The role of public procurement in scaling markets for low carbon industrial products

This report by Cambridge Econometrics for the Aldersgate Group examines how public procurement can act as a demand‑side lever to stimulate markets for low‑carbon industrial products in the UK. It evaluates where procurement can be most effective by assessing sectors against criteria such as the extent of government involvement, economic impact, the need for demand‑side support, and the feasibility of decarbonisation. The analysis covers steel, cement, glass, ceramics, plastic, asphalt, paper and aluminium.

The report finds that public procurement has significant potential to accelerate early‑stage markets for low‑carbon products by providing reliable demand signals and supporting investment in cleaner production technologies. By integrating carbon considerations into tenders, government can help level the playing field between high‑carbon and low‑carbon products, promote greater transparency, and improve data availability on product emissions. In sectors where UK industry faces international competitive pressures, procurement can act as a defensive tool to mitigate carbon leakage and prevent the loss of domestic industrial capacity.

The report also reviews international examples from the US, Canada and the EU, highlighting the importance of clear standards, consistent methodologies and robust monitoring frameworks. However, it notes considerable gaps in available data, both internationally and in the UK, which limit the ability to quantify potential economic benefits at this stage.

Key findings of the research

• The most promising products for low-carbon public procurement are steel, cement and paper,
• Public procurement can support initial demand, drive innovation and improve transparency,
• Economic impacts arise from supporting domestic production, jobs and competitiveness,
• International examples show varied approaches but highlight significant data gaps,
• Clear, consistent policy design is essential for success.

The related policy briefing can be found here: Low carbon public procurement for UK competitiveness