The most significant challenges—and biggest opportunities—for reducing carbon emissions in industry are happening just outside the highway, a short distance from downtown Chicago in a nondescript industrial area.
Here along the Chicago River, the Ozinga concrete company manufactures and sells a lower-carbon version of concrete made using recycled steel byproducts.
Ozinga is a small company addressing a large problem. The global cement industry is responsible for 8% of global carbon emissions, according to the International Energy Agency. (Cement is the primary ingredient in concrete). Ozinga’s efforts represent a chance to rapidly reduce these emissions. However, there’s a catch: while the technology is proven, the market is not. “Who is driving the demand?” Marty Ozinga, the company’s CEO, said to me from a conference room as concrete trucks drove past us. “That’s the tricky part right now.”
It’s not that demand is absent. Major tech companies building new data centers are especially eager to pay for low-carbon solutions. Federal and state governments are seeking low-carbon products for their projects. And many end users of buildings—companies leasing office space, for example—would be willing to pay a small premium.
But connecting that demand with supply can be tricky. Even if building occupants are eager to work in a green building, contractors are hesitant about anything that increases costs. And the supply of green cement isn’t necessarily located where developers want to build.
This is the challenge at the heart of efforts to decarbonize not only cement and concrete, but a wide range of industries at this critical moment in history. Industry, which includes manufacturing and steel, among other sectors, accounts for 21% of global emissions. We have the technical knowledge to reduce emissions—and often the additional cost is minimal. But in many cases, the world lacks the business models, financing mechanisms, and policy support needed to make it work.
Ozinga is an unusual case. The company is family-owned and financing a $250 million green cement facility with its own funds. It’s a bet that the rest of the market will follow suit—and when it does, the company will have a first-mover advantage.
But truly achieving industrial decarbonization will require companies, governments, and financial institutions to come together and bridge this gap. In the coming weeks and months, TIME’s Futures series will explore the companies and leaders trying to bridge that gap.
Off and on for the past several decades, investors have poured billions into early-stage companies working on innovative technologies that could accelerate the energy transition. These investments benefited from government spending on research to lay the groundwork.
As a result, a range of technologies have reached a point where they are reliable and, in some cases, similar in cost to their traditional counterparts. But the gaps between technology and full market entry are numerous. Financial institutions want to see long-term contracts for green commodities before they lend money for projects, but potential buyers don’t want to commit early and pay too high a price. Buyers who are willing to pay for the green commodities that come from industrial decarbonization may not be located where these commodities are produced, requiring new infrastructure in some cases and making it completely inaccessible in others. And end users who are willing to pay more for green don’t always have an easy way to connect with—and pay—the companies at the top of the supply chain.
These gaps are not new to climate experts familiar with the landscape of industrial decarbonization. Indeed, policies like the U.S. Inflation Reduction Act now provide incentives designed to stimulate financial innovation and bridge the divide. Funding for the Department of Energy’s Loan Program Office, for example, gives the agency the ability to lend money to help companies commercialize new industrial technologies where traditional banks have limited expertise.
And other institutions are getting involved too. This week, for instance, a coalition led by the Bezos Earth Fund formally launched a green market maker that will help connect supply and demand of green commodities to scale these innovations. Companies are forming buyers’ coalitions where businesses jointly commit to purchasing a green commodity explicitly to help stimulate demand. Meanwhile, Ozinga is finding opportunities in supplying low-carbon cement to major tech companies.
And, as with any invention, the best innovation may be yet to come.
