How a ‘materials transition’ can support the net-zero agenda

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McKinsey Sustainability

Many countries and businesses have so far centered their plans for achieving net-zero emissions on an energy transition, which calls for boosting energy efficiency and accelerating the transition to renewable energy. And rightly so, given that the use of fossil fuels accounts for a clear majority of global CO2 emissions and presents obvious emissions reduction opportunities. However, the production, use, and eventual disposal of industrial materials such as steel, plastics, aluminum, and cement also account for almost a quarter of all global CO2 emissions. To stand a chance of reaching net zero, countries and businesses should also consider what might be called a materials transition, which would involve both the implementation of lower-impact ways to produce materials and—crucially—the application of circular-economy principles to optimize the use and reuse of these materials.

The implications of such a materials transition could be as deep and disruptive as those of the energy transition. In this article, we draw on research by Material Economics1 to show how a widespread transition to green-materials production and circular-economy practices in the European Union could set the region’s emissions on a path to net zero by 2050. The findings, we believe, also offer lessons to the rest of the world on what it will take to realize global net-zero goals.

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