Introduction
In this blog post, we lay out in detail the approach S3 Markets is taking for issuing environmental attribute certificates (EACs) for supplementary cementitious materials (SCMs).
This follows from our announcement with Urban Mining Industries for issuance of EACs for their novel pozzolanic SCMs. This note is provided for market transparency and to clearly outline the steps S3 Markets is taking to ensure high-integrity EAC issuance.
The case for SCM EACs
To begin, it is first important to establish the climate case for issuing EACs at the SCM level (i.e. where the functional unit is 1 tonne of SCM), and why we have gone down this route.
For S3 Markets, it comes back to our mission: accelerate industrial decarbonization and the transition to a net-zero energy system by providing market infrastructure for EACs. For the cement and concrete sector, SCMs are a critical decarbonization technology. They are used to partially replace clinker, the most carbon intensive component of cement and concrete. SCMs’ important role is driven by their low GHG intensities, cost-efficiency, energy-efficiency, and availability.
Notably, the IEA identifies SCMs as playing a central role in its decarbonization trajectory of the sector both in the short and long-term [1]. Other analyses also highlight the critical role of SCMs [2].
The challenge is that most SCMs used today are either fly ash from coal power plants, or ground granulated slag from blast furnaces (GGBFS) that produce iron. The supply of both these SCMs is expected to decrease over time as part of the energy transition. There is therefore an urgent need to scale the production of novel SCMs to achieve net-zero. EACs can play a vital role in helping to achieve this by helping producers gain access to catalytic capital.
When considering EAC issuance at the SCM level, it is important to acknowledge that another option discussed is to issue EACs at the cement or concrete level (with the cement or concrete having incorporated SCMs). However, we believe there are multiple issues with constraining EAC issuance to this approach. For one, most approaches in current EAC standards apply a decarbonization threshold to EAC issuance eligibility that would unfairly rule out issuance for most novel SCMs (given typical SCM replacement rates for clinker / cement) [3]. Second, it would be overly burdensome to enforce and measure, as SCM producers rarely have control or visibility on how each particular batch of SCMs is added into a concrete mix. Such issues would strongly reduce the positive impact EACs could have for SCMs.
Overall, there is a strong climate case for SCM EAC issuance; SCMs are a critical part of what it takes to decarbonize the cement and concrete sector, there is an urgent need to scale novel SCMs, and EAC issuance at the SCM level is a powerful way to accelerate this.
A high-integrity process
The next step is to ask how EAC issuance for SCMs can be accomplished in a high-integrity manner. Here it is important to recognize two aspects of SCMs: their impact on a concrete mix’s strength, and their potential replacement / substitution rates for clinker / cement.
Substitution rates and like-for-like performance
Regarding strength, due to the differing chemical properties of SCMs versus clinker / cement, when SCMs are substituted on a 1:1 basis (by mass), the resultant concrete mix may have a different compressive strength when it hardens, depending on the SCM type. In this sense, the individual contribution of SCMs to the strength of concrete can be different to clinker / cement.
This factor is important, as when accounting for EACs in corporate reporting, a typical advised approach is to “substitute” the GHG intensity of an EAC for the activity it is effectively replacing in the market (e.g. Ordinary Portland Cement; OPC). A key principle to ensure high-integrity use is that the activity represented by the EAC should be functionally equivalent to the activity it is replacing. Recognizing the different strength contributions is therefore key, and there is indeed a way to account for this.
The differences in strength can be quantified using established measurement techniques for compressive strength which are already widely in use [4]. One can measure the compressive strength of a concrete mix with the SCM at a given substitution rate, SR, in comparison to that of a control concrete mix with no SCM use. The substitution rate refers to the proportion of clinker / cement that is being replaced (on a 1:1 basis by mass). The strength activity index (SAI) is the ratio between the compressive strengths of the SCM mix and the control.
This leads to a key parameter: the weight adjustment factor, WAF, which is calculated via [5]:
The WAF represents the increase in SCM content (in mass) in a concrete mix required to decrease the baseline cement content (in mass), while keeping a constant compressive strength. For conservativeness, the WAF is taken to have a minimum value of 1, so no credit is given to SCMs that outperform the control.
To ensure transparency and integrity, in the issuance process of EACs for SCMs, each EAC has an allocation methodology attached, which documents the plant level controls and process of EAC generation and provides guidance for how buyers can account for EACs in their GHG reporting. Our guidance is that for buyers to effectively replace the function of 1 unit of the baseline clinker / cement (e.g. OPC), the amount of required EACs is:
In other words, if the SCM has a lower strength than the OPC it is replacing, a larger number of EACs need to be purchased to replace the effective function of the OPC. This effectively reduces the “decarbonization potential” of each individual EAC. This can be considered a conservative—but necessary—constraint to ensure integrity, comparability, and fairness in EAC issuance for SCMs. Note that the evidence and measurements underpinning the calculation of the WAF are attached to the EAC for transparency.
An important factor to recognize is that the WAF is measured based on compressive strength tests at a specific point in time, and for a specific SCM substitution rate. Variation of either of these factors can result in different values in the WAF, which significantly alters the effective decarbonization potential and hence value of the EAC. Here, we use the 28-day compressive strength, which is a typical measure used across the industry. For the latter, the substitution rate selected is a rate which is typically used or expected when deploying the physical product [6]. Importantly, if significant differences in the WAF are expected for different substitution rates or at different points in time, a sensitivity analysis is performed to provide transparency on how these values may vary.
Substitution rates and stacking solutions
The other key factor to recognize is the achievable replacement / substitution rates for a given SCM. Here, it is helpful to take a step back and consider the ultimate goal of EAC use, which is to drive sectoral decarbonization. In this sense, EAC usage should provide the right incentives to drive the market towards the mix of decarbonization technologies envisioned in net-zero trajectories.
For cement and concrete, the world not only needs SCMs, but also decarbonized clinker / novel binders for the rest of the cement content. If the EAC market is not structured in a way to also promote these other necessary decarbonization solutions, it is insufficient. Put more simply, if companies can just use SCM EACs to cover all their Scope 3 concrete exposure, this could prevent decarbonized clinker / novel binders from receiving the necessary benefits from EACs, particularly if SCMs were able to achieve more competitive EAC pricing.
Given these factors, we have also added guidance in the allocation methodology attached to the EACs for buyers to limit their SCM EAC purchases based on the maximum substitution rate possible for the given SCM. This maximum substitution rate reflects what is physically / commercially achievable for a given SCM, and evidence for it is attached to the EAC [7]. When also factoring in the WAF, the maximum advised EAC purchase then becomes:
The result of this advised constraint is that buyers are also guided towards procuring EACs for other key decarbonization solutions such as decarbonized clinker (e.g. via CCS) or novel binders.
Finally, we note that multiple SCMs are often used in concrete mixes. Buyers may therefore want to limit their total SCM EAC purchase (across all EAC types) to be capped to a value that reflects the maximum substitution rate achievable from combined SCM use. This combined maximum substitution rate for most applications can be taken to be a value of 60–70% [8].
Where to next
A key point to mention is that S3 Markets’ focus is on issuing EACs at the SCM level for novel SCMs, not for “traditional” non-beneficiated or non-activated SCMs such as fly ash or GGBFS.
The reason for this is that fly ash and GGBFS SCM use is already common practice and often carries no green premium, and so EAC issuance would not play a significant role in helping to expand usage and drive sectoral decarbonization. It could even cause a detrimental effect, as low (or negative) green premiums of traditional SCMs could enable very low-priced EACs, whose market effect could be to reduce the demand for novel SCM EACs, preventing such solutions from accessing the necessary catalytic capital. This exclusion does not necessarily apply to beneficiated or activated SCMs, where additional steps have been taken to recover, upgrade, or activate the SCM material—beyond what is normally undertaken for traditional SCMs.
S3 Markets also recognizes that the issuance approach detailed here is relatively novel, and goes beyond currently available sector-specific EAC Standards at the time of writing. The rationale for this comes down to the urgency of the climate crisis, combined with the strong climate case for SCM EACs.
Nonetheless, an important priority of S3 Markets is also to align and update its guidance and approach where possible based on any emerging sector-specific standards for SCMs. This will help to ensure comparability across the EAC market for buyers and build trust.
Summary
In summary, to ensure integrity, S3 Markets’ issuance process involves evidence attached to the EAC regarding the SCM’s weight adjustment factor and maximum substitution rates. An emissions allocation methodology is also attached that provides guidance to buyers on how to account for the EACs in a way that recognizes these factors. S3 Markets does not control or audit how buyers make claims, and we encourage standard-setters to provide more formalized procedures.
The urgency of the climate crisis demands innovation, and S3 Markets and its partners are committed to forging ahead in a way that both drives critical sectoral decarbonization and upholds the broader integrity and principles of the wider burgeoning EAC market.
Notes and references
- Net Zero Roadmap — IEA. Based on reduction of clinker-to-cement ratio. Read the IEA report
- Concrete Future: The GCCA 2050 Cement and Concrete Industry Roadmap for Net Zero Concrete — GCCA. Read the GCCA roadmap
- Standards often emphasize a decarbonization threshold as part of the eligibility criteria for EAC issuance at the cement or concrete level (e.g. 50% relative to a baseline). However, a challenge is that SCMs are often used to replace 20–30% of clinker (by mass) in a concrete mix, with a maximum substitution rate of 50% often quoted for most SCMs. As such, it is very difficult to meet the decarbonization threshold for cement or concrete purely via SCMs. This effectively rules out novel EAC developers from gaining access to catalytic capital they need, slowing down sectoral decarbonization. This constraint also does not adequately recognize the accepted role for SCMs, where they are intended to replace a portion of cement in current decarbonization trajectories.
- For example, ASTM C39. View ASTM C39
- Contact S3 Markets for additional explanation on the derivation of this formula if needed.
- We acknowledge that there is ambiguity in what evidence can be provided to “prove” the typical or expected substitution rate. Here, we advocate for providing a mix of independent references. If the WAF is expected to vary significantly with the substitution rate, a sensitivity analysis is performed to calculate the WAF at different substitution rates to provide transparency to buyers and auditors.
- Evidence can include examples of real-world deployment, along with compressive strength testing at the maximum substitution rate.
- See, for example, Use of SCMs for Concrete (2025), Chapter 3: State DOT Practices — National Academies; Standards for Concrete — MPA; and Achieving Net Zero Heavy Industry Sectors in G7 Members — IEA. Higher combined substitution rates can be relevant for some applications. Some older analyses point towards a slightly lower maximum combined SCM usage rate of 50%. The relevant maximum combined substitution rate can be considered to be partly geography-specific due to local standards. National Academies · MPA · IEA