Showing their metal: how early adopters are accelerating heavy industry decarbonization

Traditionally focused on cost, quality and delivery, industrial purchasing strategies are now undergoing a marked evolution, incorporating sustainability as a central consideration.

Decarbonization of the value chain has shifted from a peripheral ambition to a strategic imperative, shaped by net-zero roadmaps, evolving investor expectations, customer demands and new regulations. This shift is especially pronounced in sectors reliant on carbon-intensive materials like aluminium and steel, which play a pivotal role in vehicle manufacturing.

Transitioning to low-emissions metals has emerged as one of the most powerful levers for decarbonization.

To translate these ambitions into practice, industry leaders have begun embedding carbon criteria into each step of the sourcing process. At Volvo Group, just one of the companies pioneering the fossil-free materials procurement approach, we apply the following principles:

Volvo’s decision to join the First Movers Coalition in both the aluminium and steel sectors reflects its commitment to lead the industry’s transformation and accelerate the adoption of sustainable procurement practices. The coalition seeks to generate robust demand for low-carbon and near-zero metals, defined by measurable carbon intensity thresholds for virgin materials and clear criteria for emissions reductions. These targets are typically achieved through renewable electricity and breakthrough technologies such as hydrogen-based iron reduction or carbon-free aluminium smelting.

By participating from the outset, the First Movers seek to drive sector decarbonization and foster the market conditions necessary for the commercialization of emerging low-emissions technologies. Acting collectively, the coalition helps establish common definitions, aggregate credible demand, and reduce investment risk for producers, in contrast to the fragmented signals sent by individual companies acting alone,

Being a First Mover means three things:

While demand for low-carbon aluminium and near-zero steel is growing steadily, scaling the production requires significant capital expenditure, meticulous execution and aggregate demand. The First Movers buyers can help by offering long duration offtakes, synchronized with suppliers’ investment milestones, and by testing and approving new materials early in their intended use.

Though early volumes can carry a green premium, the narrow view of “price today” misses the long-term advantages: reduced exposure to future carbon costs and supply disruptions; improved access to green finance; and alignment with customer demand. When the total cost of ownership includes future CO₂ prices and compliance risks, low-carbon metals often become the prudent bet.

Common rules on how to measure and attribute carbon intensity are essential. Robust Scope 3 accounting, credible system boundaries, and measures to avoid double-counting make markets investable. Third-party verification, environmental product declarations and interoperable data standards should become the default rather than the exception. Transparency demystifies the premium. Clear breakdowns of cost drivers (energy, feedstock, capital amortization) enable rational conversations about value.

Inside organizations, budget cycles and legacy key performance indicators can slow adoption. The remedy is to reframe low-emission materials as a strategic investment with quantifiable returns: regulatory compliance, customer preference, brand equity and resilience. Early commitments, joint roadmaps and shared test programmes align incentives for suppliers. For end customers, labelling and product declarations that make carbon content visible help them choose and reward lower-carbon options.

Decarbonization is a collective effort. Original equipment manufacturers (OEMs), material producers, startups and regulators need aligned timelines and feedback loops. Trust is built through verified data, credible certifications, use of consistent definitions, pricing transparency, and fair risk‑sharing.

Accelerating the transition to low-emission metals requires a significant increase in demand. By stimulating market appetite, suppliers are incentivized to scale up production and invest in cleaner technologies. One noteworthy approach lies in setting clear volume and percentage targets for the use of low-carbon emission materials, as per the recent proposal of the European Commission, in which a percentage of low-carbon steel is required. Such targets provide clarity and direction for both producers and consumers.

Regulatory instruments like the Carbon Border Adjustment Mechanism (CBAM) and the Emissions Trading System (ETS) in Europe can create additional market traction. Clarifying the evolution of these regulations could help stakeholders understand future requirements and opportunities. Clear regulatory signals and targets can demonstrate that companies that act early will be better positioned in the evolving regulatory landscape. This, in turn, encourages suppliers to invest now to remain competitive in the future.

Trust and transparency are key enablers in this transition. Greater transparency in cost and price mechanisms would support faster and more informed decision-making, helping all stakeholders to adapt and thrive in a changing market.

As the experience from the First Movers Coalition shows, achieving truly sustainable supply chains will depend on the ability of stakeholders to collaborate, share best practices and commit to the long term. Ultimately, the success of this transition will not only strengthen business resilience but also contribute to global climate goals and a more just and responsible economy.