If climate finance professionals were to rank the hardest decarbonisation puzzles, cement would sit near the top. Cement is both ubiquitous and uniquely emissions-intensive. The sector is responsible for around 7 to 8 percent of global carbon dioxide emissions, largely because turning limestone into clinker, the heart of Portland cement, releases CO2 as a chemical byproduct on top of massive fuel use. Process emissions alone account for roughly 60 percent of cement sector emissions, with high-temperature kilns and electricity use making up the rest.

Unlike the power or light industry, there is no easy way to electrify away this chemistry. Demand is rising, driven by urbanisation and infrastructure needs in emerging markets. For institutional investors, lenders and policymakers, that combination, high emissions intensity and structural demand, makes cement a critical proving ground for net zero strategies.

Against that backdrop, Heidelberg Materials has positioned itself as a front runner in the transition. Its latest Annual and Sustainability Report 2024 and Climate Transition Plan spell out an increasingly granular decarbonisation roadmap, now reinforced by external validation and real assets coming online.

A science-based net-zero trajectory

Heidelberg Materials was among the first in its sector to put its targets through the Science Based Targets initiative. Near-term 2030 goals were validated under the SBTi’s 1.5 degree framework in early 2023, and in January 2025 SBTi confirmed that the company’s 2050 targets are consistent with the Corporate Net Zero Standard. The commitment is stark in its ambition. By 2050, the group aims to cut gross Scope 1 and 2 emissions by 95 percent per tonne of cementitious material and absolute Scope 3 emissions by 90 percent from a 2020 baseline.

Those long term ambitions sit on a detailed 2030 pathway. Heidelberg Materials’ internal CO2 roadmap targets specific net Scope 1 emissions of 400 kilograms of CO2 per tonne of cementitious material by 2030, compared with 576 kilograms in 2020 and 750 kilograms in 1990. The levers are clearly defined, increase alternative fuels and biomass, drive down the clinker factor, scale carbon capture, utilisation and storage, and push green electrification and efficiency. Progress against each is monitored monthly at the plant level and aggregated into a group-wide trajectory.

In 2024, the company reduced specific net Scope 1 emissions to 527 kilograms of CO2 per tonne, a 1.3 percent improvement year on year and roughly a 30 percent cut versus 1990. For context, global cement production still averages around 580 kilograms of CO2 per tonne of cementitious material. Heidelberg Materials is not yet at its 2030 goal, but it is already outperforming the world average.

💡Heidelberg Materials’ 2024 emissions intensity of 527 kilograms of CO2 per tonne is roughly 9 percent below the global cement average and 30 percent lower than its own 1990 baseline.

Chairman of the Managing Board, Dr Dominik von Achten, frames this not as a niche efficiency play but as core strategy. “We strive for both making cement more sustainable and continuing to grow profitably in the long term,” he writes in the 2024 report. “Our position as a company is clear we want this transformation to succeed and are shaping it with full conviction.”

For an energy intensive incumbent, that signals an important shift, climate performance is being treated as an operating and portfolio question, not just a disclosure exercise.

From kilns to code, decarbonisation in practice

Behind the headline targets is a three-pillar decarbonisation model, measures at the clinker level, at the cement level and breakthrough technologies such as carbon capture. The 2024 data show movement on each.

At the kiln, the most immediate lever is fuel substitution. The company has pushed its alternative fuel rate, including biomass, to 31.3 percent in 2024, up from 25.7 percent in 2020. Within that, biomass now accounts for 14.5 percent of the fuel mix, up from 9.9 percent in 2020, cutting fossil fuel use while turning waste streams into energy.

💡 Nearly one third of the thermal energy feeding Heidelberg Materials’ clinker kilns now comes from alternative fuels, with biomass supplying almost half of those substitutes.

On the cement side, Heidelberg Materials continues to reduce the clinker factor, the share of energy-intensive clinker in finished cement. The clinker ratio fell to 69.3 percent in 2024, from 74.3 percent in 2020, driven by increased use of supplementary cementitious materials such as slag, fly ash, limestone and, increasingly, calcined clays. The world’s largest calcined clay plant in Ghana, due to operate at over 400,000 tonnes per year, is a concrete example of that shift.

Digitalisation and AI are emerging as cross cutting tools. The company reports that Giatec’s SmartMix AI, trained on more than 180,000 of its own concrete mix designs, is now optimising material use and reducing CO2 in ready-mixed concrete production. Predictive analytics are being rolled out across approximately 100 cement plants to fine-tune kiln operations and energy consumption. These moves are not glamorous, but they matter. In a sector where margins are tight and physical assets are long-lived, squeezing a few percentage points from energy intensity and overdesign can make climate-aligned products more competitive.

Betting big on carbon capture

Heidelberg Materials is also making one of the boldest bets in its industry on carbon capture, utilisation and storage. The company now frames CCUS as “a key component” of its climate strategy and aims to save 10 million tonnes of CO2 cumulatively by 2030 from projects already launched.

The flagship is Brevik in Norway, which reached mechanical completion at the end of 2024. Once commissioned, Brevik will capture around 400,000 tonnes of CO2 per year, roughly 50 percent of the plant’s emissions, for permanent storage via the Northern Lights project. This is more than a demonstration unit, it underpins evoZero, billed as the world’s first carbon captured net zero cement, which will be supplied both directly from Brevik and via a mass balance model across European plants.

“The launch of our unique evoZero products is a paradigm shift in the decarbonisation of our sector,” says Dr Dominik von Achten. “Carbon capture and storage is a breakthrough technology for the building materials industry and we are frontrunners in deploying it at scale.”

Brevik is not an isolated project. A solvent-based CCUS pilot is operating at Devnya in Bulgaria, while the catch4climate oxyfuel project at Mergelstetten in Germany is designed to create conditions where up to 100 percent of kiln CO2 can be captured cost effectively. A 70,000 tonne per year CCU plant at Lengfurt will supply purified CO2 to chemical and food customers, and a feasibility study at Rezzato in Italy is exploring transport of captured CO2 to the planned Ravenna CCS hub in the Adriatic.

💡With Brevik alone set to capture 400,000 tonnes of CO2 annually, and a dozen CCUS projects in the pipeline, Heidelberg Materials’ capture ambition of 10 million tonnes by 2030 would be equivalent to taking several million cars off the road for a year.

For investors and policymakers, the CCUS portfolio cuts both ways. On one hand, Heidelberg Materials is de-risking an essential technology in a genuinely hard-to-abate sector. On the other, the economics of CCUS remain dependent on carbon pricing, public funding and shared infrastructure. The company’s own reporting is clear that national and international support will be required alongside approximately 1.5 billion euros of taxonomy-aligned capex to 2030.

Circularity as core, not side project

Heidelberg Materials’ transition plan also leans heavily on circularity. The group’s Circularity Policy defines sustainable products as those that either contain at least 30 percent recycled materials or use at least 30 percent less material than a standard product. The strategic target is to generate 50 percent of group revenue from low carbon or circular products and solutions by 2030.

That target is no longer abstract. In 2024, 43 percent of Heidelberg Materials’ revenue already came from sustainable products, up 3.8 percentage points year on year. The company has consolidated its low carbon offerings under the global evoBuild brand and is expanding its EcoCrete portfolio of significantly CO2 reduced concretes, some of which deliver up to 66 percent lower emissions per cubic metre without offsets.

💡 Nearly half of Heidelberg Materials’ 2024 revenue is now attributed to low carbon or circular products, with a public commitment to reach 50 percent by 2030.

M&A strategy is reinforcing that pivot. In Germany, the acquisition of RWG Holding in 2022 brought market leading demolition and recycling capacity in Berlin, enabling higher recycled aggregate content in concrete and displacing primary raw materials.

“We want to offer circular alternatives for half of our concrete products by 2030,” von Achten said at the time. “In this regard, the recovery of building materials and concrete recycling make a decisive contribution and are key to achieving our ambitious sustainability and CO2 reduction targets.”

In the UK, Heidelberg Materials has created a dedicated recycling business line, with new hubs and acquisitions such as Mick George Limited and B&A Group to capture value from construction and demolition waste. Group wide, the 2030 commitments include processing 9 million tonnes of recycled aggregates annually and eliminating non production waste to landfill.

Governance, advocacy and the politics of cement

Technical levers matter only if they are embedded in governance and advocacy. Here, Heidelberg Materials’ disclosures have deepened in recent years. The Chief Sustainability Officer sits on the Managing Board with explicit responsibility for climate targets, and the CEO is described in the company’s CDP questionnaire as directly accountable for ESG and climate issues. Climate risks are integrated into group wide risk mapping with time horizons out to 2050 and scenario analysis linked to IPCC pathways.

On transparency, recognition has followed. In 2024, the company again secured an A score from CDP on climate change and an A minus on water security, placing it among a small cohort of firms globally with top tier ratings. It has also been included in the Dow Jones Sustainability Index Europe, one of the more demanding ESG benchmarks, reflecting broader performance across environmental and social issues.

At the same time, external watchdogs point to a more nuanced picture on climate policy engagement. InfluenceMap’s analysis notes that Heidelberg Materials’ top line messaging generally supports Paris aligned decarbonisation, including backing the EU Emissions Trading System and EU Green Deal policies, but also highlights instances where senior executives have endorsed industry declarations cautioning against “prescriptive” regulation and potential competitiveness impacts.

From a governance perspective, those tensions may be inevitable in a sector grappling with material transition risk and regional policy divergence. What matters for investors is whether Heidelberg Materials maintains consistency between its science-based targets, its advocacy positions and its capital allocation. The introduction of an internal carbon price into investment decisions and the linkage of executive variable compensation to CO2 performance are both steps toward that alignment.

The road ahead, credible progress, unresolved risks

Viewed against the wider industry, Heidelberg Materials’ sustainability story is one of genuine progress. Emissions intensity is trending down faster than the global average, fuel and clinker strategies are being executed at scale, and the company has put real capital behind technologies like CCUS that most net zero scenarios treat as indispensable for cement. Circularity is being built into both product portfolios and business models, shifting recycled materials from compliance obligation to revenue driver.

Yet the challenges ahead are substantial. Even with all conventional levers maximised, Heidelberg Materials assumes that achieving net zero by 2050 will require large scale CCUS, widespread adoption of circular products and enabling policy frameworks, from robust carbon pricing to updated construction standards. Financing and operating a global CCUS portfolio will test balance sheets, regulatory patience and community acceptance. And while 2024’s 527 kilograms per tonne marks a clear improvement, the gap to the 2030 target of 400 kilograms remains wide.

For ESG focused investors and policymakers, Heidelberg Materials offers a useful case study in what “front running” in a hard-to-abate sector really looks like. It is not a story of instant transformation or perfect alignment. It is a story of iterative, capital intensive shifts in technology, products and governance that begin to bend a very heavy emissions curve.

The next few years will be critical. Commissioning Brevik and delivering reliable evoZero volumes into the market, scaling calcined clay and circular aggregates in growth regions, and demonstrating that CCUS projects can be replicated without perpetual subsidy will determine whether Heidelberg Materials can translate its science based plans into system level impact.

If that happens, cement’s carbon problem will not be solved, but one of the sector’s largest players will have shown that a net zero pathway is not just a modelling exercise. It is a strategic, operational and political choice made plant by plant, product by product, and year by year.

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