Policy could unlock US$1trln in green project investments

An open letter, led by the Industrial Transition Accelerator (ITA), urges governments to use policy to stimulate demand for green products

Implementing the right policies could bring more than 500 'green industrial plants' to construction by 2030, the letter suggests.

It is endorsed by more than 40 global business leaders and 700+ financial institutions, including The Glasgow Finance Alliance for Net Zero - a coalition from more than 50 countries.

The letter argues a lack of policies has led to insufficient demand for green products, resulting in uncertainty on long-term investments.

Sustainable projects are therefore stalling, with cheaper, higher-carbon equivalents readily available.

Data from the Mission Possible Partnership’s Global Project Tracker reveals the pipeline of green projects - in aluminium, cement, chemicals, steel, aviation and shipping industries - is increasing, but less than 20% are operational, or have the finance and approvals necessary to begin construction.

Adding to this, since April this year, only eight facilities globally have reached Final Investment Decision. This leaves 561 announced but not yet definitively confirmed, 300 of which have been waiting investment decisions for the past two years.

If continuing at this rate, the letter claims it will take 35 years for sufficient facilities to be approved to meet climate ambitions.

There are specific calls in the letter, namely:

• Supporting global carbon pricing and fuel standard measures.
• Setting and enforcing mandatory quotas for low- and near-zero-carbon fuels and products.
• Setting mandatory targets for low- and near-zero-carbon materials in public procurement.
• Setting stringent and progressively tightening limits on whole-life carbon.
• Implementing mechanisms that help bridge the price gap between green commodities and potential buyers.

Alongside the letter, the ITA has offered solutions through the Green Demand Policy Playbook.