As leading companies look to deeply decarbonize their supply chains to meet their climate goals, lower-carbon steel and concrete stand out for many as clear yet complex targets for reducing their emissions. These materials sectors are emissions-intensive and limited lower-carbon supply exists, as the transition to lower-carbon steel and concrete production technologies can require large capital investment. Many companies today may struggle to directly buy lower-carbon concrete and steel at scale because: 1) they do not contract directly with materials producers, and/or 2) they do not have physical access to lower-carbon materials for a particular use case.

Book and claim is a chain of custody model that allows companies to directly invest in impactful interventions within materials sectors, addressing their supply chain emissions without having to directly purchase those physical products. Under a book and claim system, the environmental attributes (i.e., carbon intensity) of a product are decoupled from the physical product unit and sold separately as a certificate. An organization can purchase this certificate and claim the environmental attributes without directly purchasing the unit of physical product that the environmental attributes represent. This model has the opportunity to widen the pool of buyers that can invest directly in the lower-carbon materials markets and can send a powerful demand signal necessary for materials producers to finance and build out additional lower-carbon production infrastructure necessary to meet 1.5°C-aligned sectoral climate targets.

In addition to the considerations that other successful book and claim models (like electricity and aviation) have incorporated into their system design and infrastructure, the steel and concrete sectors must also take into account factors like extremely long and complex supply chains, building book and claim infrastructure atop an existing EPD/PCR system, and accommodating the many variations of end products that exist within each sector.

This report investigates the potential for book and claim mechanisms to drive growth of near-zero product markets within the lower-carbon steel and concrete sectors. It explores the applicability of book and claim for steel and cement, the infrastructure needed to create a robust book and claim system, lessons learned from an initial market pilot led by Microsoft, and more.