Transforming the metals and mining, building materials, and plastics industries to make them compatible with sustainability targets will require increasing annual spending from $5.7 trillion to $9.2 trillion.
At a time when industry leaders are under pressure to meet the climate targets that aim for net-zero GHG emissions by 2050, a recent report by McKinsey & Company outlines how green material producers and buyers can capture the green-premium value from sustainable materials.
In Hoey’s view and that of his co-authors on the report, producers and buyers of some of the materials currently making the highest contributions to GHG emissions – steel, plastics, aluminum, and copper – should be looking into strategies to capture the green-premium value.
“The global supply-demand balance for low carbon aluminum is expected to stay balanced by 2030, leading to overall limited premiums,” the report reads. “That said, we might observe regional imbalances, and we do expect that ultralow-CO2 aluminum, requiring technology changes, will be undersupplied by 2030, leading to significantly higher premiums.”
Overall, McKinsey expects demand growth to outpace supply through 2030, driven by an increasing need for copper in modern applications, such as batteries and energy infrastructure, and by a slow project development pipeline.