Carbon Direct and Microsoft Release Criteria for High-Quality Environmental Attribute Certificates to Accelerate Decarbonization of the Built Environment

Science-based criteria for high-quality environmental attribute certificates (EAC) procurement in low-carbon concrete and steel address supply chain emissions and catalyze market transformation.

Key Takeaways

• Concrete and steel account for approximately 13% of global carbon dioxide (CO2) emissions, making their decarbonization a critical climate priority.
• Companies expanding their physical footprints must address rising supply chain emissions resulting from the embodied carbon of commodity materials like concrete and steel.
• The market for low-carbon concrete and steel is immature, with challenges to direct procurement.
• Environmental attribute certificates (EACs) offer an innovative, market-based solution by allowing companies to procure the environmental benefits of low-carbon materials independently of their physical supply chains, ideally through multi-year contracts.
• Defining criteria for high-quality EACs will help shape the future of the nascent EAC market and support credible, additional climate mitigation.

NEW YORK-- Carbon Direct, in collaboration with Microsoft, today released a first-of-its-kind guide to high-quality environmental attribute certificates (EACs) in the concrete and steel sectors. These new quality criteria are designed to help Microsoft address greenhouse gas emissions from scope 3 activity with EACs that are verifiable, additional, and catalytic. The criteria are also relevant to other organizations who seek to mitigate supply chain emissions from the embodied carbon of commodity materials used in both equipment and building construction.

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The criteria build on insight from collaborations with industry experts, suppliers, and sustainability organizations and are grounded in Microsoft's commitment to become carbon negative by 2030. The guide explains the rationale behind EAC pathway decisions, encourages partnerships and collaborations in the supply chain, and guides procurement decisions. The criteria are designed to set a high bar for the integrity of EACs in today’s rapidly evolving market.

Since 2021, Carbon Direct and Microsoft have collaborated to advance science-based guidance for carbon dioxide removal. These new criteria reflect their joint success in stimulating the market for that decarbonization pathway, while aligning with the expertise and activities of companies and organizations who are working to build concrete and steel EAC markets.

Addressing the Embodied Carbon Challenge in Data Centers

Concrete and steel account for approximately 13% of global CO2 emissions, making their decarbonization a critical climate priority. Microsoft is addressing these impacts by reducing demand for these materials through innovative design and procuring low-carbon alternatives, while also working to decarbonize its supply chains, efforts that can drive broader industry change.

The market for low-carbon concrete and steel is immature, with challenges to direct procurement including limited financing for first-of-a-kind technologies with uncontracted output, limited supply, geographic mismatch, supply chain constraints, and limited willingness-to-pay a green premium.

To drive both company-level and broader sectoral decarbonization, Microsoft is engaging directly with suppliers to procure low-carbon alternatives to conventional concrete and steel, as well as investing in and helping pilot new low-carbon production pathways.

Julia Fidler, Fuel and Materials Decarbonization Lead, Microsoft said, "EACs have the potential to address a number of the most critical challenges to scaling deep decarbonization solutions, not least by providing financial certainty. By setting a high bar for EACs, we’re ensuring that our investments drive real, additional, and scalable emissions reductions as we invite the industry to join us in shaping a credible, high-impact market for low-carbon building materials."

Dr. Meera Atreya, Director of Decarbonization Science & European Advisory, Carbon Direct said, "To decarbonize the world’s largest supply chains, we need solutions that are both ambitious and credible. These first-of-their-kind criteria set a quality bar for environmental attribute certificates so that every EAC transaction can drive real, additional, and verifiable emissions reductions in concrete and steel. By prioritizing high integrity, social and environmental safeguards, and a pathway to scale, we’re not just supporting Microsoft and other companies to meet their climate goals, we’re helping to catalyze a market transformation that benefits the entire sector and the planet."

Defining High-Quality EACs to Shape a Nascent Market

To maximize the potential climate impact of its EAC procurement, Microsoft worked with Carbon Direct to establish the following rigorous, science-based criteria:

• Require that EACs only be used when material with significant sustainability benefits cannot be directly procured in sufficient quantity within a project’s physical supply chain.
• Achieve a Low Carbon Concrete (or Cement) Rating of at least “D” by the Global Cement and Concrete Association or a Progress Level 2 rating or higher by ResponsibleSteel.
• Demand robust additionality, particularly that projects must go beyond efficiency savings and subsidized upgrades, regulatory requirements, and common practice.
• Set high standards for social and environmental integrity, including community engagement and living wage requirements.
• Mandate independent verification, traceability, and safeguards against double counting of environmental benefits.
• Require assessment and mitigation of leakage risks to help prevent claimed reductions from shifting emissions elsewhere.

The criteria provide detailed recommendations for EAC implementation in both concrete and steel. All EAC guardrails support the delivery of real, additional, and verifiable climate impact, setting a new standard for the emerging market. These criteria will be reviewed and updated regularly to reflect advances in technology, data, and market conditions.

To read the Criteria for High-Quality Environmental Attribute Certificates in the Concrete and Steel Sectors, visit: https://www.carbon-direct.com/research-and-reports/criteria-for-high-quality-environmental-attribute-certificates

To dive deeper, read Carbon Direct’s blog: Decarbonizing concrete & steel with environmental attribute certificates.

About Carbon Direct

Carbon Direct is the leader in science-based carbon management. We help emerging and established climate leaders like Microsoft, JPMorgan Chase, American Express, Mitsui O.S.K. Lines, JetBlue, and The Russell Family Foundation drive scalable and just impact through deep decarbonization strategies and carbon dioxide removal. With Carbon Direct’s scientific approach, organizations can confidently set targets and measure their emissions, implement reductions across their operations and supply chain, and build high-quality carbon dioxide removal into their climate plans to accelerate impact. To learn more visit: www.carbon-direct.com.