Chart: Green industrial projects are stuck in limbo

Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format. Canary thanks Clean Energy Counsel for its support of the column.

Around 700 facilities for making low-carbon materials and fuels are in development or are operating globally.

Collectively, the projects promise to slash emissions from some of the world’s dirtiest sectors. But countries aren’t moving nearly fast enough to get most of these facilities online, according to the latest data from the Industrial Transition Accelerator (ITA) and Mission Possible Partnership (MPP).

The organizations looked at projects across six critical sectors — aluminum, cement, chemicals, steel, shipping, and aviation — which together represent 30 percent of the world’s annual greenhouse gas emissions. Each sector will need to bring dozens or hundreds of decarbonization projects online by 2030 to align with efforts to limit the most catastrophic effects of global warming.

To date, however, only 136 projects — or less than a fifth — are operational or have secured the necessary financing and permitting to start construction. The remaining 561 projects have been announced but not definitively confirmed, and more than half of them have been awaiting investment decisions for at least two years. (Note: Three of the confirmed projects and 26 announced projects overlap in two sectors, shipping and chemicals, so they appear twice in the chart.)

“If we want to have a wave of green industrial projects up and running by 2030, we need projects to be sanctioned in the next 18 months, given construction times,” Faustine Delasalle, executive director of IAT and chief executive officer of MPP, told Canary Media.

“We’re really facing a narrow window of opportunity,” she added. ​“At the current pace, it would take us about 35 years to get all of these projects actually sanctioned.”

MPP is an alliance of global climate and business groups. Last year, at the COP28 climate conference in Dubai, the organization launched the ITA to advocate for greater investment in commercial-scale, clean industrial projects. This month, during the COP29 summit in Baku, Azerbaijan, they released the list of 700 projects, along with a policy playbook geared toward government leaders.

Delasalle said that all countries need to adopt stronger policies to help lower costs and financial risk for industrial plants that make things like green ammonia, low-carbon cement, and near-zero-emissions steel. While voluntary efforts to pool private-sector demand have helped get the first few projects built, developers say they need greater certainty that their customers are willing to pay more for cleaner products before investing in the next wave of facilities.

The policy brief calls for countries to adopt carbon-pricing measures, which would penalize fuels and materials made using dirty methods and bring greener options closer to cost parity. Governments should also adopt mandatory quotas for low-carbon construction materials used in public works projects like bridges, roads, and buildings. In the United States, for example, California has adopted a Buy Clean policy that sets maximum emissions limits for steel, glass, and mineral wool insulation that the state procures.

“We need [green industrial] projects to be approved much faster, and for that to happen, the projects really need to be bankable,” Delasalle said. ​“And that’s where we need policy to kick in.”

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