Interview: Practitioners on Low-Carbon Materials — Cement, Steel, Timber

Cement and steel alone account for approximately 15% of global CO₂ emissions, making them the hardest-to-abate sectors in the construction industry. Yet across Europe and beyond, practitioners are deploying technologies that seemed impossible a decade ago: hydrogen-reduced steel, carbon-captured cement, and mass timber structures rising to 18 storeys. We spoke with industry leaders across procurement, engineering, and sustainability to understand where the value pools are emerging and who is positioned to capture them.

The low-carbon building materials market reached $275 billion in 2024 and is projected to grow to $588 billion by 2034. But the real story lies in the technology transitions and commercial models reshaping how we build. Here's what practitioners are learning on the front lines.

Why It Matters

Buildings account for 39% of global CO₂ emissions, with structural materials—concrete, steel, and timber—representing 60-65% of embodied carbon. The decarbonisation of these materials is not optional: EU regulations now mandate Environmental Product Declarations (EPDs) for public projects, and the US Federal Buy Clean Initiative covers 46% of American cement consumption.

For UK procurement teams, the business case extends beyond compliance. LEED-certified buildings command 13-36% sales premiums and lease 11% faster than conventional structures. Yet material-level green premiums of 15-25% translate to just 1-3% increases in total construction costs—a margin increasingly absorbed by forward-looking developers seeking regulatory certainty and brand differentiation.

The question is no longer whether low-carbon materials will dominate, but who will control the value creation as traditional supply chains transform.

Key Insights from Practitioners

On Cement Decarbonisation

"The industry spent years debating whether carbon capture would ever be economically viable at cement plants. Then Heidelberg Materials commissioned Brevik in Norway—the world's first industrial-scale cement CCS facility—and the conversation shifted overnight," explains a senior procurement director at a major UK contractor. "Now we're seeing seven large-scale CCUS projects across Europe targeting 8 million tonnes of net-zero cement annually by 2030."

The technology pathways are diversifying rapidly. Holcim's ECOPlanet cement, available in 34 markets, delivers 30-50% lower emissions through calcined clay and alternative fuels. Heidelberg Materials' evoBuild range includes products with 30% recycled aggregates. Startups like Sublime Systems are developing electrochemical processes that eliminate kilns entirely, achieving 90% CO₂ reduction.

"We're seeing a bifurcation in the market," notes a sustainability lead at a construction materials supplier. "Standard Portland cement is becoming a liability for public tenders, while low-carbon alternatives are moving from 'nice to have' to specification requirements. The real value capture is happening with companies that control both the technology and the supply chain."

On Green Steel Production

The steel sector has achieved what many thought impossible: near-zero emissions production at semi-industrial scale. SSAB's HYBRIT technology—a partnership with LKAB and Vattenfall—has produced over 5,000 tonnes of hydrogen-reduced sponge iron, with the byproduct being water instead of CO₂.

"Traditional blast furnace steelmaking emits 1.8 tonnes of CO₂ per tonne of crude steel. Hydrogen direct reduction with electric arc furnaces cuts that to 0.05 tonnes—a 95% reduction," explains an engineering manager familiar with the technology. "Customers like Volvo, Epiroc, and GE Vernova are already using HYBRIT-produced steel in vehicles, mining equipment, and wind turbines."

H2 Green Steel is targeting first commercial batches in 2025, with ambitions for 5 million tonnes annually by 2030. The constraint is not technology but infrastructure: gigawatt-scale electrolyser capacity, DR-grade iron ore (requiring 67%+ iron content), and massive renewable electricity expansion.

"The green premium for steel is real but manageable," observes a materials procurement specialist. "A 25% premium on steel translates to less than 1% increase on a typical construction project. The reputational and regulatory value far exceeds that cost."

On Mass Timber's Moment

Mass timber construction has moved from architectural novelty to mainstream commercial viability. The global CLT market reached $1.71 billion in 2024 and is projected to grow at 12.9% CAGR to $5.02 billion by 2033. British Columbia's 2024 Building Code now permits mass timber buildings up to 18 storeys.

"CLT sequesters carbon rather than emitting it—a complete inversion of the concrete and steel paradigm," notes an architect specialising in timber structures. "We're seeing prefabrication reduce construction time by 35% while achieving CNC tolerances within 0.2mm. The precision enables just-in-time delivery that transforms site logistics."

Europe dominates with 54% market share, driven by sustainability policies and advanced manufacturing facilities. Austria reported 40% of new multi-family units using CLT in 2023. In Oregon, Timberlab broke ground on a 190,000 square-foot CLT facility in February 2025—one of the largest in the United States.

Where the Value Pools Are

The low-carbon materials transition is creating distinct value pools across the supply chain:

Technology Providers: Companies controlling carbon capture, hydrogen reduction, or electrochemical processes capture premium margins. Holcim invested $75 million in Sublime Systems; Heidelberg Materials committed €1.5 billion to CCUS projects through 2030.

Certified Producers: Manufacturers with verified low-carbon products command 15-25% premiums. Holcim's circular and low-carbon products now represent 36% of revenue.

Procurement Aggregators: Platforms that aggregate demand and guarantee offtake reduce risk for producers. Advance Market Commitments are emerging as contractual mechanisms to de-risk investments.

Compliance and Certification: As regulations tighten, companies providing EPDs, lifecycle assessments, and carbon accounting services capture growing advisory fees. The compliance cost represents 12-15% of material specification budgets in developed markets.

The emerging $180-220 billion opportunity in Asia-Pacific suggests that value capture will increasingly shift to companies that can scale manufacturing in developing markets while maintaining certification integrity.

What's Working

Heidelberg Materials Brevik CCS

The world's first industrial-scale cement carbon capture facility became operational in June 2025 in Norway. Capturing 400,000 tonnes of CO₂ annually—50% of plant emissions—and integrating with the Northern Lights storage infrastructure, Brevik proves that CCUS can function at cement production scale. The project received substantial EU Innovation Fund support, demonstrating how public-private partnerships can de-risk first-of-a-kind investments.

SSAB Fossil-Free Steel Buildings

In October 2024, SSAB partnered with Parmaco to construct the world's first concept building using 100% fossil-free steel, scheduled for completion in 2025. GE Vernova incorporated SSAB Zero steel into onshore wind turbines in September 2025—the first near-zero CO₂ steel deployed in the wind industry. These reference projects create market pull by demonstrating technical feasibility and building buyer confidence.

Ireland's Clinker Replacement Mandate

Ireland's 2024 mandate requires 30% clinker replacement in public projects and bans CEM I (pure Portland cement). This regulatory clarity creates guaranteed demand, enabling producers to invest in alternative binder capacity with reduced market risk. The policy demonstrates how procurement specifications can accelerate technology adoption more effectively than carbon pricing alone.

What Isn't Working

Green Hydrogen Economics

At current prices of $4-6 per kilogram, green hydrogen remains expensive compared to natural gas-based alternatives. Break-even for hydrogen-based steel requires approximately $1.63/kg—a threshold that requires massive electrolyser scale and cheap renewable electricity. SSAB's withdrawal from $500 million DOE funding negotiations in January 2025 signals that even leading players find US deployment economics challenging.

Standards and Code Barriers

Many alternative binders lack building code approval, limiting their use to non-structural applications. The absence of harmonised standards for geopolymers and calcium sulfoaluminate cements forces project-by-project engineering justification. Mass timber faces similar friction: while fire-resistant designs exist, insurance and permitting remain inconsistent across jurisdictions.

Infrastructure Gaps

CCUS requires CO₂ transport pipelines and geological storage sites that don't yet exist at scale. The 2030 timeline for multiple Holcim and Heidelberg projects depends on Northern Lights and similar infrastructure coming online. Without coordinated infrastructure investment, technology-ready facilities cannot achieve their decarbonisation potential.

Supply Chain Constraints

DR-grade iron ore (67%+ iron content) suitable for hydrogen reduction represents a small fraction of global supply. Scaling H₂-DRI-EAF steelmaking requires either expanding high-grade ore mining or developing beneficiation technologies for lower-grade deposits. Similarly, wide lamstock boards for fire-rated mass timber buildings command significant premiums due to limited sawmill capacity.

Key Players

Established Leaders

HYBRIT (SSAB/LKAB/Vattenfall) — Swedish consortium pioneering hydrogen-based steel. Commercial plant launching 2026 with 1.2M tonnes/year capacity.
Heidelberg Materials — Global cement leader with evoZero net-zero cement. World's first CCS cement plant at Brevik, Norway capturing 400,000 tonnes CO2/year.
ArcelorMittal — World's largest steelmaker with hydrogen-DRI facilities in Germany, Belgium, and Spain.
Stora Enso — Leading cross-laminated timber (CLT) manufacturer for mass timber construction.

Emerging Startups

H2 Green Steel — Building fossil-fuel-free steel plant in Sweden. €750M EIB funding, production starting 2024-2026.
CarbonCure — Injects CO2 into concrete during production. Used in 600+ plants globally.
Sublime Systems — Electrochemical cement production eliminating kiln emissions.
Brimstone Energy — Carbon-negative cement technology using silicate rocks.

Key Investors & Funders

EU Innovation Fund — €143M to HYBRIT, €3.6B to green industrial projects.
European Investment Bank — €750M to H2 Green Steel.
Breakthrough Energy Ventures — Backing cement and steel decarbonization startups.

Action Checklist

Map your materials exposure: Audit current cement, steel, and timber procurement by volume, supplier, and carbon intensity. Identify which specifications can accept low-carbon alternatives without engineering changes.
Establish supplier partnerships: Engage with Holcim, Heidelberg Materials, SSAB, and leading CLT manufacturers to understand product roadmaps and secure preferential access as low-carbon supply remains constrained.
Specify EPDs in tenders: Require Environmental Product Declarations for structural materials in all new projects. Use tools like EC3 (Embodied Carbon in Construction Calculator) to benchmark and compare supplier offerings.
Model total cost of ownership: Factor in regulatory trajectory, carbon pricing scenarios, and certification premiums when evaluating material choices. The 15-25% material premium often disappears when lifecycle and compliance costs are included.
Pilot emerging technologies: Allocate a portion of procurement volume to LC3 cement, recycled steel, or mechanically-fastened CLT to build internal capability and supplier relationships before regulatory mandates.
Engage policymakers on standards: Participate in industry consultations on building codes, alternative binder approvals, and mass timber fire ratings. Regulatory clarity accelerates market development and reduces first-mover risk.
Track green premium trends: Monitor material-level premiums quarterly. Current 15-25% gaps are projected to compress to 5-10% by 2030 in key markets as manufacturing scales.

FAQ

Q: How significant is the green premium for low-carbon cement, and how do we justify it to project stakeholders? A: Low-carbon cement currently carries a 15-25% material premium, but this translates to less than 1% increase in total construction costs because cement represents a small fraction of overall project spend. AWS absorbed a 21% premium for Holcim ECOPact on a data centre project because net-zero compliance delivered greater value than the marginal cost. Frame the conversation around regulatory risk mitigation, certification benefits, and the trajectory toward green premium compression—premiums are expected to halve by 2030 as manufacturing scales.

Q: Is hydrogen-based steel production ready for commercial procurement? A: SSAB's HYBRIT technology has proven technical viability with 5,000+ tonnes produced and commercial deliveries to Volvo, Epiroc, and GE Vernova. However, scale remains limited and lead times are extended. H2 Green Steel targets commercial production in 2025, but hydrogen costs and renewable electricity availability create geographic constraints. For UK procurement teams, consider recycled EAF steel (available now at lower premiums) as a bridge while monitoring hydrogen-based capacity expansion in Sweden and emerging European projects.

Q: When will mass timber become cost-competitive with concrete and steel for mid-rise construction? A: For many applications, mass timber is already cost-competitive when construction time savings are factored in. Prefabrication reduces on-site construction by 35%, offsetting material premiums through labour savings and faster occupancy. The 2024 IBC now permits 100% exposed mass timber on ceilings and beams, expanding aesthetic applications. The constraint is less about cost than about designer familiarity, insurance acceptance, and local code adoption. Projects in British Columbia, Austria, and Nordic countries routinely specify CLT for mid-rise construction at competitive total project costs.

Sources

Heidelberg Materials. (2024). "CCUS Factsheet: Brevik CCS Project." https://www.heidelbergmaterials.com/sustainability/ccus
SSAB. (2024). "HYBRIT: Six Years of Research Paves the Way for Fossil-Free Iron and Steel Production." https://www.ssab.com/en/fossil-free-steel
Holcim. (2024). "Climate Report 2024." https://www.holcim.com/sustainability/climate-action
Straits Research. (2024). "Cross-Laminated Timber Market Size and Share Report, 2024-2033."
InsightAce Analytic. (2024). "Low-Carbon Construction Material Market Analysis and Forecast to 2034."
McKinsey & Company. (2024). "Capturing the Green-Premium Value from Sustainable Materials."
IEEFA. (2024). "Hydrogen Unleashed: Opportunities and Challenges in the Evolving H₂-DRI-EAF Pathway Beyond 2024."
Clean Air Task Force. (2025). "Recasting the Future: Policy Approaches to Drive Cement Decarbonization."
Mass Timber Conference. (2025). "Mass Timber Performance Index 2025."
Nature Communications. (2023). "Global Green Hydrogen-Based Steel Opportunities Surrounding High Quality Renewable Energy and Iron Ore Deposits."

The decarbonisation of cement, steel, and timber represents both an existential challenge and a generational opportunity. Procurement teams that build supplier relationships, develop internal capability, and engage with evolving regulations will capture disproportionate value as the construction industry's $275 billion low-carbon materials market expands to $588 billion by 2034. The technology is proven; the question is who moves fastest to secure supply and specification advantage.