Lack of Demand Stifles $700 Billion Investment in Green Projects

Weak demand for green products is hindering up to $700 billion investment in low-carbon projects in heavy-emitting industries like aluminium, steel, and cement. The ITA, established at COP28, claims around 450 global projects need firm buyer commitments to secure finance and curb CO2 emissions effectively.

Weak demand for green products is curtailing critical investment of up to $700 billion in low-carbon projects within heavy-emitting industries including aluminium, steel, and cement, as per an initiative launched during last year's United Nations Climate Summit.

The Industrial Transition Accelerator (ITA) reported on Thursday that over 450 large industrial projects worldwide are in search of significant investment to reduce carbon emissions.

The ITA, founded at the COP28 summit in Dubai, aims to encourage necessary green project investments. The six major industrial sectors studied—aluminium, cement, chemicals, steel, aviation, and shipping—contribute roughly 30% of global CO2 emissions, the ITA highlighted.

"To maintain alignment with Paris climate goals, a significant number of large-scale projects ... must finalize investment decisions within the next 2-3 years," the group stated. However, a clear commitment from buyers for low-carbon products such as green steel and sustainable aviation fuel, crucial for securing financing, has been lacking.

"The lack of clear, sustained demand for low-carbon products is the biggest barrier to investment. Businesses and financiers cannot commit to these projects without market certainty," said Faustine Delasalle, Executive Director of the ITA Secretariat. The ITA operates in Brazil and the United Arab Emirates, offering focused support to project developers, the statement noted.

(With inputs from agencies.)