Low carbon materials critical to net-zero transition

The implications of a materials transition could be just as disruptive as the energy transition, according to McKinsey and Company research.

In the report How a ‘materials transition’ can support the net-zero agenda, McKinsey and Company authors point to low-emissions materials and the circular economy as accelerants to reaching net zero emissions.

According to the authors, “Recirculating materials, using them more efficiently in products, and increasing the utilisation and lifetime of vehicles and buildings (which take up most of the aluminum, steel, and cement produced in the European Union) could significantly lessen demand for primary industrial materials—and thereby reduce environmental impacts.”

McKinsey analysis reveals that alongside a renewable energy transition and energy efficiency gains, Europe’s industrial emissions by 2050 will be approximately 530 million metric tonnes. However when incorporating circular economy principals, where by materials are recycled and produced more efficiently, emissions could be cut by 56 percent.

“Until recently, the emissions associated with making cement, chemicals and steel were considered hard to abate, either because they come from necessary chemical reactions (such as the calcination of limestone during cement making) or because zero-emissions versions of standard industrial equipment (such as high-temperature furnaces) are ineffective or costly,” the authors said.

“During the past few years, however, new production methods, alternative energy sources and feedstocks, emissions-abatement technologies and circular practices have emerged. Together these new approaches combine to make a net-zero transition more feasible that it seemed until recently.”

One of the issues with recycling materials is that quality can be lost with each cycle of reuse. Therefore, the authors believe that there is a major business opportunity in preserving the value of steel, plastics and aluminium upon recycling.

Improving the scale of green or low CO2 material depends on improvements to their commerciality, including finance, infrastructure, inputs and regulation.  

Digital Nation Australia spoke to Michael Masterman, CFO at Fortescue Future Industries earlier this year who agreed that commercialisation, and regulation are the biggest barriers for widescale green steel production.

“There are still some cost issues there,” he said.

“A lot of it comes down to the policies of all the governments in Australia to be able to be practical with solutions that can move through the approvals in a strong ESG way.

“In some states, that legislation is very antiquated.”