UK: Advance Market Commitment for low-carbon concrete

Client

Innovate UK

Challenge

Innovate UK sought to test how Demand-Led Innovation (DLI), and specifically Advance Market Commitments (AMCs), can be used as an intervention mechanism to unlock investment into, and scaling of, new clean technology solutions in the cement and concrete sector.

An AMC is a firm commitment to purchase an innovative future product that is not yet at market, at pre-agreed prices and volumes, with the future product needing to meet a product specification.  An AMC supports investments in R&D and/or production capacity for this product by making the market for those products more certain.

AMCs have been proven to work in accelerating the scale-up of vaccines and although there is a range of literature on the topic of AMCs within cleantech sectors, the only example to date is the Frontier AMC to purchase carbon removals.

Solution

As we progressed through the early stages of the project, it became clear that to unlock investment to really scale concrete innovations, a larger number of customers would be needed to commit to substantial volumes.  In addition, we needed to work closely with contractors and designers as part of the AMC, due to the wide range of contractual, procurement and specification roles and responsibilities across the construction sector, both for infrastructure and for buildings.

Whilst it remained important to ensure earlier-stage investment into innovations to support progress to pilots and trials, for those nearer to market, the scale of the commitment would need to be large enough to unlock First of a Kind (FOAK) finance.  This is likely to be £10s of millions for a plant, and the volume commitment to provide confidence in investment would need to be around 0.5 million m3 per innovation per year which therefore had to come from many end-customers to collectively reach the volume commitments required.

Therefore, we engaged with 20+ organisations across the concrete supply chain both in workshops and 1:1 engagement to implement the AMC. We mapped the concrete supply chain from quarry to end use, researched innovators and mapped these possible decarbonisation solutions to the various stages of the supply chain and developed an AMC model and documents supporting that. We also engaged with the existing industry groups and initiatives in the UK working to reduce the carbon content of concrete

Outcome

We developed an agreed architecture which reflected the different roles/commitments that asset owners, Tier 1 contractors, specifiers and concrete innovators would need to play to successfully implement an AMC. We developed Target Product Profiles for different types of Low Carbon Concrete and supporting Advance Market Commitment templates for participants to sign up to, supported by Rules for the operation of the AMC and a supporting Independent Expert Group.

At the end of March 2025, the 20+ organisations are considering how and when to make their Advance Market Commitments.