The news that China is considering more stringent NOx emission regulations for cement plants is encouraging – and not just for the environment. Other cement industries, such as those in western Europe, have been subject to the most stringent environmental regulations on the planet for many decades now. Elsewhere, the US cement industry is currently locked in battle with the Environmental Protection Agency over stringent new emissions targets. Now it looks like China, with a cement capacity of ~2000Mt/yr and the highest share of CO2 emissions in the world, might be accelerating its progress down the 'green' route.
The new Chinese NOx regulations could reportedly see a third wiped off the cement industry's massive net profits by 2015 and cause 'huge pressure' for the industry according to the Chinese Vice Minister of Environment Protection. With most industries in China currently operating outside meaningful environmental limits, the move towards lower emissions in China is likely to be unpleasantly costly. Indeed China has already said that it is committed to closing the least efficient 33% of its cement capacity by 2015.
If new regulations go ahead and are effectively enforced, they will prompt Chinese producers to act locally while they close or improve their plants, diverting attention away from exports and expansion overseas. In the short to medium term, this will dampen the competitiveness of the Chinese industry and allow neighbouring countries some respite against Chinese exports. The move to clean up China's cement industry (and industries in general) will also require environmental know-how, something that established European and US-based companies are well placed to provide.
Another notable story this week comes from the US, where a concrete producer has recently been given the go-ahead to set up a captive cement plant. Ozinga Bros. Inc. says that if and when concrete demand returns to the US, it wants to be able to secure its own cement supplies. In the last boom it had to import cement from the Far East to fulfil its contracts, with crippling transport costs. Company owner Martin Ozinga IV described the plans as 'a survival move' – perhaps going against the grain is the only way for the company to survive.
