Case study: Low-carbon materials (cement, steel, timber) — a pilot that failed (and what it taught us)

The cement and steel industries together account for approximately 14% of global CO₂ emissions, with Asia-Pacific responsible for over 70% of cement production and 65% of steel output as of 2024. When a consortium of three major construction developers in Southeast Asia launched an ambitious low-carbon materials pilot in 2023, they projected a 40% reduction in embodied carbon across a 12-building mixed-use development. By late 2024, the pilot had collapsed—not due to technical failures in the materials themselves, but because of cascading data quality issues, misaligned measurement standards, and what practitioners now call "measurement theater." This case study dissects what went wrong and extracts actionable lessons for investors, developers, and policymakers navigating the low-carbon materials transition.

Why It Matters

The urgency of decarbonizing construction materials cannot be overstated. According to the International Energy Agency's 2024 Global Cement and Steel Transition Report, cement production alone generates 2.4 billion tonnes of CO₂ annually, while steel contributes an additional 3.6 billion tonnes. The Asia-Pacific region dominates both sectors: China produces 55% of global cement, with India, Vietnam, and Indonesia collectively adding another 15%. For steel, China's output reached 1.02 billion tonnes in 2024, representing 54% of global production.

The economic stakes are equally significant. BloombergNEF estimates that the global low-carbon building materials market will reach $187 billion by 2030, with Asia-Pacific capturing 45% of that value. However, realizing this potential requires solving a fundamental problem: the absence of standardized, verifiable data on embodied carbon. A 2025 analysis by the World Green Building Council found that 68% of Environmental Product Declarations (EPDs) for cement products in Asia-Pacific contained inconsistencies that rendered cross-product comparisons unreliable.

This pilot failure illuminates a critical gap between climate ambition and implementation capacity. When measurement systems produce unreliable data, capital allocation becomes guesswork, regulatory compliance becomes theater, and genuine emission reductions become impossible to verify. For investors deploying capital into green construction, understanding these failure modes is essential for due diligence.

Key Concepts

Low-Carbon Materials: Construction inputs—primarily cement, steel, and timber—engineered or sourced to minimize lifecycle greenhouse gas emissions. Low-carbon cement includes blended cements using supplementary cite materials like fly ash or slag, as well as novel chemistries such as geopolymers. Low-carbon steel encompasses electric arc furnace (EAF) production using renewable energy and green hydrogen-based direct reduced iron (DRI). Mass timber, including cross-laminated timber (CLT), sequesters carbon while displacing emission-intensive materials.

Embodied Carbon: The total greenhouse gas emissions associated with material extraction, manufacturing, transportation, and installation—distinct from operational carbon generated during building use. For typical commercial buildings, embodied carbon represents 30-50% of lifecycle emissions, a proportion increasing as operational efficiency improves.

Additionality: A principle requiring that claimed emission reductions would not have occurred without the specific intervention being credited. In the low-carbon materials context, additionality demands evidence that material substitution or process changes produced reductions beyond business-as-usual trajectories. Failed additionality claims plagued the Southeast Asia pilot when baseline assumptions proved inaccurate.

Scope 3 Emissions: Indirect emissions occurring across a company's value chain, including purchased materials and services. For construction developers, Scope 3 typically comprises 80-95% of total emissions, with cement and steel as primary contributors. Accurate Scope 3 accounting requires reliable supplier data—precisely what the pilot lacked.

Measurement Theater: Sustainability reporting activities that create an appearance of rigorous carbon accounting without producing actionable or accurate data. Characteristics include reliance on generic industry averages rather than facility-specific measurements, incomplete system boundaries, and metrics designed for public relations rather than decision-making.

What's Working and What Isn't

What's Working

EPD Harmonization Through ECO Platform: The ECO Platform's program for mutual recognition of EPDs across member countries has begun reducing data inconsistencies. Japan's adoption of EN 15804+A2 standards in 2024, aligned with European frameworks, enables Japanese low-carbon cement producers to supply verified products to multinational projects. Singapore's Building and Construction Authority now requires ECO Platform-aligned EPDs for all public construction projects exceeding S$50 million.

Facility-Level Carbon Intensity Disclosure: Leading Asian steel producers, including POSCO (South Korea) and Nippon Steel (Japan), have implemented facility-specific carbon intensity reporting verified by third-party auditors. This granular disclosure enables downstream buyers to make informed procurement decisions rather than relying on national or industry averages. POSCO's Pohang Works reported carbon intensity of 1.78 tonnes CO₂ per tonne of steel in 2024, compared to the global average of 1.91 tonnes.

Digital MRV Integration: Singapore's Housing and Development Board has piloted blockchain-based material tracking for three public housing projects, creating immutable records linking specific material batches to verified EPDs. Early results show 94% data completeness compared to 61% for conventional documentation methods. The system reduces audit costs by approximately 35% while improving data reliability.

Mass Timber Certification Scaling: The Programme for the Endorsement of Forest Certification (PEFC) expanded its Asia-Pacific coverage to 45 million hectares of certified forest by 2025. This expansion, particularly in Australia, New Zealand, and Malaysia, provides verified low-carbon timber supply chains that avoid the deforestation-linked emissions plaguing uncertified sources.

What Isn't Working

Generic Emission Factors: The failed Southeast Asia pilot relied on national average emission factors from government databases rather than supplier-specific data. When auditors later obtained actual production data from the cement suppliers, emission intensities were 22% higher than the national averages used for project claims. This discrepancy alone negated the projected emission reductions.

Incomplete System Boundaries: Initial calculations excluded transportation emissions for imported materials. When a shortage of local low-carbon cement required sourcing from a facility 1,200 kilometers distant, transport emissions added 15% to the embodied carbon—completely absent from reported figures until post-hoc analysis revealed the gap.

Verification Gaps and Conflicts of Interest: The pilot's EPD verification was conducted by a firm that also provided consulting services to the cement supplier. This structural conflict of interest contributed to insufficiently rigorous data validation. Post-failure review identified at least four material inputs with EPDs containing mathematical errors in lifecycle assessment calculations.

Temporal Mismatch: Low-carbon claims were based on projected grid decarbonization trajectories that assumed rapid renewable energy deployment. When the regional grid's renewable share reached only 28% in 2024 against a projected 41%, the electricity-linked emissions for EAF steel exceeded estimates by 31%. The pilot's timeline and carbon calculations operated on different temporal assumptions that were never reconciled.

Key Players

Established Leaders

Holcim (Switzerland/Global): The world's largest cement producer with significant Asia-Pacific operations. Holcim's ECOPact low-carbon concrete range reduces embodied carbon by 30-100% compared to standard concrete, with facilities in Australia, India, and the Philippines producing locally. The company committed to validated science-based targets and operates internal carbon pricing at $75/tonne.

Nippon Steel (Japan): Japan's largest steelmaker, producing 44 million tonnes annually. Nippon Steel's COURSE50 technology reduces blast furnace emissions through hydrogen injection and carbon capture. The company achieved 1.68 tonnes CO₂ per tonne of steel at select facilities in 2024, approaching the threshold for premium "green steel" pricing.

POSCO (South Korea): A global top-5 steel producer with $65 billion in 2024 revenues. POSCO's HyREX technology for hydrogen-based steelmaking reached commercial demonstration in 2024. The company partners with Australian mining firms to develop integrated green iron supply chains.

UltraTech Cement (India): India's largest cement producer, controlling 24% domestic market share. UltraTech's calcined clay cement technology reduces clinker content by 50%, cutting production emissions proportionally. The company commissioned Asia's largest cement plant carbon capture installation in 2024 at its Vikram Cement Works in Madhya Pradesh.

Sime Darby Plantation (Malaysia): Southeast Asia's largest sustainable timber supplier with 200,000 hectares of FSC-certified plantation forest. The company's engineered timber products, including CLT for construction, provide verified carbon sequestration data through ISO 14064-certified supply chains.

Emerging Startups

Brimstone Energy (USA, operating in Asia): Developing carbon-negative cement using calcium silicate rocks instead of limestone. The process produces no direct CO₂ emissions and stores CO₂ in byproducts. Brimstone announced a 2026 pilot production facility partnership with an undisclosed Asian developer.

H2 Green Steel (Sweden, Asian expansion): Constructing Europe's first large-scale green steel plant and negotiating supply agreements with Asian automakers. The company's fossil-free steel using green hydrogen will enter Asian markets by 2027 at approximately 15% premium to conventional steel pricing.

Biomason (USA, Asia-Pacific distribution): Produces biocement grown through bacterial mineralization at ambient temperatures. The process eliminates kiln-related emissions and produces cement tiles and blocks with 80% lower embodied carbon. Biomason established Singapore distribution partnerships in 2024.

CarbonCure Technologies (Canada, Asia expansion): Injects captured CO₂ into concrete during mixing, permanently mineralizing carbon while strengthening the material. CarbonCure technology is deployed in over 50 ready-mix plants across Japan, South Korea, and Australia as of 2025.

Prometheus Materials (USA, entering Asia): Produces zero-carbon bio-cement using microalgae cultivation. The photosynthetic production process consumes atmospheric CO₂ while producing binding agents. Prometheus announced a 2026 pilot with a Japanese general contractor for specialty applications.

Key Investors & Funders

Temasek Holdings (Singapore): Singapore's sovereign wealth fund with $382 billion in assets under management. Temasek's dedicated decarbonization portfolio has deployed over $3 billion into low-carbon materials, including investments in Holcim's Asia operations and multiple construction technology ventures.

Asian Development Bank (ADB): Multilateral development bank providing concessional financing for low-carbon infrastructure across Asia-Pacific. ADB's $3 billion Green Infrastructure Facility specifically supports low-carbon cement and steel procurement in developing member countries, with blended finance structures reducing risk for commercial investors.

Breakthrough Energy Ventures: Bill Gates-founded climate venture fund with $2 billion under management. Breakthrough invested in Brimstone Energy, Boston Metal (electrolysis-based steelmaking), and other materials decarbonization technologies targeting Asian market deployment.

Energy Transition Fund (Australia): Australian government-backed $1.5 billion fund supporting low-carbon industrial transitions. The fund provided $320 million for green hydrogen production facilities serving steel manufacturing and has committed additional capital for low-carbon cement production.

SoftBank Vision Fund: Through its sustainability-focused allocation, SoftBank has invested in construction decarbonization technologies including digital MRV platforms and low-carbon materials marketplaces serving Asian construction markets.

Examples

1. Singapore's Tengah Eco-Town Development (Successful Adaptation): After observing the Southeast Asian pilot failure, Singapore's Housing and Development Board restructured its low-carbon materials requirements for the 42,000-unit Tengah eco-town. Instead of accepting generic EPDs, HDB mandated facility-specific data from shortlisted suppliers, with third-party verification by Singapore-accredited laboratories. The approach added approximately 2% to procurement costs but produced auditable emissions data. By 2025, the project achieved verified 35% embodied carbon reduction compared to conventional public housing baselines—below initial 40% targets but grounded in reliable measurement.

2. Japan's Yokohama City Mixed-Use Failure and Recovery: A 2023 commercial development in Yokohama initially claimed 45% embodied carbon reduction through low-carbon concrete and steel procurement. Post-completion verification revealed that actual reductions were only 18% due to scope boundary errors that excluded structural steel transportation and failed to account for construction waste recycling. The developer, rather than concealing the discrepancy, commissioned an independent audit and published the findings. This transparency enabled correcting emission factors for subsequent phases, ultimately achieving 38% verified reduction across the full development by 2025. The lesson: early failure disclosure enables systematic correction.

3. Indonesia's Java Green Industrial Park (Pilot Collapse Case Study): The Southeast Asian pilot referenced throughout this case study centered on a green industrial park in West Java. The consortium projected 40% embodied carbon reduction using locally produced low-carbon cement, imported EAF steel, and certified timber for secondary structures. Failure cascaded through multiple channels: cement suppliers provided EPDs based on European facility data rather than Indonesian production; steel transportation from Australian EAF facilities added unbudgeted emissions; timber certification verification revealed incomplete chain-of-custody documentation for 30% of supplied material. When financiers requested verification for green bond proceeds allocation, the data gaps made certification impossible. The project continues using conventional materials while the consortium restructures its procurement and verification systems for a 2027 restart.

Action Checklist

FAQ

Q: How can investors distinguish genuine low-carbon materials claims from measurement theater? A: Focus on three verification layers: (1) facility-specific rather than industry-average emission factors; (2) independent third-party EPD certification with no financial relationship to suppliers; (3) complete system boundaries including transportation, on-site processes, and construction waste. Request actual supplier invoices and cross-reference quantities with EPD coverage. Genuine claims typically show documented variance from initial estimates—projects claiming perfect alignment with projections warrant skepticism.

Q: What premium should investors expect for verified low-carbon materials versus conventional alternatives? A: As of 2025, verified low-carbon cement commands 8-15% premiums in Asia-Pacific markets, while low-carbon steel premiums range from 15-35% depending on production route (EAF versus hydrogen DRI). Mass timber typically costs 5-20% more than concrete for equivalent structural applications but may reduce foundation costs due to lighter weight. These premiums are declining approximately 3-5% annually as production scales. Projects with credible decarbonization claims can access green bond financing at 15-40 basis point spreads below conventional rates, partially offsetting material premiums.

Q: Which Asia-Pacific jurisdictions have the most robust low-carbon materials regulations? A: Singapore leads with mandatory EPD requirements for public projects and a Green Mark certification scheme incorporating embodied carbon. Japan's Building Standards Law revision (effective 2025) requires lifecycle carbon assessment for buildings exceeding 2,000 square meters. Australia's National Construction Code 2025 includes embodied carbon provisions, though compliance pathways remain flexible. South Korea's Green Building Act establishes Scope 3 disclosure requirements for large developments. China's national framework remains voluntary but increasingly influences provincial building codes in Guangdong and Jiangsu provinces.

Q: How do failed pilots like the Indonesia case affect capital availability for future low-carbon materials projects? A: Paradoxically, well-documented failures can strengthen subsequent capital deployment by clarifying due diligence requirements. Investors interviewed for this case study indicated that transparency about the Indonesia failure increased their confidence in Singapore's Tengah procurement approach, which explicitly addressed the documented failure modes. The critical factor is whether failures are attributed to fundamental technology problems (discouraging) or to data quality and process issues that can be corrected (opportunity for improved approaches). The Indonesia case clearly falls in the latter category, suggesting capital will flow to projects demonstrating lessons-learned integration.

Q: What role does carbon pricing play in accelerating low-carbon materials adoption in Asia-Pacific? A: Carbon pricing creates commercial incentives for emissions reduction but current price levels remain insufficient to drive full material substitution. Singapore's carbon tax reached S$25/tonne in 2024 and will increase to S$50-80/tonne by 2030. Japan's carbon pricing system prices at approximately ¥3,000/tonne ($20 USD). These levels add less than 3% to cement costs—meaningful but not transformational. More significant are emerging compliance requirements for carbon disclosure, which create regulatory risk for high-embodied-carbon developments even without stringent carbon prices. The combination of modest carbon pricing with increasing disclosure mandates appears to be the effective policy package in Asian markets.

Sources

International Energy Agency. "Global Cement and Steel Transition Report 2024." IEA Publications, Paris, 2024.
BloombergNEF. "Low-Carbon Building Materials Market Outlook 2024-2030." Bloomberg LP, 2024.
World Green Building Council. "Embodied Carbon in Construction: Asia-Pacific Data Quality Assessment." London, 2025.
ECO Platform. "Program Operator Mutual Recognition Framework." Brussels, 2024.
Asian Development Bank. "Green Infrastructure Investment Guidelines for Low-Carbon Materials." Manila, 2024.
Singapore Building and Construction Authority. "Green Mark 2021: Embodied Carbon Requirements Technical Guide." Singapore, 2024.
Nippon Steel Corporation. "Sustainability Report 2024: Carbon Intensity Disclosure." Tokyo, 2024.
Housing and Development Board Singapore. "Tengah Town Development: Sustainable Materials Procurement Framework." Singapore, 2025.