-free steel for its operations. This steel holds promise for various applications, including hydro dams, grid stations, and components of foundations for offshore wind power.

Revolutionary moves from leading automakers

The automotive industry boasts inspirational narratives, from the production of conventional combustion engines to hybrid models and fully electric vehicles. Despite facing marketing, economic, and social obstacles, First Movers like General Motors, Scania, Volvo Group, and Volvo Cars have boldly set ambitious decarbonisation targets for their electric fleets, operations, and supply chains.

For these companies, procuring metals sustainably and ensuring they possess low-embodied carbon is paramount, given that steel comprises approximately two-thirds of the average vehicles they produce, while the utilisation of aluminium is increasing at a double-digit rate. A faster and more comprehensive transition becomes feasible by sending robust demand signals to suppliers and collaborating across the value chain on material decarbonisation.

Long-term collaborations between Hydro and Volvo Group and Constellium and Renault on developing low-carbon aluminium roadmaps and closed-loop manufacturing are driving the market for low-carbon aluminium. Similarly, Volvo Group and Scania, as part of FMC steel members, have entered purchasing agreements with H2 Green Steel to procure near-zero steel starting from 2026/27, thus advancing industry decarbonisation. Additionally, both companies have partnered with SSAB to facilitate decarbonising their steel deliveries in the upcoming years.

Move towards sustainable construction

First Movers throughout the construction value chain have pledged to procure materials with near-zero emissions. During the design phase, ZGF Architects have committed to incorporating near-zero emissions cement and concrete into their designs, prioritising the delivery of energy-efficient projects. For instance, Amazon's Arlington HQ2 was constructed using low-emissions materials, including a less carbon-intensive concrete mix. During execution, FMC aluminium sector member VELUX will spearhead the procurement of low-carbon aluminium across its product range. It collaborates with key value chain partners such as Hydro and Novelis to achieve this goal.

The journey towards the green transition is arduous and complex, filled with challenges, yet its benefits to life on Earth are immeasurable. The collective efforts of First Movers, consolidating their demand for low-carbon materials, are already yielding results by stimulating the supply of products manufactured using innovative technologies. The initial suppliers making strides toward meeting FMC standards are catalogued in the FMC First Suppliers Hub, unveiled during the World Economic Forum's Annual Meeting in Davos in January 2024. This expanding repository of near-zero emissions projects spanning the FMC's materials and mobility sectors is an open-source tool accessible to all.