Concrete Transition Capital -For informational purposes only

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Useful for scholars of transition finance, carbon pricing mechanisms, and industrial decarbonization market design.

🏢実務担当者:Corporate sustainability teams in cement and hard-to-abate sectors can adopt the EAC covenant structuring framework to de-risk investments.

🏛政策担当者:Regulators can leverage the coordination-rent concept to design carbon pricing and procurement policies that incentivize first-mover lenders.

Cement and concrete account for approximately 7-8% of global CO 2 emissions. A diversifying set of demand signals-binding regulation (EU CBAM (Carbon Border Adjustment Mechanism), definitive from January 2026), sub-national mandates (California SB 596), government procurement pledges (IDDI (Industrial Deep Decarbonisation Initiative)), and voluntary corporate commitments (SCoBA (Sustainable Concrete Buyers Alliance), FMC (First Movers Coalition))-is consistent with a material market for low-carbon cement and concrete developing over the 2026-2030 period. Capital formation reached an estimated $372m in 2024 against an annualised sector need of approximately $2.5bn-a 6.7× gap (a cross-metric comparison of single-year raise vs annualised need; see Section 5.2). The senior secured credit component is estimated at roughly $25-30m (author's internal estimate; directional)-estimated at roughly 1% of the annualised sector need, subject to the methodological caveats in Section 5.2. This paper argues the gap reflects a financing architecture failure: a three-party coordination problem between producers, buyers, and capital providers that no party can resolve unilaterally. We separate the demand signal into three distinct financing layers-Scope 1 compliance-cost avoidance, EAC (Environmental Attribute Certificate) revenue from buyer commitments, and aggregate demand signals-each with different contractual maturity and credit quality. We use the renewable energy PPA (Power Purchase Agreement) market as a market-design precedent, identify where the analogy breaks, and introduce C-PACE (Commercial Property Assessed Clean Energy) financing as a closer structural precedent for the compliance-cost-avoided underwriting basis. We present an illustrative facility-level credit model demonstrating DSCR (Debt Service Coverage Ratio) of 2.90× at a $50/tCO 2 EAC price, with commodity revenue alone achieving 2.69×. We further argue that the lender is the actor uniquely positioned to make a trilaterally resolving first move in the coordination deadlock-because the EAC covenant it structures simultaneously provides revenue certainty to the producer and demand certainty to the buyer-Sulzburgh | The Financing Gap at the Heart of Cement Decarbonization Working Paper | April 2026 Concrete Transition Capital-For informational purposes only 2 and that this first-mover role generates a coordination rent that dissipates as Arrow (1962) learning-curve dynamics compress structuring costs toward zero. The senior credit thesis is conditional on the maturation of EAC contracting, verification, and pricing standards.

• semanticscholar https://doi.org/10.2139/ssrn.6576898first seen 2026-05-15 21:12:42