ITA’s bold push for decarbonization

GSW: Could you introduce yourself and explain what ITA and MPP (Mission Possible Partnership) are all about?

MM: The Industrial Transition Accelerator is an initiative launched during COP28 by key organizations like the COP28 Presidency, Bloomberg Philanthropies, and UN Climate Change. The ITA’s mission is to address a critical challenge in heavy industry and long-distance transport sectors: while we have emerging technological solutions for deep decarbonization, these solutions often face financial hurdles. They are costlier to build and/or operate compared to fossil fuel-based alternatives, which limits their scalability.

The ITA aims to improve the investment environment for these technologies and help projects reach final investment decisions (FIDs) faster. The MPP, an international NGO focused on decarbonizing heavy industry and transport, hosts the ITA’s secretariat and oversees the initiative’s daily operations. As for my role, I have been with MPP for nearly three years, initially leading its work in the steel sector. Now, I head the ITA’s Project Support Program in Brazil, tailoring support to projects based on local conditions and helping accelerate decarbonization efforts in the country.

GSW: You mentioned the importance of local nuances in green transitions. Can you elaborate?

MM: Absolutely. The success of green transitions depends on addressing local contexts. Technologies and policies that work in one country may not work in another. For instance, the technological solutions suited for decarbonizing Europe’s steel industry might differ from those needed in Brazil or the Middle East.

Our approach is to adapt good ideas and apply them sensitively to local conditions. That is why ITA has geographically focused programs, like the one in Brazil, where we are working to leverage the country’s unique resources and opportunities while addressing specific challenges.

GSW: What did the November 24 update of the Global Project Tracker reveal, particularly for the steel industry?

MM: One major finding was a noticeable slowdown in new project announcements and in projects progressing toward FIDs across heavy industry and transport sectors, including steel. To align with a 1.5°C pathway to net zero, we urgently need to ramp up the number of projects reaching FID in the next year or two. These projects have long development cycles, and delays in their progress threaten to derail global decarbonization goals.

GSW: What is causing the slowdown in FIDs? Is it geopolitical, financial, or something else?

MM: The primary issue is the lack of strong markets and demand for green industrial products. For steel, many projects initially anticipated emerging lead markets and long-term offtake agreements with buyers willing to pay a premium for green products. However, that demand has not materialized at the scale or certainty required to justify investments.

Another factor, especially for steel, is the reality check on low-emissions hydrogen costs. Many DRI (direct reduced iron) projects had planned to switch from natural gas to clean hydrogen, but the anticipated cost reductions and supply availability have not materialized, further stalling progress.

GSW: Speaking of Brazil, how would you describe its potential for low-emissions steelmaking?

MM: Brazil has excellent conditions to lead in low-emissions steelmaking, particularly low-emissions ironmaking, which is the main source of emissions in steel production. The country benefits from abundant iron ore reserves and significant renewable energy potential from solar and wind, particularly in the northeast. Its largely hydro-based low-emissions power grid is advantageous for stable industrial power needs and green hydrogen production. Additionally, high natural gas prices in Brazil could accelerate the commercial viability of green hydrogen compared to regions with cheaper natural gas.

Despite these advantages, challenges remain. Brazil’s incumbent steelmakers, with existing blast furnace capacities, may hesitate to invest in green technologies due to the remaining lifespan of their current assets. Greenfield projects—such as new DRI or HBI facilities—are emerging, but not at the pace needed to fully capitalize on Brazil’s potential.

GSW: How do biomass resources factor into Brazil’s decarbonization efforts?

MM: Biomass is an intriguing solution for Brazil, particularly for its existing steelmakers looking to reduce emissions incrementally by substituting coal with biomass. However, there are limits to how far this approach can go, both technically and in terms of resource allocation.

From a systemic perspective, biomass may be better utilized in sectors with fewer decarbonization options, such as sustainable aviation fuel (SAF) production. Given Brazil’s significant biomass resources, careful prioritization is key to ensuring maximum impact across industries while guaranteeing they are still managed in a sustainable way.

GSW: What about government involvement? How supportive is Brazil’s government in facilitating the green transition?

MM: The Brazilian government has been very supportive. A great example is our partnership with Brazil’s Ministry of Development, Industry, Trade and Services (MDIC) for the ITA’s program in the country. This collaboration highlights the government’s commitment to using Brazil’s economic and environmental advantages for green industrial transitions.

The current administration recognizes the potential for Brazil to benefit economically and environmentally from decarbonization efforts. We are working closely with policymakers to recommend supportive policies that align with Brazil’s unique context and opportunities.

GSW: Can you share insights about the Green Demand Policy Playbook [1] and the related open letter [2]? What are their goals?

MM: Creating demand for green industrial products is the most critical challenge we face. While voluntary initiatives are essential, they have been insufficient to catalyze the scale of demand needed to support large-scale projects. Policy actions are crucial here.

The Green Demand Policy Playbook provides a menu of policy options that governments can implement to stimulate demand for green products. It is a practical resource, offering solutions that can be tailored for different countries and sectors.

The related open letter, endorsed by numerous industrial players, serves as a call to action for governments to adopt these policies. It is both a rallying cry and a roadmap to create markets, ensure project financing, and kickstart a wave of decarbonization projects worldwide. The playbook also informs our work in Brazil, where we are adapting these policies to fit the local context for sectors like steel, sustainable aviation fuels, and cement.

GSW: Any final message for our readers?

MM: The demand challenge is at the heart of the green transition. Industry players are eager to build and innovate, but without strong markets and government policies to support demand, projects cannot reach FID. Our call to action is simple: governments must implement policies to unlock demand and enable the first wave of green projects. This is how we get on track to meet net-zero targets and create a sustainable future for heavy industry and long-distance transport.