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Cambridge Institute for Sustainability Leadership (CISL)

24 May 2023 - A policy briefing by the Cambridge Institute for Sustainability Leadership (CISL) examines how UK markets can better drive decarbonisation in foundation industries such as steel, cement and glass.

Market driven decarbonisation - policy briefing

Market driven decarbonisation - technical report

Read the policy briefing

Read the technical report


The main objective of the project was to explore how creating market demand for low-carbon innovative products and materials would reduce emissions in carbon-intensive sectors. 

Foundation industries, which are vital for the UK’s manufacturing and construction sectors, are worth around £52 billion to the economy and account for nearly 15 per cent of annual CO2 emissions, according to Innovate UK.

However, decarbonisation of foundation industries is no easy task. The briefing identifies key decarbonisation pathways and some of the greatest obstacles to them, such as the high cost of low-carbon technologies, a lack of standardised data collection on embodied carbon emissions, and a lack of familiarity with new materials.

The most complicated of the cross-cutting challenges, the supply–demand catch-22, refers to a situation whereby an upstream company does not have a large enough market demand to upscale the production of low carbon materials or the technologies to produce them, and downstream companies cannot risk investing in alternative technologies before they have a stable supply of upstream low carbon materials or products.  

CISL’s policy briefing draws on existing literature and discussions with CISL’s industry partners. It lays out its proposed decarbonisation pathways - electrification, circular economy solutions, novel technologies and innovative products, processes and practices, and recommends three policy actions the UK government should undertake to meet its climate targets:  

  1. Designing and implementing policies to create demand for low-carbon products and materials. 
  2. Designing and implementing policies that support contextual conditions to encourage innovation or support the scaling up of demand for innovative technologies and approaches by businesses across the foundation industry value chains.  
  3. Establishing international collaboration to accelerate demand for low-carbon materials and products globally. 

‘Demand-led innovation’ (DLI) is vital if the UK is to see significant emissions reductions in core materials industries, states the briefing.  DLI is innovation that is incentivised by a gap in the market for a product or service that consumers want - and for which they would be willing to pay.  

In this case, many of the technologies, and innovative products, processes and practices needed to decarbonise foundation industries are not yet available at commercial scale, are at very early stages of the piloting process, or have yet to be invented. 

Along with government action, the research highlights the role that non-governmental organisations, academic institutions, and the private sector can play in industrial decarbonisation by bringing companies together to accelerate demand, facilitating dialogue and information sharing. 


Sector deep dives


Citing this report

Cambridge Institute for Sustainability Leadership (CISL) (2023) Market driven decarbonisation: The role of demand-led innovation in supporting emission reductions in foundation industries. Cambridge: Cambridge Institute for Sustainability Leadership (CISL).

Published: May 2023

Authors and acknowledgements

The lead authors of this report were Sanna Markkanen, Anum Yousaf Sheikh, Mohammed Ali, Alexandra Devlin and Beverley Cornaby.

The authors are grateful for the support of Beth Barker, Eliot Whittington, Isabelle Cross, Jenifer Elmslie and academic reviewers for their contributions. They would also like to thank SMART Group members Aldersgate Group, Climate Group, Ecocem, Encirc, Green Alliance, High Value Manufacturing Catapult, JLL, Kraft-Heinz, Liberty Steel, Lucideon, NSG Group, Responsible Steel, Rolls-Royce, Schaeffler, Scottish Power, Skanska, and Tata Steel for their inputs and feedback.

This policy briefing was published as part of a larger research project supporting the foundation industries on their journey to net zero and supported by Innovate UK, UKRI [Transforming the Foundation Industries Research and Innovation (TransFIRe) Hub, Grant number: EP/V054627/1].


The opinions expressed here are those of the authors and do not represent an official position of CISL or any of its individual business partners or clients.


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