Displaying items by tag: carbon border adjustment mechanism
Polish cement industry advances with CCS technology
19 April 2024Poland: Polish cement producers are set to build carbon capture installations, supported by government policies. After a decline in production from nearly 19Mt in 2022 to about 16.5Mt in 2023, the industry is facing an increase in cheaper imports from outside the EU, particularly Ukraine, and CO₂ emission fees that account for 30% of the cost of 1t of cement, according to the Dziennik Gazeta Prawna newspaper. The EU has also introduced a carbon border adjustment mechanism (CBAM) for imports.
Despite these challenges, the Kujawy cement plant in Bielawy, owned by Holcim, is launching the large-scale implementation of carbon capture and storage (CCS) technology.
Holcim Polska's president, Maciej Sypek, said "The construction of carbon capture installations in our plants will cost between €320m and €400m. We received a €264m grant from the European Commission's Innovation Fund." According to Sypek, the project is currently in the design phase, with construction expected to start in 2025 and operations beginning in early 2028.
The implementation of CCS at the Kujawy plant could potentially lead to an industry-wide adoption of the technology, costing between US$3.7bn and US$4.9bn, according to the newspaper. Holcim Polska plans to liquefy the CO₂ and transport it by rail to a terminal in Gdańsk, where it will be shipped to the North Sea for underground storage. Cement producers are urging the Polish government to appoint a commissioner for CCS infrastructure and to enact legislative changes to support the construction of such installations. They also believe that rapid modernisation of the energy sector needs to occur to support the energy-intensive process of gas capture.
Cemsuisse urges CBAM adjustment for cement industry
25 March 2024Switzerland: The decision of the Swiss government in June 2023 against the implementation of a Carbon Border Adjustment Mechanism (CBAM) has been strongly criticised by the Swiss cement association, Cemsuisse. The association warns of a potential relocation of the Swiss cement industry without such a mechanism, referencing a report by Polynomics. This report concludes that a Swiss CBAM is necessary to level the playing field with EU and non-EU cement suppliers. The EU initiated a CBAM test phase in October 2023, aiming to mitigate production relocation risks to countries with less stringent environmental regulations.
The federal government concluded that a CBAM in Switzerland would benefit few emission-intensive industries at the expense of the wider economy, while also facing regulatory and trade policy risks. It plans to reassess the need for a CBAM in mid-2026, in line with the EU's interim CBAM report.
Cemsuisse, referencing the Polynomics report, states that waiting to potentially introduce a CBAM in Switzerland is not an option. Investments in carbon capture and storage (CCS) are deemed essential for Switzerland's net-zero climate goal and without a CBAM, there is a risk of these investments being unviable due to uncertainty over cost recovery.
The report also points to the risk of increased clinker imports from third countries into the EU, which would be processed and then exported to Switzerland without CBAM levies. As an example, Cemsuisse mentions a planned milling station in Ottmarsheim, Alsace. It says that without a CBAM, the production site in Switzerland faces serious threats.
Cemsuisse said “Without CBAM, this certainty is lacking. And without CCUS, long-term production in Switzerland won't be viable. The population has accepted the climate protection law last summer, where the net-zero goal is legally anchored."
Update on Türkiye, March 2024
13 March 2024TürkÇimento revealed this week that cement production in Türkiye grew by 10.5% year-on-year to 81.5Mt in 2023. In a press release describing the progress of the local cement sector, the cement association reported that domestic sales rose by 19% to 65Mt but that exports fell by 28% to just under 20Mt. Fatih Yücelik, the chair of TürkÇimento, also said that his country was the second largest exporter of cement in the world in 2023 and that its most important target market was the US. He noted that the construction sector grew by 8% during 2023, that reconstruction projects were enacted following earthquakes in early 2023 but that no further growth in domestic sales of cement was anticipated in 2024.
As is standard for these kinds of occasions, Yücelik also raised the association’s sustainability ambitions, describing his sector as one “whose main goal is to provide low-carbon production.” He added that the Turkish cement industry supports the country’s net zero target of 2053. To this end the association has also released its first sustainability report, for 2022, covering 48 of the country’s 52 integrated plants. The Hürriyet Daily News newspaper offered one reason for this enthusiasm for sustainability: the US$30bn in investment required to meet that 2053 net-zero target. It also reported that Yücelik said that the industry needed to spend US$2bn towards meeting the incoming requirements of the European Union Carbon Border Adjustment Mechanism (CBAM).
Graph 1: Domestic and export cement sales in Türkiye, January – October, 2017 – 2023. Source: TürkÇimento.
TürkÇimento’s data for 2023 currently runs up to October 2023 but it supports Yücelik’s assessment. As can be seen in Graph 1, domestic sales of cement rose sharply in the first 10 months of 2023, by 20% year-on-year to 53.1Mt, yet exports fell almost as abruptly, by 18% to 13Mt. This is noteworthy, as exports had been rising steadily each year since 2018. Italy-based Cementir provided some context here in its annual report for 2023 saying that it had decided to focus on the domestic market due to greater profitability. Heidelberg Materials’ joint-venture Akçansa echoes these comments, blaming declining exports on “historically low freight rates increasing competitiveness of southeast Asian suppliers” while emphasising that the shift to the domestic market was made to meet increasing demand.
Graph 2: Revenue of selected large Turkish cement producers, 2022 - 2023. Source: Company reports.
Financial information from the larger Turkish cement producers that have released their results for 2023 follows the same pattern. Three of the four companies included in Graph 2 saw sales revenue grow in 2023. The one that saw its revenue fall, Nuh Çimento, is a major exporter. In 2022 for example it supplied 18% of the country’s total cement exports. All of these companies saw operating profit or earnings increase though.
The other big Türkiye-based news story this week was that Taiwan Cement Corporation (TCC) completed the latest increase to its stakes of Cimpor Global Holdings joint-ventures in Türkiye and Portugal. TCC now owns a 60% stake of the business in Türkiye and a 100% stake in Portugal. With respect to the business in Türkiye this means that TCC now has control of the country’s largest cement producer, OYAK Çimento. Once again the CBAM received a mention, with TCC saying in its valedictory statement that it believed that, “whether it's domestic or imported cement, low-carbon cement will become the main competitive advantage for the cement companies entering the European market.”
The domestic market in Türkiye may have seen a bounce in 2023 but the attention of both TürkÇimento, TCC and others are firmly set on the wider market in the region. TürkÇimento’s Fatih Yücelik said that the country’s cement production capacity was 120Mt/yr and that the population would have to be 150m to eliminate the need for exports. Its population is currently just under 85m. Yücelik set a value of US$2bn for his sector to adjust to CBAM but he also remarked that the income from exports in 2023 was around US$1.3bn. This is not an easy investment ‘pill’ to swallow but one that the country will have to digest if it wants to keep its export levels up.
Türkiye: The Turkish cement industry needs to invest approximately US$30bn to achieve its net-zero carbon goal by 2053, according to sector representatives. Additionally, around US$2bn is required to adhere to the European Union’s Carbon Border Adjustment Mechanism (CBAM), according to Fatih Yücelik, chair of the Turkish Cement Manufacturers’ Association (TÜRKÇİMENTO).
Yücelik said “The most important issue for us this year is carbon emissions. The amount of investments to be made swiftly in transformation and efficiency work to overcome the barriers created by the CBAM is around US$2bn. However, under the current situation, it is difficult for us to find this financing.”
There are 77 factories producing cement in Türkiye, according to Yücelik. “They all use kilns which heavily consume energy. We are establishing waste heat recovery facilities. The amount of electricity generated by those units can power 618,000 homes,” he said. The industry also faces rising operational costs, with energy comprising about 80% of these expenses.
EU: The World Cement Association (WCA) has lent its voice to cross-industry support for the roll-out of the European Union's Carbon Border Adjustment Mechanism (CBAM). The mechanism taxes carbon-intensive imports, including cement, in order to prevent carbon leakage under the Emissions Trading Scheme. It first entered force on 1 October 2023, and will conclude its transitional period on 31 December 2025. Through its involvement, the WCA aims to inform and facilitate understanding of CBAM's reporting requirements, emission calculation methodologies and the workings of the CBAM Transitional Registry. WCA members and other stakeholders can access up-to-date CBAM information via a dedicated page on the association’s website.
WCA chief executive officer Ian Riley said "I'm pleased to announce our commitment to supporting our members in addressing the challenges and opportunities of this crucial initiative. The WCA is committed to supporting solutions that promote environmental responsibility and sustainability within the cement industry. We aim to work closely with our members and other stakeholders to navigate the challenges and opportunities presented by the CBAM regulation, ultimately contributing to a greener and more resilient global economy."
Cembureau sets manifesto for industrial transformation
10 January 2024EU: Cembureau has published its manifesto for industrial transformation for the European Parliament’s 2024-2029 legislative term. The manifesto calls for an ambitious EU agenda focused on the implementation of the European Green Deal along five key lines: 1 - turbo-charging EU and national funding and developing national industrial decarbonisation plans; 2 – Rolling out the EU Carbon Border Adjustment Mechanism (CBAM) to create a level playing field for EU industries; 3 – Building a pan-European CO2 capture network and moving towards circular carbon feedstocks; 4 – Placing circular economy at the heart of industrial decarbonisation; 5 – Enhancing the EU buildings’ agenda to significantly cut emissions.
Cembureau said “The European cement industry was one of the first sectors to present a 2050 Carbon Neutrality Roadmap following the publication of the European Green Deal. The past five years were marked by the development of a comprehensive EU legislative framework and the launch of significant decarbonisation investments in our industry. Now, with the deployment of carbon-neutral cements within our grasp, we need to implement transformative measures on innovation, infrastructure, public acceptance, digitalisation and skills development.”
Mineral Products Association welcomes UK cement carbon border adjustment mechanism plan
19 December 2023UK: The Mineral Products Association (MPA) has welcomed government plans for the implementation of a UK carbon border adjustment mechanism for cement by 2027. The association urged the government to develop policy and business models for carbon capture, use and storage, including supporting a domestic carbon neutral and negative products sector.
MPA executive director for energy and climate change Diana Casey said “We cannot take our supply of cement for granted and neither can we put ourselves at risk of unstable international trading markets. That is why today’s commitment to a UK CBAM is so important. Levelling the carbon cost between domestic production and imports will help the UK attract the investment required to decarbonise and ensure our long-term security of supply. The Government’s commitment to bring in the UK CBAM by 2027 is very welcome, and ideally it should be introduced in 2026 to align with the EU scheme. This is the only way to prevent any detrimental impact of the EU CBAM on UK industry.” She added “As well as a CBAM on cement, the MPA would be interested in exploring a CBAM on lime. However, the challenge for the lime sector is ensuring that lime exports can compete in international markets.”
UAE: Emirates Steel Arkan (ESA) has appointed consultancy A³&Co. to help plan and implement decarbonisation initiatives at its 5.7Mt/yr Al Ain cement plant in Abu Dhabi. The collaboration will focus on reducing CO2 emissions and costs, in line with the Science-Based Targets Initiative (SBTi)’s 1.5° Pathway for Net Zero and in conformity to the EU’s Carbon Border Adjustment Mechanism (CBAM).
ESA is committed to reducing its CO2 emissions by 40% between 2018 and 2030, and to achieving carbon neutrality by 2050.
Germany and Chile to launch club to help countries reduce emissions from cement production
27 November 2023Chile/Germany: The governments of Chile and Germany are reportedly preparing to launch a so-called ‘climate club’ to help developing nations invest in technologies to decarbonise sectors such as cement and steel production. The partners will set up a platform to connect countries with funding and technical support from governments and the private sector, according to a draft statement seen by Reuters. The statement is expected to be published at the United Nations’ Conference of the Parties (COP) 28 event on 1 December 2023 set to take place in Dubai.
"On hard-to-abate sectors, starting with steel and cement, we will advance conducive policy frameworks for accelerating decarbonisation," the statement said. It added that this will include attempting to coordinate international green industry standards, such as counting the emissions in industrial products.
A website for the club lists 33 members including the US, Argentina, Australia, Canada, Colombia, Egypt, the European Union (EU), Indonesia, Japan, Kenya, Mozambique, Morocco, Ukraine and the UK. It has been viewed, in part, as an attempt to reconcile countries annoyed by the EU’s Carbon Border Adjustment Mechanism (CBAM), which started in October 2023. However, neither China nor India appears to have joined the ‘climate club’ so far.
Mineral Products Association bemoans UK budget’s lack of commitment to a UK carbon border adjustment mechanism
23 November 2023UK: The Mineral Products Association (MPA) has called on the UK government to publish its promised response paper to consultations over a proposed UK carbon border adjustment mechanism (CBAM) for imports of goods produced by heavy industries, including cement. This follows the failure of the government’s latest budget for 2023 to commit to the development of a national CBAM. The MPA said that it was ‘deeply disappointed’ with the outcome.
MPA executive director for energy and climate change Diana Casey said “The delay in committing to a CBAM sends the signal that the UK is not the place to invest. Cement is essential to our everyday lives. The construction of our homes, hospitals, offices and much more depend on it. We cannot take its supply for granted and neither can we put ourselves at risk of unstable international trading markets. Levelling the carbon cost between domestic production and imports is vital to attract the investment required to decarbonise and ensure our long-term security of supply. The UK government must urgently commit to a CBAM on cement.”