Rising demand for industrial products is increasing greenhouse gas (GHG) emissions and offsetting mitigation gains. 

Recent decades have seen substantial growth in demand for energy-intensive materials such as steel and cement, fueled largely by China’s rapid economic development. Brief lulls due to global slowdowns — for example, during the COVID-19 pandemic — were reversed once economic activity rebounded. Emerging economies are likely to drive even more demand in the future.  

Material efficiency and circular economy strategies can slow down demand growth

The majority of material-related emissions come from the production of iron and steel, cement and plastics. To reduce demand for these commodities, we need greater material efficiency and circular business strategies that reduce the amount of materials used for a product and promote durability, sharing, reuse and substitution. At present, only 8.6% of virgin resources are recycled.

In the International Energy Agency (IEA)’s Net-Zero 2050 Scenario, demand for cement, steel and aluminum in 2030 decreases by 5-10% relative to a baseline scenario due to approaches such as extending building lifetimes through repair and refurbishment, and reducing vehicle demand through other modes of transport, new design strategies (e.g., movable walls, steel beams optimized for multiple uses, urban planning for compact cities, lightweight product design, and packaging with less plastic) and end-of-life reuse.

Material efficiency has not been a policy priority

Mitigation efforts have focused mainly on energy efficiency rather than material efficiency, which has lagged as a policy priority. Most of the innovation in material efficiency has been sparked by the growth of waste management and recycling. 

We need to mainstream material efficiency and circular economy principles in national and subnational climate policies and adopt a mix of instruments and regulations that incentivize efficient resource use, such as stricter building codes. When considering substitution of one material for another (for example, use of clinker alternatives), we must also weigh all the impacts of material production, along with their lifecycle emissions and impacts on employment levels and job quality.  

Data Insights

What targets are most important to reach in the future?

Systems Change Lab has identified 3 targets to track progress. Click a chart to explore the data.

What factors may enable and prevent change?

Systems Change Lab has identified 4 factors of change that may catalyze or impede progress. Click a chart to explore the data.

Progress toward targets

Systems Change Lab has identified 3 targets target to track progress. Explore the data below.

Apparent steel use

Steel production is a carbon-intensive process that accounts for about 11% of global carbon dioxide emissions. Apparent steel use increased 12% from 1,636 Mt in 2017 to 1,834 Mt in 2021.

Steel production is a carbon-intensive process that accounts for about 11% of global carbon dioxide (CO2) emissions. Monitoring steel use over time is a way to measure changes in demand. Apparent steel use, measured in million metric tons (Mt), is an indicator of steel demand and refers to production plus imports and minus exports.

The global market for steel is driven by demand from building and construction, machinery, and automotive sectors. Across the world, crude steel production and use has been increasing steadily. Apparent steel use increased 12% from 1,636 Mt in 2017 to 1,834 Mt in 2021.

Leading steel-producing countries as of 2021 include China (1,033 Mt), India (118 Mt), Japan (96 Mt), United States (86 Mt), Russia (76 Mt) and South Korea (79 Mt). These countries are also the top six consumers — China (952 Mt), India (106 Mt), United States (97 Mt), Japan (58 Mt), South Korea (56 Mt) and Russia (44 Mt).

Due to the lack of appropriate Paris-compatible targets, we can’t calculate an acceleration factor or evaluate whether this indicator is on track.

Global consumption of cement

Accounting for around 7% of global CO2 emissions, cement production has nearly tripled since 2000, increasing 25% in just the last decade.

Cement production is a carbon-intensive process that accounts for about 7% of global CO2 emissions. World cement production has been increasing steadily, even growing slightly in 2020 during the pandemic.

Given its limited international trade, cement consumption is assumed to be equal to production. And since 2000, global cement production has almost tripled; in the past decade, it increased by 25%, from 3,280 Mt in 2010 to 4,100 Mt in 2019.

Among the top consumers and producers are China (55% of global production) and India (8%), followed by Vietnam, the United States, Turkey and Indonesia (each at 2% or less).

Due to the lack of appropriate Paris-compatible targets, we can’t calculate an acceleration factor or evaluate whether this indicator is on track.

Demand growth for key materials

Demand for carbon intensive materials like cement and steel often rises with increasing population and urbanization, and is likely to increase in response to the expansion of clean energy and transportation infrastructure.

Demand for industrial materials such as cement and steel, which are the building blocks of our economy, tends to increase with rising urbanization, standard of living, and population. Global demand for cement more than doubled, and demand for steel nearly doubled.

Emerging economies are likely to experience higher growth in material use in the coming decades. Demand for steel and cement is also likely to increase in response to the massive expansion of clean energy and transport infrastructure that will be needed for a low-carbon future.

Due to the lack of publicly available data and appropriate Paris-compatible targets, we can’t calculate an acceleration factor or evaluate whether this indicator is on track.

Enablers and barriers

We monitor momentum by tracking a set of 4 factors factor that can enable or prevent progress. Explore the data and learn about key actions driving progress.

Number of countries that have adopted some form of legislation, policy or target to promote circular economy

Regulation and Incentives
Circular economy emphasizes sustainability through the use and reuse of existing materials. This approach could reduce the demand for new production while cutting global emissions by as much as 3.6 billion tonnes annually.

Circular economy emphasizes sustainability through the use and reuse of existing materials. This approach could reduce the demand for new production while cutting global emissions by cutting global emissions by as much as 3.6 billion tonnes annually.

Comprehensive global data on the number of countries is not publicly available, but some limited information exists. European Union countries, including France, Germany, Finland and the Netherlands, along with China and Japan, are leading the shift toward a circular economy. They have announced roadmaps, strategies and innovations in materials and business models. France and Germany have also set national targets for material efficiency, while Germany and the Netherlands are in the process of developing indicators to monitor the transition to a circular economy.

New practices in product design (such as easier disassembly at end-of-life) are needed to encourage high recycling and recovery rates and ensure that more materials are recirculated. Using fewer materials to produce new products, known as material efficiency, is also necessary, as is waste reduction. It is currently estimated that 15% of building materials go to waste in construction.

Strategies promoting durability and multi-use can also reduce the consumption of materials. Creating longer building lifetimes through repair and refurbishment, reducing vehicle demand through shared transport, and incorporating movable walls in building design can lessen demand for new materials significantly.

In addition, a coherent strategy across material production sectors and material users (such as car and building manufacturing) can align incentives along complex supply chains and facilitate a circular economy. More intensive use of vehicles and buildings through sharing can lower materials use as well.

Share of global steel demand under some form of legislation, policy or target to promote material efficiency and circular economy

Regulation and Incentives
While there is no comprehensive data on this indicator, it will be helpful to track the share of global steel demand that is covered by circular economy policies or targets, especially in automotive and construction sectors.

While there is no comprehensive data on this indicator, it will be helpful to track the share of global steel demand that is covered by circular economy policies or targets. Automotive and construction sectors, together responsible for about two-thirds of steel use, provide the biggest opportunities to adopt new designs and circular economy principles.

The amount of steel used in automotive and construction sectors can be lowered using solutions such as lightweight product design, leasing/sharing vehicles to extend their utilization, repairing products, using higher grade steel, and increasing reuse and recycling of steel used in products.

Share of global cement demand under some form of legislation, policy or target to promote material efficiency and circular economy

Regulation and Incentives
While there is no comprehensive data on this indicator, it will be helpful to track the share of global cement demand that is covered by a circular economy policy or target.

While there is no comprehensive data on this indicator, it will be helpful to track the share of global cement demand that is covered by a circular economy policy or target.

Reducing waste in construction, using less material per building, reusing building components, renovating and avoiding new construction, improving maintenance, designing for flexible use, and sharing spaces are some ways in which material use in construction could be reduced.

Number of automotive and construction companies committing to science-based targets (SBTs) including scope 3 emissions or material efficiency and circular economy targets

Leadership
Corporate targets for circular economy and material efficiency, including the supply chain and use phase, can illustrate progress toward reducing material demand.

Automotive and construction companies are among the major consumers of steel and cement. Adopting material efficiency and circular economy targets or managing scope 3 emissions associated with their use of cement and steel can help manage the demand growth of these materials. Scope 3 emissions include indirect emissions originating from downstream and upstream processes along the value chain of companies. Companies like Lafarge-Holcim, for example, have committed to increased material recovery at the end of their products’ use phase, and Volkswagen has made circular economy one of its four focus areas for measurable targets.

The chart shows companies with SBTs including scope 3 emissions and companies with material efficiency and circular economy targets will be tracked as data becomes available. There are currently no automotive or construction companies with SBTs that include scope 3 emissions.