The World Cement Association (WCA), stategy and industrial consultant A3&Co® and Arabian Cement discuss the sustainability picture in the Middle East and North Africa, with a focus on the Egyptian market.
Global Cement (GC): How would you characterise sustainability within the Middle Eastern and North African cement sectors at present?
Ian Riley (IR): For the past 25 years or so, the global cement sector has built on three main levers to reduce its impact on the natural world: Energy efficiency, alternative fuels and clinker factor. Of course, this has also brought it financial benefits, mainly from using less fuel.
The challenge for the cement industry during the 2020s is to take those same steps in all markets. This applies to many countries, including several in the Middle East and North Africa. There’s a lot of potential to reduce CO2 emissions in a relatively short period of time while reducing cost simultaneously in some of these cement sectors. There’s a lot of low-hanging fruit.
The opportunities are certainly large. Embodied CO2 emissions in the region are 800 - 850kg/t and, for a long time, there was no pressing reason to reduce them. However, the global economy is now such that Middle Eastern and North African cement plants, which previously enjoyed state-subsidised fossil fuels, are looking for the same financial - and environmental - benefits from these levers as European plants did 20 - 30 years ago.
Sergio Alcantarilla (SA): The MENA region’s cement sector is a technological follower. As well as a lack of financial drivers, this is also due to relaxed or non-existent regulations. Another very important factor is that the market is fairly set in its ways. There are still many consumers that associate the colour of the cement with quality: the darker the better. These are unrelated, of course.
Unfortunately, this attitude is reinforced by several cement players. These came to the market in the early 2000s without a background in the sector, seeing it as a quick way to make a profit, often through unsustainable practices. These producers in turn represent an income stream for local authorities through tax receipts, often leading to ‘business-friendly’ policies. If these cement producers - significant local employers - are reluctant to invest in alternative fuels, emissions abatement systems, low-clinker blends and so on, it’s likely that the authorities will not enforce them.
Such situations lead to disincentives to invest. For example, Arabian Cement has 10 years of experience in the use of alternative fuels in Egypt. However, up until the past 12 months, alternative fuels were more expensive than fossil fuels. It is not like Europe: Cement plants have to pay for the fuel and then transport it, several hundred kilometres.
At the root of this problem is the fact that, while there is waste everywhere, nobody treats it. Landfill is simply cheaper. As a single plant in a 90Mt/yr market, we cannot transform the situation alone. It needs legal and economic frameworks from the national government.
Amr Nader (AN): The market in Egypt is actually quite unusual for the MENA region in that it is around 70% controlled by multinational players: Holcim, Heidelberg Materials, Cemex, Cimpor and Titan. Even together, they are forced to play by the rules of the local market, which lacks three important factors for sustainable cement production:
1. Proper building codes, including cement and concrete standards;
2. Waste handling infrastructure, although this is changing, particularly for biomass and RDF;
3. Massive cement overcapacity, which discourages efficiency measures.
At present there is a lack of impetus from the national government regarding points 1 and 2. When I worked for Lafarge Egypt, it was very active with using industrial waste as an alternative fuel. Indeed, it was always on the look out for novel fuels, including narcotics that had been seized by the authorities. However, the current government has a lot of influence from the Army, which is both a customer and building materials producer. There is impetus to build big and build fast, not necessarily in a sustainable way. As we head to the COP 27 Environmental Conference in Sharm El Sheikh in November 2022, I am hopeful that this enthusiasm will be directed to building green too, following a number of recent pronouncements regarding the environment. Egypt is a developing country on the frontline of climate change. It must act now.
There are a number of factors that should help Egypt, and several other large cement sectors in the MENA region, as it transfers to lower CO2 practices. Most of the plants are relatively modern, with inline calciners and preheaters that are relatively easy to adapt. The technology is arguably in a better position than Europe’s cement production infrastructure was when it began its journey.
GC: Where is the most sustainable cement sector in the MENA region?
AN: I would say that Morocco is the best example of sustainable cement production in the MENA region. Like Egypt, Morocco, is very well off in terms of its installed technology. However, unlike Egypt, it already has waste management systems in place, with up to 35% alternative fuel use in some cases. There are also many captive solar plants and the necessary standards to build sustainably.
Elsewhere, the UAE has good waste handling infrastructure, but the cement sector has not taken advantage of this yet. There are unrealised opportunities for regulations to make the right changes.
Somewhere in the middle comes Saudi Arabia. Another 80 - 90Mt/yr industry like Egypt, it has a large population generating a big landfill problem and relatively modern cement plants. Adaptation should be easy and there are some big promises from the government on the climate side. I would say that Saudi Arabia is ‘ahead’ of Egypt on balance, due to its greater emphasis on energy management policies in cement production and construction.
In the medium term, these three industries - Saudi Arabia, Egypt, UAE - will be the main points of focus for sustainable production within the MENA region due to the size of their industries and the relative ease with which they should be able to optimise. These countries all have construction as their first or second national priority right now.
GC: What kinds of sustainability projects are cement producers carrying out at the moment?
SA: Amr mentioned alternative fuels earlier. Arabian Cement burns around 700 - 800t/day of municipal solid waste, used tyres, dried sewage sludge, wastes from local leather produers, even medical waste. However, getting hold of it is very difficult. Supply volumes and calorific value can vary enormously, so that we have to change the fuel mix every 3-4 days. This makes it hard to run the plant consistently, even with up-to-date technology, such as our FLSmidth HotDisk.
In the area of supplementary cementitious materials (SCMs), there was almost nothing on this in Egypt until around a year ago. Before then, we had to put a red label inside every single bag of any cement that wasn’t CEM I, to indicate that it ‘wasn’t suitable’ for mass concrete. This, again, plays into the attitude I mentioned earlier, but this is slowly changing. It could be worse... in neighbouring Sudan CEM II is still banned for most applications.
But this area shows the changes that we can make in the Middle East during a very short time. From a clinker factor of >90% in 2019, we are now looking at 84-85% as an industry across Egypt as a whole. This is incredible movement in such a short space of time, one of the low-hanging fruits that Ian mentioned earlier.
But, despite the ecological and financial advantages of this change, we still have to discuss why the cement has become lighter in colour... on a wholesaler by wholesaler basis. They don’t like it, even after seeing the improved strength performance. We have a big hill to climb on this on the PR side.
GC: What else does Arabian Cement do?
SA: Taking things away from the market, Arabian Cement installed a 7MW captive solar plant in the mid 2010s. It provides 4% of the plant’s electrical energy. We are now planning a contract for another 13MW of solar power to bring our total to 10%. This project had been planned for 2019, but was delayed due to the introduction of a feed-in tariff by the current government. A lot of the difference between the grid price and the captive solar price has been eroded, which has likely halted similar projects elsewhere.
However, Arabian Cement took the decision to press ahead with the project as, in the longer term, the price of electricity from the grid is only going to rise. It probably won’t hit European levels just yet, but decreasing our outgoings, specifically the embodied CO₂ of our cement, will become an important differentiator between Arabian Cement and other Egyptian exporters in the future. This is due to the EU Emissions Trading Scheme (ETS) Carbon Border Adjustment Mechanism (CBAM). We will be at an advantage compared to other exporters from our region if we can cut our emissions.
Elsewhere, we have worked with Amr and the team at A3&Co to increase the efficiency of our day-to-day activities. We have also become the only Egyptian cement plant certified to ISO:15001.
AN: At A3&Co® we take a full approach to decarbonisation of building materials across the MENA region to reduce the CO2 footprint of buildings as much as possible. For us, this means helping clients stay within the 1.5°C temperature rise scenario as defined by the Paris Agreement. In practice, this means different things in each country and for each cement producer.
With any process, improvement can only come from knowing the starting point. This is where baselining comes in, looking at the embodied CO2 emissions of the building - and specific to this discussion - the cement within it. As 50 - 60% of a building’s CO2 comes from the cement, this is very important.
A3&Co® uses the Environmental Product Declaration Plus (EPD+) approach, which agglomerates all of a cement producer’s individual product EPDs. This method helps to identify the full impact of materials and, where necessary, extend responsibility to help others in the value chain. We argue that national governments must reshape policies to support the cement sector to baseline and, crucially, improve, rather than just apply labels that help the end buyer.
IR: With the EPD+ approach, construction companies actually become aware of - and can act upon - their Scope 3 CO2 emissions. Construction companies can suddenly discover that they had a footprint 100 times larger than they previously thought. The cement sector will need to supply more information than in the past and everyone will see where the opportunities are.
AN: Once you develop the baseline, you come to the action. As mentioned by Sergio, first comes operational excellence within individual plants. Often these are relatively small changes to prevent unwanted energy losses from the system. Cost reduction is the key motive for operational excellence within the MENA market. Reduce costs and, if you do it right, you can reduce the CO2 emissions of the process too. This includes finding small improvements across operations, thermal energy consumption, electrical energy consumption, maintenance, debottlenecking, internal procurement procedures, cost management, product development and clinker quality.
An example of this is the lack of SCMs, discussed earlier with relevance to Egypt earlier. In many markets kiln bypass dust simply goes to landfill. If we can convert this to an SCM, this will reduce cost, reduce clinker use, reduce CO2 emissions and reduce landfill all at the same time. Calcined clay is another solution that could work well. Again, a lack of policies and standards presents a major barrier to greater use.
GC: What is the number one thing for the governments of the region to do to decarbonise?
IR: As seen in Egpyt, the most powerful individual step is to reduce the clinker factor. This presents different challenges in different countries. Another opportunity is green building codes to prompt more careful and appropriate use of cement and concrete. Building codes and attitudes both need to change, but we are starting to see promising trends across the region.
GC: Thank you for your time and insights today.
IR/SA/AN: You are welcome Peter.