First Movers Coalition: Status Report

W H I T EP A P E RJ U L Y2 0 2 4 Contents ForewordExecutive summaryOverview1 Aviation1.1 Sector overview and status1.2 Progress and impact of FMC1.3 Insights from in-country workshops2 Shipping2.1 Sector overview and status2.2 Progress and impact of FMC2.3 Insights from in-country workshops3 Trucking3.1 Sector overview and status3.2 Progress and impact of FMC3.3 Insights from in-country workshops4 Aluminium4.1 Sector overview and status4.2 Progress and impact of FMC4.3 Insights from in-country workshops5 Cement and Concrete5.1 Sector overview and status5.2 Progress and impact of FMC5.3 Insights from in-country workshops6 Steel6.1 Sector overview and status6.2 Progress and impact of FMC6.3 Insights from in-country workshops7 Carbon dioxide removal (CDR)7.1 Sector overview and status7.2 Progress and impact of FMC7.3 Building a broader ecosystem to support CDR45917181822242525293132323537383942434444484950505456575861 8 FMC Finance62 8.1 Overview63 8.2 Focus and priorities of FMC Finance63 8.4 Finance insights from in-country workshops66 9.1 Overview71 9.2 Goals and objectives72 9.4 Added value of FMC Government engagement pillar73 9.6 Policy insights from in-country workshops76 10 Way ahead80 10.1 From commitment to offtake81 10.2 First Suppliers Hub81 Contributors84 Acknowledgements85 Endnotes87 Disclaimer This document is published by theWorld Economic Forum as a contributionto a project, insight area or interaction.The findings, interpretations andconclusions expressed herein are a resultof a collaborative process facilitated andendorsed by the World Economic Forumbut whose results do not necessarilyrepresent the views of the World EconomicForum, nor the entirety of its Members,Partners or other stakeholders. © 2024 World Economic Forum. All rightsreserved. No part of this publication maybe reproduced or transmitted in any formor by any means, including photocopyingand recording, or by any informationstorage and retrieval system. Foreword Annie HillsSenior Advisor,United States SpecialPresidential Envoy forClimate, US Departmentof State Rob van Riet Programme Head,Climate Action andFirst Movers Coalition,World Economic Forum Prior to the landmark Paris Agreement emerging outof COP21 in 2015, high-emitting sectors across heavyindustry (steel, cement, chemicals and aluminium)and heavy-duty transportation (aviation, shippingand trucking) were generally regarded as difficult,if not impossible to decarbonize. Due to complexand integrated industrial processes, combined withsolutions that carry a significantly higher cost thancurrent carbon-intensive technologies, these sectorswere given the label “hard-to-abate” and put on thebackburner in global climate mitigation efforts. implementation – such as through value chaincollaboration, investments, joint ventures andofftakes. We hope this report provides a usefulreference document for FMC members, prospectivemembers, government partners and otherstakeholders in the decarbonization ecosystem withwhom FMC has collaborated over the years – andhopes to collaborate with going forward. This last point is important. FMC’s progress sincelate 2021 is certainly impressive, but now is notthe time to take our foot off the accelerator. Weare approaching the halfway point in this “decadeof action” and the window of opportunity todemonstrate and commercialize these innovativetechnologies is rapidly closing, given the urgencyto scale-up them up sufficiently to enable net-zeroemissions by 2050. The clear objective of the Paris Agreement to limitwarming to well below 2°C, ideally to 1.5°C, abovepre-industrial levels made it clear that we need toreach net-zero CO2emissions around mid-century orshortly thereafter. This brought back into sharp focusthe necessity of tackling these sectors, which areeconomically essential, but account for around a thirdof global emissions and represent a major proportionof companies’ scope 3 upstream emissions. We are also aiming at a moving target, as globaldemand across these economically essentialsectors is projected to climb steeply in the comingdecades: an 80% increase for aluminium, 40% forcement and concrete, and 30% for steel, whiledemand for sea freight is predicted to triple andthat for trucking to double by mid-century. AcrossFMC sectors, we are seeing challenges arounduncertainty of supply in the coming years, delayedtimelines and obstacles for projects in reaching finalinvestment decisions (FIDs), along with concernsaround prohibitively high green premiums. One of the challenges in decarbonizing thesesectors is that around 50% of the reductionsneeded to achieve net-zero emissions by 2050 needto come from technologies not yet commerciallyavailable at scale. In response to this challenge, theUS Government, under the auspices of the Officeof the Special Presidential Envoy for Climate, andthe World Economic Forum joined forces to launchthe First Movers Coalition (FMC). Announced byUS President Biden at COP26 in 2021,