Early market creation measures: Offtake agreements and long-term contracts

Current status of implementation and existing gaps

The road freight industry is increasingly considering zero-emission trucks as a viable option for decarbonising fleets. Several original equipment manufacturers are leading the way by establishing ambitious goals to produce battery electric trucks.

Examples and initiatives

Daimler Truck expects up to 60% of its European sales to come from EVs by 2030, while Volvo aim to achieve a 50% of all global sales to be electric within the same time frame (Soulopoulos, 2023). Maersk, Sysco, Holcim, Schneider National, and Rio Tinto have placed orders for heavy-duty electric trucks from Daimler, Volvo, Scania and others.

Current status of implementation and existing gaps

The co-operation of private actors along the supply chain can also play a role in de­risking investments. Such vertical integration can help ensure a stable demand for the fuel producer, facilitate financing of the fuel projects, and ensure the security of supply to the shipping company at a predetermined price.

Examples and initiatives

The First Movers Coalition shipping initiative includes carriers and cargo owners using a share of the zero-emission fuels for deep-sea shipping. The shipping initiative includes several industry players, such as Mærsk, Yara International and Moeve (FMC, n.d.).

Hapag-Lloyd and Maersk have signed a long-term offtake agreement with Goldwind for green methanol (Hapag-Lloyd, 2024; Maersk, 2023).

Current status of implementation and existing gaps

The number of SAF offtake agreements has risen significantly in recent years, reaching a cumulative volume of 50 billion litres, with more than 140 contracts as of February 2025. These agreements extend over multiple years. (ICAO, n.d.)

Examples and initiatives

United Airlines has contracted 14 billion litres through seven contracts (ICAO, n.d.).

Current status of implementation and existing gaps

Several global steel players are taking steps to decarbonise their steel production and forming partnerships to pool demand for green steel. As of December 2024, approximately 140 offtake agreements for low-carbon primary steel had been signed, with the automotive sector and consumer goods and equipment manufacturers leading the way. Despite this progress, the volume of these private sector commitments still represents a negligible share of today’s overall steel demand.

Examples and initiatives

Some notable examples of offtake agreements include Volvo Trucks’ purchase of SSAB’s first batch of fossil-free steel and Mercedes Benz’s agreement with Stegra (formerly known as H2 Green Steel) (IRENA, 2024b).

Current status of implementation and existing gaps

Producers have signed several offtake agreements for low-emission chemicals or feedstocks to produce chemicals through supply agreements and procurement tenders. Several of these initiatives are in the EU due to the EU Emissions Trading System and the mandates listed under the Renewable Energy Directive.

Examples and initiatives

Infinium plans to supply e-naptha using captured CO₂. The project will use naptha to produce olefins at the Porvoo facility in Finland (Borealis, n.d.).

TotalEnergies has signed a 15-year supply agreement with Air Products for an annual supply of 70 000 tonnes of green hydrogen (Air Products, 2024).

Current status of implementation and existing gaps

Offtake agreements and long-term contracts are emerging to incentivise low-carbon cement production, and public and private procurement programmes are starting to include long-term purchase commitments to support green cement projects. However, price volatility and the limited adoption of low-carbon technologies by large-scale commercial cement plants remain key challenges.

Examples and initiatives

Some notable examples include First Movers Coalition – members commit to purchasing at least 10% near-zero emission cement by 2030.

The Cemex-led buyers’ coalition and Holcim’s carbon-neutral material partnerships are examples of industry-led offtake agreements (The Breakthrough Agenda Report, 2023).