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.