In the first in a series of articles, Jen Carson discusses the power of public sector leadership to help drive the heavy industry transition and how governments must recognise and embrace this leadership role to enable the transition at scale.
At Climate Week NYC this year, we hosted three events at The Hub Live, bringing together corporate, policy, finance sector leaders, alongside changemakers from the wider heavy industry ecosystem. We took stock of the progress to date and discussed additional actions we need to take to drive the transition. And what was the theme that kept coming up in conversations? The power of public sector leadership.
Buying power: Shaping a new business-as-usual
The public sector has a critical role to play in driving demand for lower emission steel and concrete - it accounts for around 40% of global steel and concrete use. That’s enormous purchasing power which must be used to grow the market for lower emission industrial materials.
In our ‘Lower Emission Steel Supply Chains’ session, Maria Persson-Gulda of Swedish green steel start-up Stegra (formerly H2 Green Steel) for instance, highlighted the critical role of public procurement in showing steelmakers there’s clear certainty in demand across both the public and private sector.
Meanwhile, in our ‘Greener Buildings’ session Administrator Robin Carnahan of the General Services Administration in the United States shared rich examples of how the organisation is leveraging its influence and scale as the largest buyer of goods and services to demand change.
Enabling policy: Creating the right conditions
But it’s not just about ensuring lower emission steel and concrete are embedded into public sector operations, and governments leveraging their purchasing power. It’s also the enabling role governments must play for others, for example through its policies.
Ms. Persson-Gulda highlighted the importance of policies and regulations like carbon pricing and the EU's Carbon Border Adjustment Mechanism (CBAM) and their impact on increasing the costs for brown steel producers. These policies can play a key role in levelling the playing field for cleaner materials by addressing the current green premium on steel and concrete. Further conversations underlined the need for investment in green steelmaking, but also the need to ensure operational costs are competitive during the scaling phase by penalising dirty steelmaking.
In short, as Annika Olme, CTO of our SteelZero member SKF put it: “Put a price on carbon”. A short but effective ask.
Beyond procurement: Leading by example
Beyond green procurement and policies, a powerful theme which deeply resonated with me was public sector leadership. That may not be as tangible as buying low emission steel and concrete or implementing a policy, but it’s no less important.
Administrator Carnahan put this perfectly when she said that government "can lead by example”, as a “first mover” - piloting innovations, setting standards, validating new technologies, and creating partnerships so others can follow.
I was struck by the leadership, the evidence of best practices, and the inspiring case studies presented. It's Time for public sector organisations everywhere to recognise their influence and show others how it's done, and foster partnerships that help drive the progress we need.
Accelerating decarbonisation: The dual role of government
This comes back to what my colleague Luke Herbert described as both the hard power, such as budgets, policy, procurement, and the soft power, such as the influence to drive wider action, that governments have to drive the heavy industry transition.
Climate Week NYC is at its best when insights from governments come together with all parts of the value chain. These voices clarified exactly what they want to see from governments to ensure the industrial transition happens at scale.
By bringing these leaders together, we drive mutual understanding, spark meaningful conversations, and forge impactful partnerships. It's now up to the public sector to use its power to boost industry-wide progress at scale.