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Weak demand for green products is constraining investments needed up to US$700 billion in low-cost projects carbon in high-emission sectors such as aluminum, steel and cement, according to an initiative launched at last year's UN climate summit, COP28.
More than 450 large-scale industrial projects around the world are seeking hundreds of billions of dollars in investment to reduce carbon emissions, the Industrial Transition Accelerator (ITA) said in a statement on Thursday.
The ITA was created at the COP28 summit in Dubai to stimulate much-needed investment in green projects.
The six heavy industry sectors examined in the report — aluminum, cement, chemicals, steel, aviation and shipping — contribute approximately 30 percent of all global CO2 emissions, the ITA said.
“To stay on track with Paris-aligned climate targets, a critical mass of large-scale projects… must reach their final investment decision in the next 2-3 years,” the group said.
But project developers have not secured firm commitments from buyers of low-carbon products such as green steel and sustainable aviation fuel to secure the necessary financing, he added.
“The lack of clear and sustained demand for low-carbon products is the biggest barrier to investment. Companies and financiers cannot commit to these projects without market certainty,” said Faustine Delasalle, Executive Director of the ITA Secretariat.
ITA is operating in Brazil and the United Arab Emirates, providing targeted support to project developers, the statement said.