The core of the EU strategy on cement is straightforward: make CO₂ a structural cost, then help plants invest, and finally build the infrastructure to manage captured CO₂. If any one of these three pieces is missing, the path to net zero slows down.
For Italy this is not an abstract debate. Cement, lime, glass, ceramics, and other hard-to-abate sectors already operate under the EU ETS and, increasingly, within B2B contracts where verified data, EPDs, and CO₂ clauses matter. In Italy, these industries are economically significant and concentrated in specific industrial districts, which makes policy impacts immediate rather than theoretical.
Why Brussels defends the CO₂ price signal: ETS, CBAM, and carbon leakage risk
The CO₂ price signal is the linchpin because it permanently reshapes the cost curve. The EU ETS, as a cap-and-trade system, reduces the availability of allowances over time and makes CO₂ a system-wide marginal cost. This feeds directly into three industrial decisions: how cement pricing is formed, which investments become priorities, and how quickly it makes sense to shift capex toward efficiency, alternative fuels, clinker reduction, and CCUS.
CBAM was created to prevent that signal from shifting production and imports instead of cutting emissions. In practice, if Europe raises the CO₂ cost for producers inside the ETS, CBAM reduces the incentive to buy the same product from outside the EU without an equivalent CO₂ cost—i.e., it limits carbon leakage.
The CBAM mechanism is already underway and has a clear operational timeline. The transitional phase covers 2023–2025 and imposes reporting obligations on embedded emissions. From 1 January 2026 the definitive regime begins: importers must be authorized and must manage CBAM certificates. This happens in parallel with the phase-out of ETS free allowances for covered sectors, cement included. The practical consequence, in supply contracts, is that embedded-emissions data becomes a contractual variable: measured and verified data is needed to avoid ending up on default values, which are typically punitive.
The economic risk is easiest to grasp using “typical” figures often used in market discussions. In recent years, the EUA price has frequently been cited in an indicative range around €60–100/t, with volatility. Translated into cement: for the same volumes, a “legacy” plant with a higher emissions profile and less remaining free allocation margin sees its CO₂ cost per tonne sold rise much faster than a plant that has already pushed alternative fuels and clinker reduction. In B2B this shows up in pass-through: those with a low-carbon portfolio can defend margins and positioning better, because they can offer a more stable “CO₂-included” price—or at least one that is more defensible with data.
The trajectory is gradual but not gentle. CBAM intensifies over 2026–2034 while free allocations fall to zero on an annual ramp. This reduces medium-term import/domestic arbitrage, but increases the need to measure embedded emissions and to negotiate CO₂ clauses along the value chain: cement, concrete, construction. In other words, CO₂ becomes a contract line item, not just an ESG topic.
The competitive effect is twofold. The CO₂ signal compresses margins for plants without technical options and without access to CCUS infrastructure. But it creates an advantage for those who can sell lower-footprint cements and, above all, for those who can prove those numbers with EPDs and robust MRV, increasingly required in tender specifications. Hence the question many buyers are asking: how do I protect myself from EUA and CBAM volatility, and how do I finance the transition without stopping plants?
The €100 billion EU decarbonisation bank: how it would work and who could benefit in Italy
The “Industrial Decarbonisation Bank” sits within the Clean Industrial Deal with a mobilisation target of around €100 billion. The thing
The economic mechanism that matters, at plant level, is the reduction of WACC and technology risk. In cement this translates into two families of projects. The first is retrofit and upgrading: efficiency, higher AFR, clay calcination, interventions on grinding and blending. The second is CCUS: capture units, compression, connection to a hub or pipeline or shipping, plus a storage contract. In general, eligibility—when discussing EU instruments linked to the ETS and net-zero technologies—tends to revolve around ETS-scope installations, project size and maturity, innovation criteria, and verifiable reductions.
Auctions and competitive bidding are becoming a recurring way to allocate support. The Commission, including through instruments linked to the Innovation Fund, increasingly uses competitive mechanisms to award resources. For anyone building a business case, the practical question becomes: how much support can I obtain per tonne of CO₂ avoided, and how does that change the project’s break-even threshold?
In Italy, potential beneficiaries are not only cement plants. There are at least four operational categories:
- hard-to-abate industrial operators that must reduce Scope 1 and remain competitive under the EU ETS
- CO₂ infrastructure developers, such as hubs, terminals, and pipelines
- utilities and energy service providers for industrial heat and energy integration of retrofits
- investors and financiers, who can participate via guarantees and derisking instruments for project finance and infrastructure
In practice, the required deliverables tend to look similar: ETS baseline, MRV plan, permitting roadmap, contracting strategy and offtake for the low-carbon product, and if there is CCUS also a transport and storage strategy. Here the most common bottleneck appears: even with concessional finance, without available midstream and storage the capture capex struggles to become bankable.
Accelerated CO₂ infrastructure: transport, hubs, and storage as a competitive factor for cement plants
Capture without transport and storage is an asset at risk of sitting idle. This is why the EU is pushing toward a complete CO₂ value chain and toward a “single market” for transport and storage services by 2030, with technical standards, cross-border rules, and discussions on tariffs and third-party access.
The most concrete regulatory signal is in the Net-Zero Industry Act, which entered into force on 29 June 2024. The act sets an EU target of 50 Mt/year of available CO₂ injection capacity by 2030 and also introduces mechanisms that bring the oil and gas sector into contributing to storage development. For cement this matters because it reduces the risk of stranded capture assets: if storage truly scales, capture does not remain an isolated investment.
Scalability, however, does not stop at 50 Mt. EU and JRC analyses indicate that, for 2040 and 2050 pathways, CO₂ management capacity must grow far beyond that level. Translated into B2B: there will be competition to secure transport capacity and, above all, storage. Capacity reservation agreements, long-term storage contracts, and tariff structures that provide predictability become central.
The typical architectures we will see are three. The first is an industrial cluster with a shared pipeline. The second is CO₂ shipping from port terminals. The third is a compression and conditioning hub that aggregates flows from multiple emitters. For a cement plant the selection criteria are very concrete: distance to the hub, volumes and operational continuity, purity and impurity specifications, and synergies with nearby emitters such as lime, waste-to-energy, or chemicals, because they lower the unit cost of transport and storage.
When transport and storage become more accessible, the question shifts to another point: which levers reduce intensity immediately and which are needed to get close to zero. This is where the technology hierarchy comes in.
Key technologies in cement: efficiency, clinker factor, alternative fuels, CCUS, and new binders
The hierarchy of levers starts with what costs least and ends with what changes the plant. In order: energy efficiency and optimisation, fuel switching and alternative fuels, reduction of the clinker factor with SCM and calcined clays, CCUS for process emissions, and finally new binders and product redesign with implications for standards and performance.
Efficiency and operational excellence matter because they immediately reduce consumption and cost, and often also unlock production capacity. In the short term these are the most “capex-light” measures, so they pass investment committees more easily.
Alternative fuels are the next lever and are often measured via the thermal substitution rate (TSR). In Europe, average substitution of fossil fuels with waste-derived fuels is often cited at around 50% or more, but with wide dispersion across plants. The typical blockers are not theoretical: permits, quality and availability of waste streams, logistics, and management of emissions such as NOx and SOx.
The clinker factor is the KPI buyers can use as a proxy for intensity, if they want a simple metric even before going into LCA details. The clinker-to-cement ratio or binder ratio, linked to EPDs and performance specifications, helps distinguish a “blended” cement from a more traditional one. A commonly cited global benchmark is about 0.71 (IEA). Decarbonisation plans aim to reduce it, but the speed depends on SCM availability, technical standards, and market acceptance.
CCUS is the enabler for the hard-to-abate portion because a significant share of emissions comes from limestone calcination, i.e., a chemical process that does not disappear just by electrifying. Several industrial roadmaps assign CCUS a very significant share of reductions toward net zero, on the order of magnitude of about one third. The economic point here is that “CCUS-ready” does not mean only installing a capture unit: it requires energy contracts, heat management, compression, and a cost model for transport and storage. The presence of CO₂ hubs reduces the effective cost and accelerates the final investment decision, because it lowers interface and availability risks.
New binders and novel binders are the last lever because they require regulatory compatibility, standards, performance testing, and often a change of habits across the value chain. But they are also the lever that can truly change the product’s emissions profile, not only the plant’s.
When internal reduction is not enough, or when advanced claims are desired for products and portfolios, credits—and especially removals—come into play. But here the rules are tighter than many think.
Impacts on the carbon credit market: when removals matter, quality, and credible claims for the construction sector
EU ETS and CBAM are compliance; the voluntary market is something else. For a cement producer, voluntary credits do not replace ETS or CBAM obligations. They can only be used for voluntary claims on Scope 1, 2, or 3, or for product lines, with high reputational and legal risk if quality is low or if the claim is framed poorly. Saying “carbon neutral cement” without real reductions and without clear boundaries is the fastest way to end up under scrutiny.
Removals become relevant when hard-to-eliminate residual emissions remain. In a credible net-zero pathway, technical levers are maximised first, then removals are used to neutralise the residual portion. For hard-to-abate sectors, attention is growing on engineered removals and on requirements such as permanence and additionality, because these are the most contested points.
Quality today is being organised around clearer reference points. ICVCM, with the Core Carbon Principles, is pushing toward “high-integrity” credits and has approved carbon dioxide removal methodologies. The keywords that matter in due diligence are always the same: CCP-labelled where applicable, additionality, permanence, leakage, robust MRV, reliable registry, vintage, and double-counting management.
Claims management must be auditable. ISO 14068-1:2023 is a useful reference for structuring carbon neutrality and claims in a disciplined way. In practice this means: an internal claims policy, clear boundaries (product or corporate), credit quality criteria, and an evidence pack with serial numbers, proof of retirement, and MRV documentation.
Tokenisation can help, but it does not create quality out of nothing. Tokenising can improve traceability, fractionalisation, settlement, and proof-of-retirement, if and only if there is correct linkage with registries and custody rules. Quality remains tied to methodology, MRV, registry, and governance. From the buyer side, minimum checks are: KYC on the project, chain-of-custody verification, alignment with CCP or a label when available, and prevention of double counting.
To avoid ETS and CBAM, technology capex, and removals procurement remaining three disconnected initiatives, an operational checklist is needed with signals to monitor in the near term.
Operational checklist for companies and investors: signals to monitor over the next 12–24 months (policy, capex, CO₂ contracts, MRV)
The priority is to put data and contracts in order before obligations change. From 1 January 2026 CBAM enters the definitive regime, and the 2026–2034 ramp moves together with the reduction of ETS free allocation. Practical tasks: governance of embedded-emissions data, readiness as an authorized declarant for importers, and CBAM integration into procurement with clauses requiring verified data to avoid default values.
The second priority is to track finance and calls with an industrial project calendar, not a sustainability office calendar. The rollout of the Industrial Decarbonisation Bank and the pipeline of instruments linked to the Innovation Fund matter for three KPIs: WACC, derisking for FOAK, and timing between application and FID. The discipline here is: understand co-financing, conditionalities, and MRV requirements before choosing technology and partners.
The third priority is storage, not only capture. The EU target of 50 Mt/year by 2030 is a beacon, but the real bankability signals are: capacity reservation agreements, permitting under the CCS and NZIA framework, transport and storage tariffs, and cross-border agreements. Investor view: bankable midstream requires take-or-pay contracts and clear risk allocation on availability, impurity specifications, and liability.
The fourth priority is a capex roadmap with sequencing and decision points. Over the next 12–24 months typical decision points are: selection of capture technology, EPC partner, energy access, and integration with the hub. On the product side, B2B commercial KPIs become EPDs, GWP A1–A3, compliance with technical standards, and availability of SCM or calcined clays.
The fifth priority is to put CO₂ into commercial contracts. Pass-through and indexation clauses are needed for EUA and CBAM, low-carbon cement offtake with premiums tied to measured performance, and for CCUS, transport and storage contracts plus CO₂ handling agreements with quality and impurity requirements.
The sixth priority is MRV and claims, before credits. A credits and removals policy must clearly state “only after reductions,” define quality criteria consistent with ICVCM where applicable, and ensure an audit trail with retirement. ISO 14068-1 helps make claims defensible. If tokenisation is used, the key controls are registry linkage and double-counting prevention, with an evidence pack ready for investor and corporate-customer due diligence.
