Green Demand Policy Playbook

A toolkit for governments to stimulate green demand

Industrial decarbonisation is within reach. The technologies and solutions already exist within heavy industry and transport to enable rapid decarbonisation, but progress to start production of these solutions is lagging.  Targeted policies are required now to drive investment and speed up construction of green facilities.

Uncertain demand and a lack of incentives to buy green products is stalling industrial decarbonisation progress, with producers and customers at a stalemate due to lower price of higher-carbon products. By providing incentives and setting mandates to use low- and near zero-carbon materials, chemicals and fuels, governments can level the playing field for buyers, create market certainty, and improve the business case for the production of these green commodities.

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The ITA’s open letter, endorsed by global business leaders and organisations that represent more than 1,000 companies and financial institutions, calls on governments to take urgent policy action to stimulate demand for green industrial materials, chemicals and fuels.  

A range of evidence-based policy measures is available to governments to increase demand for low- and near-zero-carbon materials, chemicals and fuels - such as green ammonia, green steel and cement, and sustainable aviation fuels – to unlock supply.

Key measures highlighted in the Green Demand Policy Playbook:

Carbon pricing, which is critical to level the playing field between green and carbon-intensive commodities, and is most effective when it provides market predictability, reaches a sufficient level to make low- and near-zero-carbon materials competitive, and addresses risks of carbon leakage. 

Mandatory mechanisms, such as mandatory quotas and fuel mandates, and embodied carbon intensity limits on industrial products like automotives and on buildings, which have proven powerful tools to create certainty of market scale-up, for example, in aviation in Europe.  

Government procurement, in particular green public procurement of green cement and steel. 

Financial support mechanisms and government backed intermediaries that help bridge the remaining gap between the price of green commodities and the willingness to pay of potential buyers (especially in value chains that can be sensitive from a social perspective like fertilisers for agriculture), such as subsidies, contracts for difference, and state-backed intermediaries. 

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