Cement, iron, and steel collectively account for a whopping one-fifth of global carbon emissions. Making matters worse, these foundational materials have long proven particularly difficult to decarbonize (especially with a reasonable price tag attached).
At a recent panel discussion co-hosted during Climate Week by Columbia Business School’s Green Business Club and the Tamer Institute for Social Enterprise and Climate Change, experts deeply embedded in the production and procurement of these hard-to-abate materials discussed the holdups to cleaner products — and why those holdups may finally be loosening.
The panel was moderated by climate economist Gernot Wagner, who also serves as faculty director of CBS’s Climate Knowledge Initiative. One of CKI’s central aims is to convene regular discussions like the one Wagner facilitated during the Climate Week panel, so that business leaders can trade strategies and solutions as they undertake the transformations necessary to decarbonize.
Of course, every sector struggles with its own decarbonization pitfalls, and those facing cement and steel have appeared notoriously impenetrable. Wagner explained that unlike in the power sector (where solar energy is now the cheapest form of electricity in history), low-carbon cement and steel has continued to suffer under the weight of a pricey “green premium.”
Part of the problem is structural: traditional processes of producing these materials are simply emissions heavy, and cleaning them up would require expensive investments in brand-new approaches and equipment. Cement production emits CO2 not only from burning fossil fuels for heat, but also from the chemical process of heating limestone. Steelmaking, similarly, uses carbon-intensive blast furnaces and releases CO2 during the reduction of iron ore. These emissions can’t be eliminated by swapping in renewable electricity alone.
Still, the panel discussion highlighted reasons for optimism.
Two companies represented on the panel — Swedish green-steel producer Stegra and California-based low-emissions cement startup Brimstone — are demonstrating that innovative processes and strategic partnerships can, indeed, yield abatement breakthroughs.
Rethinking Steel: Stegra’s Hydrogen-Based Path
Steel accounts for at least 10 percent of global emissions, and 80 percent of the CO₂ from flat steel production comes from a single step: iron-making. Maria Persson Gulda, Stegra’s founding CTO, explained the company’s deceptively straightforward approach: replace coal with green hydrogen.
“If you reduce the iron ore using only green hydrogen, you have a cleaner iron and therefore a cleaner steel,” she said. The process cuts emissions from the iron-making stage by 100 percent, and slashes total steel emissions by about 95 percent.
Stegra is in the midst of constructing a facility in Northern Sweden that will produce 2.5 million tons of green steel annually. This chosen site is no accident: the region offers cheap, abundant hydropower — a crucial perk, since hydrogen electrolysis consumes vast amounts of electricity. At about 3 cents per kilowatt hour, Stegra was able to lock in renewable electricity prices in Northern Sweden that are a fraction of those in places like Germany, where rates are closer to 30 cents per kilowatt hour.
Persson Gulda emphasized that, alongside affordable clean energy, partnerships have been integral to Stegra’s growth. Mercedes has taken an equity stake in the company, as have German equipment manufacturers.
“You can only make this business happen if you have partnerships across the whole value chain,” Persson Gulda said, adding that such early collaborations reduce risk and help scale production.
Policy shifts in Europe have further tilted the economics in Stegra’s favor. Steel producers have long been exempt from paying for emissions under the EU’s carbon trading system, but with the Carbon Border Adjustment Mechanism (CBAM) coming into force over a multi-stage-rollout process, that’s set to change. Over the next decade, European steelmakers will begin paying for their carbon emissions, shrinking Stegra’s green premium. Under CBAM, Persson Gulda predicts, green steel could simply become the default.
Cleaning Up Cement: Brimstone’s Geological Hack
If steel is a tough carbonization problem to crack, cement may be tougher. Concrete is the most consumed humanmade material on Earth, “literally the foundation of the built world,” as Simon Brandler of Brimstone put it. And cement — the binder that holds this ubiquitous material together — accounts for 5 to 8 percent of global emissions.
The main problem lies in the limestone. When heated, it releases carbon as part of a chemical reaction, creating “process emissions” that make up 60 percent of the sector’s carbon footprint. Even switching to renewable energy for heating would not eliminate these emissions.
Brimstone’s innovation was to start not with limestone at all, but with calcium silicate rocks. These are abundant across the globe, and crucially, they do not release CO₂ when processed. The result is ordinary Portland cement — identical to the material the construction industry typically uses today — but with 60 percent less of the carbon penalty.
Even more promising, Brimstone’s process promises to produce three separate commodities: cement, supplementary cementitious materials, and alumina, the main feedstock for aluminum. Selling all three at commodity prices, Brandler explained, is what makes the business viable. “The goal is to get to a point where you don’t need to be green in order to buy our decarbonized cement,” Brandler said. “You just need to want cement.”
Brimstone already has a powerful partner in Amazon. The e-commerce giant has committed to buying Brimstone’s low-carbon cement as part of its Climate Pledge Fund. When CBS’s Wagner asked whether this was charity, Amazon’s Nick Ellis, principal of the Climate Pledge Fund, was clear.
“If anyone’s shopped at Amazon, you know that we are known for low prices,” Ellis said. “That’s driven by our attention to cost and detail inside the business. We will not be a large-scale off-taker of anything that is at a high premium over a long period of time.” He added that Amazon invests in companies like Brimstone because it sees a path to cost parity — and wants to lock in future supply.
Like Stegra, Brimstone faces the challenge of financing at scale. Cement plants cost around a billion dollars to construct — and to compete, the company must achieve economies of scale comparable to the incumbent industry. That remains a challenge. Still, Brandler argued, Brimstone’s model was designed to succeed regardless of the presence of subsidies or carbon prices. “The companies that are going to succeed around decarbonization are the ones that have an economic thesis that can work either way,” he said.
Catalytic Customers and Shifting Markets
Neither Stegra nor Brimstone can succeed alone, their leaders agreed. Both depend on catalytic customers —that is, large companies willing to sign off-take agreements and provide early demand, like Amazon and Mercedes. Without such partners, neither company could secure financing for billion-dollar plants or convince equipment manufacturers to invest.
For corporations like Amazon, the incentive is not just reputational. Ellis noted that Amazon’s first big climate bet, Rivian electric delivery vans, has now scaled to 25,000 vehicles within Amazon’s delivery fleet. Early investments in Brimstone and green steel companies like Electra follow the same logic: secure supply today, scale the technology, and enjoy lower costs tomorrow.
Cornelius Pieper, managing director and senior partner at BCG, echoed this point. He argued that even today, the “green premium” may be a bit of a misnomer. After all, he said, in consumer products, the cost increment of using green steel or cement is surprisingly small. In a washing machine, for instance, green steel would be a tiny share of the overall cost.
“To say decarbonization, even in the hard-to-abate sectors, is too expensive is not quite correct,” he said. “It’s more a question of how we can create mechanisms that help to distribute those costs a little more evenly across the value chain, rather than asking upstream producers to absorb them all.”
Pieper also noted that demand for green materials could shift quickly once corporate net-zero deadlines kick in. Companies that hesitate to secure supply may find themselves locked out.
“The moment to actually follow fast is now,” he warned. “If you’re not ready, you become a laggard before you know it.”
Of course, policy does play an important role. Europe’s carbon pricing and border taxes are creating clearer incentives for procuring low-carbon steel and cement. In the United States, by contrast, action remains fragmented at the state level, limiting broad market opportunities.
Ultimately, the scaling of greener solutions may need to largely depend on market forces, especially in the Global South, said Brimstone's Brandler.
“Finding these cost-advantage solutions that would be attractive irrespective of the carbon benefit will be fundamental,” Brandler said. “That’s in the DNA of what Brimstone is about.”
FAQs:
Q: Why are steel and cement considered hard-to-abate industries?
A: Steel and cement production account for nearly 20 percent of global emissions. Their processes release large amounts of CO₂ that cannot be eliminated by switching to renewable energy alone, making them especially difficult to decarbonize.
Q: How are companies like Stegra and Brimstone reducing emissions?
A: Stegra is replacing coal with green hydrogen in steelmaking, cutting emissions by up to 95 percent. Brimstone is producing cement from calcium silicate rock instead of limestone, avoiding process emissions and reducing the sector’s carbon footprint by 60 percent.
Q: What role do partnerships play in scaling green steel and low-carbon cement?
A: Partnerships with major buyers like Mercedes and Amazon provide early demand, reduce investor risk, and help secure financing for billion-dollar facilities. These collaborations are critical to achieving cost parity and scaling production.