The new study finds that ambitious green procurement standards set by Chinese DFIs or their regulators could have cut up to 3.6 million tonnes of steel emissions, and up to 1.8 million tonnes of cement emissions. With some Chinese development finance-backed projects still under construction or in planning, and for future projects, that window for change is still open and the opportunity is immediate.
In addition, as these numbers only focus on certain energy and transport projects receiving Chinese development finance, they capture only a subset of China’s overseas infrastructure engagement, which goes beyond development finance to investment, other forms of lending, construction arrangements and more.
The total transformational potential of green procurement in China’s overseas infrastructure projects could lead to emissions reductions orders of magnitude higher than our initial numbers.
Transformative potential
While low-carbon procurement has long been treated as a technical footnote, it is in fact a frontline climate policy tool. Decisions on carbon content from Chinese DFIs, state-owned enterprises and project developers can transform the emissions footprint of overseas infrastructure, including decisions on what carbon data must be disclosed, and which materials qualify in tenders.
This is critical now more than ever in today’s global context. Heavy industry is now central to climate policy. Some governments, such as the European Union, Canada, and US states like California, are already using green procurement to build markets for lower-emissions steel, cement and concrete.
Meanwhile, some DFIs, such as the World Bank, Inter-American Development Bank, African Development Bank and Asian Development Bank have developed broader sustainable procurement standards. The carbon intensity of construction materials is quickly becoming an issue of competition under policies like the European Union’s Carbon Border Adjustment Mechanism (CBAM), which will tax high-carbon imports to the bloc.
Green procurement is not only a practical way forward but provides an opportunity for host countries. Chinese-designed frameworks that reward lower-carbon production could help local firms upgrade, reduce air pollution, build technical capacity, and stay competitive in markets where low-carbon standards are becoming more important globally.
China’s DFIs and state-owned enterprises do not need to wait for a perfect market in near-zero steel and cement. There are concrete steps they, and China’s government ministries, can take now:
● Improving carbon transparency by requiring steel and cement producers involved in Chinese-financed overseas projects to disclose verified, product-level carbon emissions, creating a consistent baseline for comparing materials and tracking impact.
● Establishing clear, tiered carbon-intensity benchmarks for steel and cement, aligned with global standards.
● Pairing standards with financial incentives for developers to make greener purchases, procurement performance metrics, and internal scoring systems, while investing in technical capacity to ensure implementation and improvement.
However, there are real barriers to achieving this. Low-carbon materials can cost more. Emissions data is often poor or missing. Some host countries lack certification systems, monitoring capacity, or domestic supplies of cleaner steel and cement. Chinese institutions themselves, meanwhile, have yet to develop a mature overseas framework for this kind of procurement.
But these policies could be phased in across China’s overseas infrastructure engagement, starting with transparency and data. Then, basic standards that tighten over time could be set, while offering technical assistance and support to suppliers that can meet them.
Green procurement can reduce the carbon footprint of projects long before the operations begin, and shape emissions for decades to come. Such purchasing can be a “new avenue” in green overseas engagement that the 15th Five-Year Plan calls for – cutting embodied emissions and potentially supporting the industrial capacity of partner countries at the same time.
This article was originally published on Dialogue Earth under a Creative Commons licence.
