Unlocking Industrial Decarbonization Through Buyer Alliances

Industrial decarbonization faces the fundamental challenge of navigating the “commercial valley of death” for low-carbon technologies. Without clear demand signals investors hesitate to fund new projects, which delays bringing innovative solutions to market. Advanced Market Commitment (AMC) and buyer alliances offer a proven mechanism to address this gap.

AMCs are agreements whereby purchasers commit to buying a future product or service, ensuring demand for emerging technologies, helping de-risk investments, and allowing solution providers to attract investors to finance building or expanding their operations.

Buyer alliances are a form of demand aggregation, where a collection of buyers commit to a future spend associated with solutions focused on a specific supply chain or technology area (e.g., low carbon trucking, sustainable aviation fuel, carbon removals). These coalitions help accelerate commercialization and reduce market uncertainty.

The key purpose of AMCs and buyer alliances is to guarantee a future market, which allows project developers to secure financing. By pooling demand, buyer alliances make it easier to justify investments in next-generation technologies through identifying the future demand side of the market. This model is especially relevant for the industrial decarbonization transition, where buyers and financers may not yet have clear methods for valuing low-carbon commodity inputs.

Several shared mechanisms make AMCs effective in driving industrial decarbonization:

• Demand aggregation – Pooling corporate and governmental demand to provide the necessary scale for investment in new technologies
• Price or quantity guarantees – Setting predictable future purchase prices to enable suppliers to operate with confidence
• De-risking investments – Guaranteeing a future market to attract private capital and scale new technologies
• Blended finance – Combining public and private funding to bridge the gap between early-stage innovation and at-scale commercial viability

Buyer Alliances in Green Fertilizer Markets

AMCs have proven successful in various industries, from healthcare to heavy industry. By adapting this model for green fertilizer and other emerging industrial decarbonization technologies, buyer alliances can play a pivotal role in accelerating the transition to a more sustainable, resilient and economically viable future for food and agriculture.

The green fertilizer industry presents a prime opportunity for an AMC-driven approach, creating market certainty and standardizing various aspects of working with novel solution providers. A green fertilizer buyer coalition could:

• Create market certainty for green fertilizer producers
• Enable long-term investment by reducing financing risk
• Support farmers by providing access to competitively priced, locally produced, sustainable crop inputs
• Advance agricultural decarbonization by aligning key players in the supply chain
• Establish common contracting terms with peers by working with similar emerging technologies under standardized contract terms

Case Studies in Climate Buyer Alliances

Explore several high-profile, proven buyer alliance initiatives using the table below.