Opening Early Market for Low-Carbon Building Materials by Public Procurement in China

Investment Rating - The report does not explicitly state an investment rating for the low-carbon building materials industry in China Core Insights - The transition to low-carbon building materials is essential for China to meet its dual carbon targets, as emissions from building materials accounted for over 20% of the country's total emissions in 2020, with cement and steel being the largest contributors [10][12] - Government procurement for public projects is a significant driver of demand for building materials, and utilizing low-carbon procurement can create an early market for these materials, leading to coordinated emissions reductions across the industrial chain [13][36] - The report emphasizes the need for a transition from green procurement to low-carbon procurement, highlighting the importance of establishing clear definitions, improved data transparency, and performance standards for building materials [19][23] Summary by Sections Emissions and Market Potential - In 2020, CO2 emissions from building materials exceeded 2.3 billion tons, with cement and steel contributing 53% and 36% of emissions respectively [10][12] - By 2030, public procurement could generate demand for 45 million tons of low-emissions steel and 277 million tons of low-carbon concrete materials, leading to significant emissions reductions [36][41] Transitioning to Low-Carbon Procurement - The report outlines five critical components for transitioning to low-carbon procurement, including defining the scope, improving data transparency, establishing carbon performance standards, providing incentives, and ensuring effective implementation [23][25] - Current green building materials focus on durability and health metrics, with limited disclosure on CO2 emissions, necessitating a shift towards low-carbon metrics [19][53] Cost-Effectiveness and Economic Benefits - Using low-carbon materials can reduce emissions with minimal cost increases, with an example showing an increase of only 8 RMB/square meter while achieving significant CO2 reductions [43][45] - The report indicates that while near-zero carbon materials may have higher initial costs, advancements in technology could limit these increases significantly by 2030 [43][44] Product Carbon Accounting and Certification - China's carbon footprint management for building materials is in its early stages, with a need for localized material databases and robust standards to enhance low-carbon practices [47][48] - The report highlights the importance of developing Product Category Rules (PCRs) to ensure consistency and comparability in low-carbon building materials [48][49] Implementation and Innovation - Priority areas for low-carbon material applications include infrastructure projects, public buildings, and rural housing, which can benefit from policy-driven low-carbon standards [59][60] - Financial incentives and performance-based standards are recommended to promote the adoption of low-carbon materials in public procurement [63][64]