Trend watch: Low-carbon materials (cement, steel, timber) in 2026 — signals, winners, and red flags

Cement and steel production alone account for approximately 14% of global CO₂ emissions—more than the entire aviation and shipping industries combined (Global Cement and Concrete Association, 2024). Yet in 2025, fewer than 3% of construction materials procured in Europe carried verified Environmental Product Declarations (EPDs), creating a vast measurement gap that enables greenwashing while obscuring genuine decarbonisation progress. For sustainability leads navigating this landscape, distinguishing between meaningful signals and measurement theatre has become the essential skill.

Why It Matters

The construction materials sector faces an existential transformation. The EU's Carbon Border Adjustment Mechanism (CBAM), fully operational from 2026, imposes carbon costs on imported cement, steel, aluminium, and fertilisers—fundamentally reshaping competitive dynamics. European producers paying €80-100 per tonne of CO₂ under the Emissions Trading System now compete on more equal footing with historically cheaper imports, but only if their decarbonisation investments translate into genuinely lower carbon intensities (European Commission, 2025).

For sustainability leads, this creates both opportunity and risk. Organisations that can verify lower Scope 3 emissions from construction materials gain procurement advantages as CBAM-adjusted costs reshape supply chains. However, reliance on unverified claims—common in an industry where "low-carbon" lacks standardised definition—exposes organisations to regulatory penalties, reputational damage, and stranded inventory as enforcement intensifies.

The financial stakes are substantial. McKinsey estimates the green premium for low-carbon steel and cement could generate €50-80 billion annually in value creation by 2030, but only for producers who can credibly demonstrate emissions reductions. Those relying on accounting arbitrage or offset-heavy claims face margin compression as buyers increasingly demand primary emissions data (McKinsey & Company, 2024).

Supply chain transparency has moved from voluntary aspiration to regulatory requirement. The EU Construction Products Regulation update, effective from 2027, mandates digital product passports containing granular environmental data for all structural materials. The Corporate Sustainability Due Diligence Directive extends liability for supply chain emissions to purchasers, making accurate Scope 3 accounting a legal necessity rather than a reporting nicety.

Key Concepts

Environmental Product Declarations (EPDs) and Data Quality

EPDs provide standardised, third-party verified statements of a product's environmental impacts across its lifecycle. However, EPD quality varies enormously. Product-specific EPDs based on actual manufacturing data deliver accuracy within 5-10%, while industry-average EPDs may diverge from actual product impacts by 50% or more. The critical distinction lies in verification scope: facility-specific versus generic data, cradle-to-gate versus cradle-to-grave boundaries, and the treatment of electricity grid factors (European Aluminium Association, 2024).

Carbon Intensity Benchmarks

Meaningful comparison requires consistent metrics. For cement, the standard measure is kg CO₂e per tonne of cite produced (clinker-equivalent), with 2024 global averages around 620 kg CO₂/t and best-available technology achieving 400-450 kg CO₂/t. For steel, the metric is t CO₂e per tonne of crude steel, with blast furnace-basic oxygen furnace (BF-BOF) routes averaging 1.8-2.2 t CO₂/t versus electric arc furnace (EAF) routes at 0.3-0.6 t CO₂/t depending on scrap content and electricity source. Timber's complexity lies in its potential for carbon sequestration, requiring separate accounting for biogenic carbon versus processing emissions.

Measurement Theatre vs. Genuine Decarbonisation

"Measurement theatre" describes the proliferation of impressive-sounding claims that dissolve under scrutiny. Common patterns include: comparing against outdated baselines rather than current best practice; scope limitations that exclude dominant emission sources; reliance on renewable energy certificates that don't reflect actual electricity consumption; and offset portfolios of questionable additionality. Genuine decarbonisation claims should reference absolute emissions reductions, verified against product-specific boundaries, with clear disclosure of methodological choices.

Scope 3 Category 1 (Purchased Goods) Accounting

For construction companies and property developers, purchased materials typically constitute 70-90% of Scope 3 emissions and 50-70% of total carbon footprint. Accurate Scope 3 accounting requires transitioning from spend-based estimates (cost × emission factor) to supplier-specific data based on actual production processes. This transition reveals significant variance: two nominally identical products can differ by 400% in embodied carbon depending on manufacturing route, energy source, and raw material origin.

Sector-Specific KPI Table

Material	Carbon Intensity (Conventional)	Carbon Intensity (Low-Carbon)	Green Premium (2025)	EPD Availability
Portland Cement	850-950 kg CO₂/t	400-550 kg CO₂/t	15-30%	25% of EU production
Blended Cement	550-700 kg CO₂/t	300-450 kg CO₂/t	10-20%	35% of EU production
Primary Steel (BF-BOF)	1.8-2.2 t CO₂/t	1.2-1.6 t CO₂/t	20-40%	40% of EU production
EAF Steel (Scrap)	0.4-0.7 t CO₂/t	0.15-0.35 t CO₂/t	5-15%	60% of EU production
Structural Timber (CLT)	-500 to +150 kg CO₂/m³	-700 to -200 kg CO₂/m³	0-10%	55% of EU production
Aluminium (Primary)	12-18 t CO₂/t	2-6 t CO₂/t	25-45%	50% of EU production

What's Working and What Isn't

What's Working

Supplier engagement programmes with verification requirements are delivering measurable improvements. Companies requiring facility-specific EPDs and conducting periodic audits report Scope 3 emissions 15-25% lower than those using industry-average factors—partly from better data, partly from supplier selection effects that favour genuinely lower-carbon producers. Heidelberg Materials' "Supplier CO₂ Performance Rating" system has driven verified emissions reductions among its aggregate suppliers averaging 18% over three years (Heidelberg Materials, 2025).

Demand aggregation for low-carbon materials addresses the chicken-and-egg problem where producers hesitate to invest in decarbonisation without guaranteed markets. The First Movers Coalition, coordinating procurement commitments from 95 companies worth $12 billion, has catalysed investments in near-zero steel and cement production that wouldn't otherwise achieve financial close. SteelZero signatories, now representing 50 million tonnes of annual procurement, have demonstrated that credible forward demand accelerates capital deployment.

Hybrid material systems that substitute high-carbon components with lower-impact alternatives achieve reductions exceeding 50% without waiting for breakthrough technologies. Cement replacement with supplementary cite materials (SCMs) like calcined clay, ground granulated blast furnace slag, or natural pozzolans can reduce clinker content to 50-60% while maintaining performance. Timber-concrete hybrid structures achieve 40-60% embodied carbon reductions versus reinforced concrete equivalents while addressing timber's acoustic and fire performance limitations.

Digital traceability platforms connecting material provenance to carbon data are enabling unprecedented supply chain transparency. Platforms like Circularise and Responsible Steel's Chain of Custody certification create auditable links between specific production facilities and delivered products, eliminating the averaging that masks high-carbon production.

What Isn't Working

Offset-dependent "carbon-neutral" claims face increasing regulatory and market scrutiny. Materials marketed as carbon-neutral through offset purchases without primary emissions reductions are encountering both legal challenges (under EU Green Claims Directive) and buyer rejection. Analysis of 200 "carbon-neutral concrete" products found that 85% achieved neutrality primarily through offsets rather than production decarbonisation, with offset quality averaging only 2.5 on Sylvera's 5-point rating scale (Carbon Tracker Initiative, 2024).

Industry-average EPD reliance systematically underestimates variance and removes incentives for best-in-class producers. When procurement specifications accept generic EPDs, the lowest-cost producer wins regardless of actual carbon intensity. This creates adverse selection where genuinely low-carbon producers—having invested in efficiency and clean energy—lose bids to higher-emitting competitors with identical paperwork.

Insufficient boundary definitions enable greenwashing through scope manipulation. A "low-carbon" claim that excludes raw material extraction, transport, or end-of-life impacts may represent 30-50% of actual lifecycle emissions. The EN 15804 standard for EPDs has improved consistency, but variations in system boundary choices, allocation methods, and data vintage continue to compromise comparability.

Premature technology bets on solutions lacking commercial readiness have stranded capital and undermined credibility. Carbon capture installations on cement kilns have underperformed projections, with operational capture rates averaging 70% of design capacity and costs 40% higher than business cases assumed. Hydrogen-based direct reduced iron (DRI) projects face similar challenges, with green hydrogen costs remaining 2-3x higher than grey hydrogen alternatives.

Key Players

Established Leaders

Heidelberg Materials (formerly HeidelbergCement) operates the world's first commercial-scale carbon capture cement plant at Brevik, Norway, capturing 400,000 tonnes of CO₂ annually. Their evoBuild product line offers concretes with 30-70% lower carbon intensity than conventional products, backed by product-specific EPDs for every facility.

ArcelorMittal leads steel decarbonisation through its XCarb portfolio, combining Smart Carbon (modified blast furnace routes), EAF with recycled and low-carbon iron units, and clean electricity. Their Sestao plant in Spain is Europe's first carbon-neutral steel facility, achieving near-zero emissions through 100% scrap feedstock and renewable electricity.

Stora Enso has transformed from a paper company into Europe's largest cross-laminated timber (CLT) producer, with annual capacity exceeding 200,000 m³. Their Building Solutions division provides structural timber systems that sequester 0.5-1.0 kg CO₂ per kg of product while displacing high-carbon concrete and steel.

Emerging Startups

Sublime Systems has developed electrochemical cement production eliminating the combustion process that generates 60% of conventional cement's emissions. Their pilot facility produces cement at room temperature using electricity, with full-scale commercial production planned for 2028.

H2 Green Steel is constructing Europe's first fully green hydrogen-based steel plant in Boden, Sweden, targeting 2.5 million tonnes annual capacity by 2030. Pre-orders exceeding €2.5 billion demonstrate market readiness for premium-priced near-zero steel.

CarbonCure Technologies provides retrofit solutions injecting captured CO₂ into concrete during mixing, achieving permanent mineralisation while improving compressive strength. Their technology is installed in 700+ concrete plants across 30 countries, having mineralised over 500,000 tonnes of CO₂.

Key Investors & Funders

Breakthrough Energy Ventures has invested over $500 million in low-carbon materials companies including Boston Metal (molten oxide electrolysis for steel), Brimstone Energy (carbon-negative cement), and Twelve (electrochemical CO₂ conversion to materials).

The European Investment Bank deployed €3.2 billion in 2024-2025 for industrial decarbonisation, with low-carbon materials representing the largest sector. Their Risk Sharing Finance Facility reduces capital costs by 100-200 basis points for verified decarbonisation projects.

OGCI Climate Investments (Oil and Gas Climate Initiative) has allocated €1 billion for carbon capture and industrial decarbonisation, including major investments in cement sector CCUS and low-carbon hydrogen production for steel.

Examples

Skanska's Climate Roadmap for Materials: Skanska, one of Europe's largest construction companies, has implemented a mandatory EPD requirement for all structural materials since 2023. Their analysis revealed that switching from industry-average to product-specific data reduced reported Scope 3 emissions by 22%—not through operational changes, but by properly attributing lower emissions to their already-selected suppliers. More significantly, the data-driven procurement approach enabled supplier negotiations that achieved genuine reductions averaging 15% over subsequent years. Skanska now publishes quarterly carbon intensity data for its 20 highest-volume materials, creating accountability that competitors are beginning to match (Skanska, 2025).
SSAB's Fossil-Free Steel Journey: SSAB delivered the world's first commercial shipments of fossil-free steel in 2024, produced using hydrogen from renewable electricity at its Luleå pilot facility. The HYBRIT (Hydrogen Breakthrough Ironmaking Technology) process achieved verified carbon intensity of 0.12 t CO₂/t steel—94% lower than conventional blast furnace production. Initial customers including Volvo, Mercedes-Benz, and Electrolux paid premiums of 20-30%, demonstrating willingness to absorb higher costs for verified decarbonisation. SSAB's full-scale transition, converting all Swedish production to hydrogen-based by 2030, will eliminate 10% of Sweden's total CO₂ emissions.
Holcim's ECOPact Launch and Market Response: Holcim launched ECOPact, its low-carbon concrete range, in 2020 with products offering 30-90% lower carbon intensity than standard equivalents. By 2025, ECOPact represented 35% of Holcim's European sales—far exceeding initial projections of 15%. The product line's success derived from three factors: transparent EPD documentation enabling confident specification; performance data demonstrating equivalent strength and durability; and total cost of ownership analyses showing that carbon tax-adjusted economics favour low-carbon alternatives. Critically, Holcim segmented the market, offering ECOPact Classic (30% reduction) for price-sensitive applications and ECOPact Prime (70% reduction) for premium green building projects, capturing value across customer willingness-to-pay distributions (Holcim, 2025).

Action Checklist

Audit current material procurement for EPD coverage, identifying gaps where industry-average factors substitute for product-specific data, and establish timelines for requiring facility-specific EPDs from all major suppliers
Implement supplier engagement programmes that reward verified carbon reductions through preferential payment terms, volume commitments, or public recognition rather than relying solely on specification compliance
Establish internal carbon shadow pricing (recommend €100-150/t CO₂e) for procurement decisions to anticipate CBAM-adjusted economics and accelerate low-carbon material adoption before regulatory requirements
Develop material-specific decarbonisation roadmaps setting interim targets for 2027 and 2030, with explicit assumptions about technology availability, green premium trajectories, and supply chain maturity
Join or form demand aggregation coalitions (First Movers Coalition, SteelZero, ConcreteZero) to create market signals that de-risk producer investments in breakthrough technologies

FAQ

Q: How should organisations verify that "low-carbon" material claims are genuine rather than greenwashing? A: Verification requires examining multiple dimensions: (1) boundary completeness—does the claim cover cradle-to-gate minimum or cradle-to-grave where appropriate; (2) data specificity—is the EPD product-specific from identified facilities or industry-average; (3) verification body credibility—is the third-party verifier accredited under ISO 14025 and operating under programme operators like EPD International or IBU; (4) offset transparency—if claims include offsets, are these disclosed separately with quality verification from registries like Verra or Gold Standard; (5) benchmark reference—is the claimed reduction measured against current best practice or outdated baselines. Request underlying EPDs rather than marketing summaries, and compare claimed carbon intensities against sector benchmarks. Be particularly sceptical of "carbon-neutral" claims achieved primarily through offsets rather than production decarbonisation.

Q: What green premium should organisations budget for genuinely low-carbon materials in 2026? A: Premiums vary significantly by material and reduction level. For concrete achieving 30% reduction, expect 5-10% premium; for 50-70% reduction, 15-25% premium. Steel premiums range from 10-20% for high-recycled-content EAF to 30-50% for near-zero hydrogen-based DRI. Structural timber typically carries no premium versus steel-concrete equivalents on a structural weight basis, though requires different design approaches. Critically, these premiums are compressing rapidly—ECOPact concrete premiums declined from 20% to 8% over 2023-2025 as production scaled. Factor CBAM-adjusted import costs when comparing: by 2027, conventional imported materials may cost more than premium domestic low-carbon alternatives when carbon border costs are included. Budget green material premiums as 2-5% of total construction cost for 30-40% embodied carbon reduction—typically the most cost-effective decarbonisation available at scale.

Q: How do Scope 3 emissions from materials compare to operational emissions for typical buildings? A: For new construction meeting current energy codes, embodied carbon from materials typically equals 30-50 years of operational emissions. As building energy performance improves and grids decarbonise, this ratio compresses further. For a net-zero energy building, embodied carbon dominates lifecycle emissions—often exceeding 70% of 50-year total. This implies that material selection has become as important as energy efficiency for minimising whole-life carbon. For sustainability leads, the implication is that Scope 3 Category 1 emissions from purchased construction materials require the same strategic attention historically given to operational energy. Organisations that have achieved near-zero operational emissions but rely on conventional high-carbon materials may show minimal net progress on absolute emissions.

Q: What standards should sustainability leads reference when setting material carbon specifications? A: Key standards include: EN 15804+A2 for EPD methodology, ensuring consistent boundaries and data quality; ISO 14067 for carbon footprint quantification; ISO 21930 for construction product sustainability; and the forthcoming EN 15942 for construction product carbon footprint verification. For cement specifically, reference the GCCA's 2050 Net Zero Roadmap targets. For steel, Responsible Steel certification provides chain-of-custody verification. For timber, FSC or PEFC certification addresses sustainable sourcing while timber-specific EPDs address processing emissions. Emerging frameworks like the SBTi's Forest, Land and Agriculture (FLAG) guidance inform biogenic carbon accounting. Set specifications referencing these standards rather than proprietary methodologies, ensuring comparability and reducing verification burden.

Sources

Global Cement and Concrete Association. (2024). GCCA 2050 Cement and Concrete Industry Roadmap for Net Zero Concrete. London: GCCA.
European Commission. (2025). Carbon Border Adjustment Mechanism: Implementation Report Year One. Brussels: European Commission.
McKinsey & Company. (2024). Net-Zero Materials: The Green Premium Opportunity. New York: McKinsey Global Institute.
European Aluminium Association. (2024). Environmental Profile Report 2024. Brussels: European Aluminium.
Carbon Tracker Initiative. (2024). Cement Sector: Carbon-Neutral Claims Under Scrutiny. London: Carbon Tracker.
Heidelberg Materials. (2025). Annual and Sustainability Report 2024. Heidelberg: Heidelberg Materials AG.