Implications of deploying further material efficiency strategies

Material demand

The Clean Technology Scenario sees considerable divergence from the material demand trends in the Reference Technology Scenario. In 2060, in the CTS, demand is 24% lower for steel (equivalent to about six times the production in the United States in 2017), 15% lower for cement (two and a half times the production in India in 2017) and 17% lower for aluminium (1.2 times the primary production in China in 2017) relative to the RTS.

Considerable potential exists to push material efficiency beyond the Clean Technology Scenario. The Material Efficiency variant achieves the same climate ambitions as the Clean Technology Scenario while pushing material efficiency strategies to highly ambitious yet achievable limits, considering real-world technical, political and behavioural constraints. This leads to further material demand reductions compared to in the Clean Technology Scenario, especially for steel (16% in 2060) and cement (9% in 2060). Aluminium use sees an increase (by 5% in 2060) due to vehicle lightweighting outweighing other strategies that put downward pressure on demand.

Notes: Mt = million tonnes. RTS = Reference Technology Scenario. CTS = Clean Technology Scenario. MEF = Material Efficiency variant.

While material demand grows over time in the RTS, it is considerably reduced in the CTS and MEF.

Steel

For steel, the largest cumulative demand reductions from the Reference Technology Scenario to the Clean Technology Scenario occur in the product design and fabrication stage and the use stage, with substantial savings from improving product manufacturing yields and buildings lifetime extension. In the Reference Technology Scenario many buildings would be demolished and rebuilt before the end of their useful life, but major investment in energy efficiency retrofits in the Clean Technology Scenario leads to many of these buildings staying in service longer.

In the Material Efficiency variant, the largest additional savings in steel demand occur from vehicle lightweighting. Significant contributions also come from improving buildings design and construction and reusing steel.

Page | 9

Figure 5. Steel demand change by value chain stage across scenarios in 2060

Notes: RTS = Reference Technology Scenario. CTS = Clean Technology Scenario. MEF = Material Efficiency variant.

There is considerable potential to reduce steel demand at all stages of product and buildings life cycles.

Cement

Buildings lifetime extension contributes to nearly all of the cement demand reductions in the Clean Technology Scenario relative to the Reference Technology Scenario. This lifetime extension is again the result of retrofits and repurposing pursued in concurrence with buildings energy retrofits.

In the Material Efficiency variant, improvements to buildings design and construction are pursued much more aggressively, contributing to most of the additional reductions beyond the Clean Technology Scenario. The strategies include reducing concrete over-engineering and structural optimisation, promoting concrete-steel composite construction, reducing cement content in concrete and reducing on-site construction waste.

Page | 10

Material efficiency in clean energy transitions Findings and recommendations

Notes: RTS = Reference Technology Scenario. CTS = Clean Technology Scenario. MEF = Material Efficiency variant.

The buildings use phase offers the largest potential to reduce cement demand, followed by the design and construction stage.

Aluminium

In the Clean Technology Scenario, a considerable downward pressure on aluminium demand occurs because of improved aluminium semi-manufacturing yields and improved product manufacturing yields. However, vehicle lightweighting puts a substantial upward pressure on aluminium demand, as manufacturers substitute aluminium for steel to meet fuel efficiency objectives. The net result is a decline in aluminium demand.

Conversely, in the Material Efficiency variant, additional vehicle lightweighting has the largest effect and results in a net increase in aluminium demand relative to the Clean Technology Scenario. However, a large proportion of the increase from lightweighting is offset by reductions from aluminium reuse.

Page | 11