SINGAPORE (Reuters) – High-emitting industries are struggling to finance more than 450 large-scale low-carbon projects, with demand for green products still too weak to justify investment, according to data from the Industrial Transition Accelerator (ITA), a UN-backed initiative.

Removing the “critical investment barrier” caused by low demand could unlock $700 billion in financing by 2030 and help decarbonise steel, chemicals, aluminium, aviation, shipping and cement, six sectors responsible for around a third of global CO2 emissions, ITA said late on Thursday.

ITA was launched during COP28 climate talks in Dubai last year, and works with industries, investors and governments to promote the green transition of “hard-to-abate” sectors.

The 473 proposed net-zero aligned projects across the six sectors cover around 80% of the emission cuts required by 2030 to meet Paris climate goals, but companies are finding it hard to bring them to fruition.

“The number of announced projects is getting where we need it to be,” said Faustine Delasalle, executive director of the ITA Secretariat. “Our biggest worry is the difficulty of translating announcements into actual construction.”

While firms are announcing projects in good faith and have the technologies required to decarbonise, they are struggling to make the business case, she added. One high-profile example was a decision in July by Shell to “pause” construction of a sustainable aviation fuel plant in Rotterdam.

Government procurement is responsible for around a quarter of global steel demand and 40% of cement use, and will play a crucial role in building a market for green products.

Policy interventions are also needed, including new product standards, carbon pricing mechanisms and even mandates that force consumers to buy green, said Delasalle.

“We really need governments to improve the conditions to ensure the investment case is robust, and the investment case is robust when there is one simple thing – when you have a buyer ready to pay the price that you need.”

(Reporting by David Stanway; Editing by Sonali Paul)