The Cement Industry Post-Covid – Decarbonisation & Sustainability
Manon Burbidge, Communications & Policy Coordinator at The World Cement Association
Although we often hear that the cement industry is a significant source of co2, it has also been one of the earliest hard to abate sectors to recognise the implications of climate change and the need to reduce the industry’s carbon footprint. As early as 1999, ten leading cement companies established the Cement Sustainability Initiative (CSI) as a voluntary, CEO-led global program under the umbrella of World Business Council for Sustainable Development (WBCSD). The ten founding companies were Cemex (Mexico), Cimpor (Portugal), HeidelbergCement (Germany), Holcim (Switzerland), Italcementi (Italy), Lafarge (France), RMC (United Kingdom), Siam Cement (Thailand), Taiheiyo (Japan) and Votorantim (Brazil). At that time, these companies produced about one third of global cement supply and operated in two thirds of the world’s cement markets.
So why does it appear to the outside world that cement is only just taking notice of co2 and other emissions? Part of the issue is that while successive generations of cement pyro-process technologies have substantially improved specific energy consumption, old technologies and plants remain in use – often due to the subsidies that different regions offer.
The ETS, ostensibly a tool for reducing greenhouse gas emissions cost-effectively, also has some unusual outcomes. Some industries, like cement, receive free allowances, an allotment of GHG emissions that incur no fees to the producer. There have been several studies which demonstrate that an over-allocation of emissions allowances (too many free allowances distributed), especially after the financial crisis of 2008, undermines the ETS’s ultimate effectiveness in reducing emissions. The perverse effect of the policy was to incentivise EU producers to keep all of their plants operating at least 51% capacity to maintain the free allowance rather than to close the least efficient lines. The European cement industry capacity is roughly 200% of demand, many inefficient kilns continue to operate, and the industry has reaped an estimated €3-5 billion by selling the unneeded free allowances.
Around the same time as the EU introduced the ETS, China’s NDRC introduced its “Save Energy and Reduce Emissions” policy for the cement industry. A key element of the policy was to encourage the replacement of backwards capacity by putting in place licensing restrictions, penalty electricity prices, compensation for closing plants, government procurement policies and tax penalties. The policy also included mandated plant modifications, most notably to require all lines to include waste heat power generation – a requirement that has reduced electricity demand from the grid by about 25-35kWh/t or the equivalent of 5 large coal fired power stations. The net outcome of this, and China’s supply side structural reform policies, is that as well as improving efficiency, companies are pushed to make production more environmentally friendly and embrace innovation. Emission standards for dust, NOx and SO2 have been tightened and enforcement strengthened. In China today, to obtain a license to build a new cement line, you must close and demolish at least 1.25x the capacity of the new line. New lines are still being installed and setting new benchmarks for energy efficiency.
It is clear that in a post-COVID world with higher debt levels due to the effects of the pandemic and with lower demand likely for the next few years, restructuring is urgent to maintain the health of the industry and to deal with overcapacity issues The need to decarbonise is also vital, and there are multiple levers currently available to cement producers to promote energy efficiency and reduce the inustry’s environmental footprint, such as;
- Alternative fuels – there is huge scope to increase the alternative fuels used in developing countries, which mainly have average thermal substitution rates well below 5%. This compares to more than 60% in some European countries. Increasing the use of AF will depend largely on stricter regulation of waste disposal, and hence the cost of disposing of waste, as well as fuel costs in developing countries.
- NOx reductions – through technologies including multi-staged combustion self-denitration calciners, selective noncatalytic reduction (SNCR), selective catalytic reduction denitration technology or using alternative fuels which contain volatile organic compounds (VOCs) and are rich in nitrogen (e.g. RDF, sewage sludge) to reduce NOx emissions.
- Biodiversity strategies – whether through tree planting, the creation of wetlands, or restoring grasslands – multiple opportunities exist to reduce the impact of limestone quarry sites.
Today’s Challenge: The Performance Gap
The cement industry has been working to reduce CO2 emissions for more than 20 years. Indeed, members of CSI set self-imposed targets for improving specific CO2 emissions relative to 1990 benchmarks. In 2018 these targets were revised to a further 24% reduction by 2050.
The levers to do this outlined above been well understood for many years, however there remains a very large gap between actual performance and best practice. For example, the CSI’s database of their members shows an average of 74 kWh/t power consumption for clinker production, varying from 60kWh/t in India to 85kWh/t in the USA. This compares with less than 45 kwh/t best practice. It is the same story for thermal energy consumption where the database average is 3,512MJ/t versus best practice of about 2,750MJ/t.
For clinker factor and alternative fuel (AF) usage, we can see that the global average in the CSI database for AF is 18% whereas some countries achieve over 60%. For clinker factor the average is 77% while some countries have maintained an average of 60% over many years.
There is still a large gap between current performance and best practice in these traditional levers to reduce CO2 intensity. It is action in this area that will improve industry performance in the next 10 years. WCA members can take advantage of various programs to help them identify and close the gaps between their own performance and best practice. We find that, in almost all cases, reduced CO2 emissions go hand in hand with lower costs and improved business performance.
Tomorrow’s Challenge: New Technologies Towards a Low Carbon Future
In recent times, the industry has recognised the need to go further and has recognised that in a post-Paris Agreement world the industry must get as close to zero emissions as possible. However, as the Energy Transition Commission notes in its “Mission Possible: reaching zero carbon emissions from harder to abate sectors by mid-century” report: “Decarbonising the cement sector poses one of the most difficult challenges in the shift to a low-carbon economy due to process emissions, which are particularly difficult to avoid … Eliminating process emissions will require the use of carbon capture”.
To date, development of CCUS has not received the large-scale investment that will be required to generate rapid progress. While carbon capture is a proven technology, it is still expensive to use and unlikely to progress without regulatory incentives. In addition, carbon storage is both high cost and geographically limited while carbon usage technologies are at an early stage of development. Because of the potentially lower costs of usage vs storage and possibility of integration into existing supply chains, carbon usage in building materials is an attractive possibility.
There are a number of examples of technologies that use CO2 in building materials. WCA member Solidia has developed a low lime, low energy cement reduces both process and thermal CO2 emissions and which rapidly carbonates when exposed to CO2. Another WCA member, CarbonCure, has a technology to inject CO2 into the mixer to improve readymix concrete performance. California based Blue Planet has developed technology to take CO2 without the need for concentration and react with CaO to produce synthetic aggregates.
As more resources are focussed on the problem of climate change, we will continue to see new technologies developed and deployed. Given that the scale of cement and concrete usage is so much larger than any other materials, it is certainly possible that these materials could have an important role not just in reducing man-made emissions but also in reducing CO2 levels in the atmosphere.
We’re keen to hear from the cement sector, but also from others in the valule chain that work hand in hand with our members. For more information, have a look at our work here: https://www.worldcementassociation.org/