Executive summary

Executive summary

Clean energy transitions require decoupling of economic growth from material demand

Economic development has historically relied on ever-increasing material demand.

However, producing materials consumes resources and energy, resulting in carbon dioxide (CO2) emissions and other environmental effects. Clean energy transitions will affect established material demand trends, through a combination of technology shifts and pursuit of material efficiency strategies. Potential for material efficiency exists throughout value chains, including through designing for long life, lightweighting, reducing material losses during manufacturing and construction, lifetime extension, more intensive use, reuse and recycling. This report examines material efficiency opportunities and implications for three energyintensive materials – steel, cement and aluminium – and includes deep dives on two major material consuming value chains: buildings construction and vehicles.

Material efficiency can contribute to reducing CO2 emissions. In the Clean Technology Scenario, which aligns with the objectives of the Paris Agreement, material demand is reduced compared to in the Reference Technology Scenario: by 24% for steel (equivalent to about six times the production in the United States in 2017), 15% for cement (two and a half times the production in India in 2017) and 17% for aluminium (1.2 times the primary production in the People’s Republic of China in 2017) in 2060. Material efficiency contributes approximately 30% of the combined emissions reduction for these three materials in the Clean Technology Scenario in 2060.

In the buildings sector, reduced materials demand contributes 10 gigatonnes of cumulative emissions reduction to 2060 in the Clean Technology Scenario, which is a 10% reduction in CO2 emissions from steel and cement use in buildings relative to the Reference Technology Scenario. The demand reduction is largely because of extended buildings lifetimes that are pursued in concurrence with energy efficiency retrofits. In the transport sector, vehicle lightweighting contributes approximately 10% of the global 2060 total passenger light-duty vehicle use-phase emissions reduction in the Clean Technology Scenario relative to the Reference Technology Scenario. This is a substantial portion in the context of the many other emissions reduction strategies such as engine and powertrain efficiency measures and fuel switching (including electrification) being pursued in road vehicles.

Further ambitions on material efficiency can reduce deployment needs for low-carbon industrial process technologies and achieve emissions reduction throughout value chains

Considerable potential exists to push material efficiency beyond the Clean Technology Scenario. The Material Efficiency variant achieves the same degree of energy sector decarbonisation as the Clean Technology Scenario. But it pursues material efficiency strategies to even more ambitious, yet achievable, limits, considering real-world technical, political and behavioural constraints. Strategies pushed considerably further are those more challenging to adopt from the perspective of requiring greater regulatory efforts, stakeholder co-ordination, value chain integration, investment, training, shifts in business practices or behavioural change

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(e.g. improved buildings design and construction, substantial vehicle lightweighting and material reuse). This leads to further material demand reductions compared to in the Clean Technology Scenario, especially for steel (16%) and cement (9%) in 2060. Aluminium use increases (by 5% in 2060) due to vehicle lightweighting outweighing other strategies that put downward pressure on demand.

Material efficiency strategies lead to more moderate deployment needs for low-carbon industrial process technologies for the same CO2 emissions outcome. The Material Efficiency variant achieves the same cumulative industrial emissions as the Clean Technology Scenario, but with a higher emissions intensity for steel (by 4% in 2060) and cement (by 7% in 2060). The emissions intensity of aluminium is somewhat lower (by 9% in 2060). The required cumulative capital investment on low-carbon industrial process technologies is 4% lower by 2060 compared to in the Clean Technology Scenario. For example, cumulative captured and stored CO2 emissions are 45% lower in the cement sector when material efficiency strategies are pursued to such an extent.

Additional material efficiency efforts can achieve emissions reduction beyond the Clean Technology Scenario in some value chains. For example, in the vehicle supply chain, improved fuel efficiency through additional vehicle lightweighting in the Material Efficiency variant reduces net emissions beyond the Clean Technology Scenario by 17% for passenger light-duty vehicles and 9% for light commercial and heavy-duty vehicles in 2060. Total emissions from material production for vehicles increase moderately due to higher production of aluminium, plastics and composites. But this rise is outweighed by emissions savings during vehicle use. In the buildings sector, additional material efficiency efforts relieve pressure on industry without necessarily decreasing buildings use-phase emissions.

Policy and stakeholder efforts are needed to improve material efficiency

Material efficiency does not come without challenges and costs. Real and perceived risks, costs, time constraints, fragmented supply chains, regulatory restrictions and lack of awareness are some of the many barriers to greater uptake of material efficiency strategies. Improving material efficiency will in many cases incur costs, although estimates suggest that these may fall within a reasonable range compared to other emissions mitigations options.

Efforts from all stakeholders will enable greater uptake of material efficiency. Governments and industry can work together to further develop regulatory frameworks and business models in support of material efficiency. Industry can consider the life-cycle impact when designing products and buildings, facilitated by increased data collection and rigorous life-cycle assessment conducted in partnership with researchers. Increasing efforts on end-of-life repurposing, reuse and recycling are also key. Consumers can play a role by increasing demand for material-efficient products that contribute to reducing CO2 emissions.

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