Cement and concrete are the world’s most widely used human-made materials — and the second most consumed substance on Earth after water. They are also responsible for nearly 8% of global CO₂ emissions. If the cement sector were a country, it would be the third-largest emitter in the world, after China and the United States.
While renewables, electric vehicles and other clean technologies attract billions in investment and robust policy support, cement and concrete lag far behind in the capital and attention they receive. At New York Climate Week, 21-28 September 2025, these materials may not attract the headlines — but without transforming this sector, the world will not reach net zero.
Decarbonizing this cement and concrete is no small feat. It requires a whole-of-value-chain transformation, from the raw materials entering a kiln to the concrete poured on a job site and, increasingly, to how we design for circularity and reuse. This transformation won’t happen through a single technology or a single actor. It demands coordinated capital deployment, policy alignment and market-shaping measures that span the entire ecosystem.
Why cement and concrete are so hard to decarbonize
The challenge is twofold:
1. Process emissions
~60% stems from the chemical reaction when limestone is heated (calcination), releasing CO₂.
2. Fuel and energy emissions
~40% comes from the extreme heat needed to drive this process — traditionally supplied by coal or petcoke.
Replacing fossil fuels in kilns helps, but without addressing process emissions, deep decarbonization is impossible. That’s why the solution space spans everything from low-carbon clinker chemistries to electrified heat sources, carbon capture-based solutions, circular concrete production and advanced monitoring and verification.
Looking across the value chain
A value chain perspective shows where innovation and financing can make the biggest difference:
• Upstream feedstocks and kiln operations: New binders, alternative fuels and carbon capture technologies are promising, but scaling them requires large-scale retrofits and billions in upfront investment.
• Material processing and distribution: Smarter logistics and processing of alternative materials can reduce emissions and costs, but demand mid-scale infrastructure upgrades.
• Concrete production and mix optimization: Digital mix-design tools and performance-based specifications allow for stronger, lower-carbon mixes. These solutions call for plant-level upgrades and software integration.
• Procurement and market adoption: Low-carbon procurement standards and verified emissions tracking can help generate credible demand signals. Here, investment is needed in transparency platforms and attribute trading systems.
• Circularity and end-of-life: Recycling aggregates, recarbonation and urban mining can close the loop. But this requires new recycling plants and innovative reuse technologies.
Each of these stages represents an opening for financiers, policymakers and innovators — and progress must happen in parallel.
First-of-a-kind (FOAK) financing and market gap
The early deployments of any breakthrough in cement and concrete decarbonization face the highest risk and the highest capital intensity. These FOAK projects often combine unproven technology at scale, complex integration into existing industrial systems and uncertain market acceptance.
For FOAK to succeed, collaborative, blended finance structures are essential. This can include layering:
• Public or concessional capital to absorb early risk.
• Private equity or infrastructure investors to bring discipline and scale.
• Credit enhancements and guarantees to attract commercial lenders.
• Outcome-based incentives tied to verified carbon performance.
Importantly, FOAK financing should remain technology-agnostic. The focus is not on picking winners, but on building structures that reduce risk across any credible decarbonization pathway.
Despite raised awareness, the sector faces a ‘missing middle’ funding gap between the venture market and the public-company/infrastructure market. Once a technology moves past the pilot stage, projects are too large and capital-intensive to be funded solely with equity — but too risky and unfamiliar for conventional debt.
Two structural problems amplify this gap:
1. Data scarcity
There is limited system-wide performance and cost data for cement and concrete solutions. This makes it difficult for lenders to underwrite projects and accurately assess risk.
2. Off-take challenges
Securing binding, bankable demand for low-carbon products is still difficult, especially when buyers have limited incentives or face procurement constraints.
The result is that much of the financial industry either ignores the market entirely or demands equity-like returns for what could be debt-like instruments — a mismatch that blocks scale and slows adoption. Bridging this gap requires new market mechanisms, better data transparency and early demand aggregation to create the confidence lenders need. The World Economic Forum’s First Movers Coalition, for example, aims to de-risk investment in low-carbon production through showcasing an aggregated credible demand signal from companies committed to purchasing deeply decarbonized cement and concrete by 2030.
Concrete Transition Capital (CTC) is developing an innovative project financing mechanism backed by risk analysis, sector underwriting, revenue generation support and credit enhancements to derisk investment in low-emission concrete and cement (LECC) production facilities. Through organizing capital providers, utilizing blended financing vehicles and securing contracted revenues, CTC seeks to reduce the risk and cost of borrowing, thereby enabling scale-up companies to bridge the gap and meet the financing industry halfway.
Matching finance to the challenge with policy as the enabler
Each link in the value chain requires capital, but not all capital is the same. The most effective strategies remain agnostic to the technology, focusing instead on the stage of maturity and risk profile:
• Early innovation finance — Grant funding, accelerators and seed venture capital for concepts and prototypes.
• Scale-up equity — Growth equity or venture growth funding for proven technologies entering new markets or building capacity.
• First-of-a-kind deployment capital — Concessional debt, blended finance and credit guarantees to get the first commercial-scale plants operating.
• Commercial rollout capital — Infrastructure debt and equity once technologies are proven and markets exist.
•.Market enablement finance — Funds for building data platforms, verification systems and demand-pull mechanisms, such as procurement commitments.
The goal is to unlock private capital at each stage by de-risking projects through the right combination of instruments, partners and market signals.
Yet, capital alone can’t move the sector without clear demand signals and aligned policy frameworks. Procurement standards that require — or heavily weight — embodied-carbon reductions can tip markets. Disclosure mandates, embodied-carbon caps and performance-based specifications can open the door for innovative mixes without compromising safety.
Market-shaping interventions — such as verified environmental attribute certificates (EACs) for cement and concrete — can create predictable revenue streams by overcoming geographical distances between procurers and suppliers, preventing physical cement and concrete offtakes and improving the bankability of low-carbon projects. This ‘book-and-claim‘ approach, already used in renewable electricity and sustainable aviation fuel markets, allows buyers to claim the carbon benefits of low-carbon cement and concrete, even when physical offtake is not possible, thereby improving the bankability of projects.
Collaboration, a new asset class and the road ahead
No single actor can solve this challenge in isolation. Cement producers control the kilns; ready-mix companies manage the mixes; construction firms write the specs; governments and private developers decide what to buy. Without coordination, even the best technology risks dying in pilot purgatory. A whole-of-value-chain coalition — spanning producers, tech developers, financiers, policymakers and major buyers — is essential. This is a systems challenge requiring parallel progress at every link in the chain.
If that collaboration succeeds, cement and concrete could shift from being a ‘hard-to-abate liability’ to becoming one of the world’s largest climate-aligned asset classes. New revenue streams could emerge from premium low-carbon products, verified performance credits tied to emissions reductions and circular business models based on reuse and recycling.
As leaders gather at New York Climate Week, much of the focus will fall on clean power, electric vehicles and finance flows. Yet, cement and concrete deserve an equal place at the table. They may lack the glamour of wind farms or EV fleets, but without them the net-zero transition cannot succeed. The technologies exist. The pathways are clear. What remains is to unlock capital at scale, align policy and summon the collective resolve to act.
Decarbonizing cement and concrete will not be easy, but it is essential. Those who step up now — financiers, policymakers and innovators alike — will clean up one of the dirtiest industries and help reshape the foundations of the global economy.
This article is republished from the World Economic Forum under a Creative Commons license. Read the original article.