
Displaying items by tag: Activism
Switzerland: Environmental activists have occupied a forest on private land next to the Gabenchopf quarry that supplies limestone to Holcim Schweiz’s Siggenthal cement plant. The activists are protesting about a planned expansion to the quarry, according to the Blick newspaper. Police have described the mood of the activists as ‘peaceful.’ The occupation follows a similar protest against expansion of another Holcim-owned quarry at Mormont, Vaud, in 2021.
Credit and quarries
07 July 2021There was good news from the corporate finance sector for cement producers this week in the form of an approving statement by Fitch Ratings. It declared that it expected the sector to be able to pass on the costs of decarbonisation to customers due to a lack of alternatives. It recognised the challenges posed by regulators, investors and societal pressure but, even so, it suggested that cement was still an industry worth backing. Or at least for now. Added to this, it forecast that demand for building materials would grow to support the transition to a low carbon economy and to combat the damage caused by climate change. It did admit that the capital or operating costs required to decarbonise are seen as being potentially large, especially with uncertainty over how much governments will pay or incentivise. Yet the timescales involved are beyond the ratings agency’s ‘horizon’ hence no really disruptive shifts in producer economics are expected anytime soon.
This was obviously a win for the cement industry and its cheerleading associations led by the Global Cement and Concrete Association (GCCA), the World Cement Association and the regional associations. After all, the increasingly convergent message to the wider world has been along the lines of ‘concrete is part of the solution and you need our products because there’s nothing else.’ Good timing then for the GCCA to launch its collaboration with the World Economic Forum, the ‘Concrete Action for Climate’ (CAC) initiative. The collaborative platform is planned to help drive the industry’s journey to carbon neutral concrete by 2050 as part of the wider Mission Possible Partnership, a wider coalition of public and private organisations working on setting the heavy industry and transport sectors towards net-zero. Expect lots more of these kinds of announcements on the road to the 26th UN Climate Change Conference of the Parties (COP26) taking place in Scotland in late October 2021.
Fitch Ratings did point out that societal awareness was likely to accelerate decarbonisation. The sharp end of this trend was experienced by the building materials industry this week when environmental activist group Extinction Rebellion forced operations to stop temporarily at LafargeHolcim’s Port de Javel ready-mixed concrete plant in Paris on 30 June 2021. This followed a similar incident by the same group at a LafargeHolcim subsidiary ready-mix plant in London in mid-2019. Given the share of global CO2 emissions from the cement-concrete production chain, it is perhaps surprising that climate activists haven’t targeted clinker-producing cement plants directly in the same way that they have gone after coal-fired power stations. Clinker kilns are, after all, the source of the majority of the sector’s emissions. However, blockading a concrete plant in the city may conjure up a more potent media image than doing the same to a factory out in the country.
Instead the battles with cement plants and their quarries tend to be of a ‘not in my back yard’ (Nimby) nature. Or rather ‘not in my monastery (Nimmon?) this week, with the news that a subsidiary of YTL Cement in Malaysia is attempting to evict a group of Buddhist monks and their underground place of worship from a quarry on Mount Kanthan in Perak. In the latest twist of the long running saga, the monks have hit back with an attempt to get their portion of the site recognised as a place of worship and a heritage site. Thankfully a more positive example of how quarries can fit in with the wider community could be found this week in the guise of an archaeological dig at CRH subsidiary Tarmac’s Knobb’s Farm quarry in Cambridgeshire, UK. The discovery of a Roman Britain-era cemetery with a high proportion of decapitated bodies may have been gruesome but the relations between the operator and the archaeologists were much more harmonious. Another recent example was the discovery of what may be a new precursor species of humans, unearthed at a quarry run by Nesher-Israel Cement Enterprises site at Ramla in late June 2021.
The paradox building materials producers pose to environmental activists could be summed up by the record heat wave that hit the north-western region of North America recently. CO2 emissions, in minor part produced by the cement and concrete industries, are the most likely reason for an increased frequency of extreme weather events such as this. Yet, infrastructure such as pavements and roads were widely reported as having buckled in the heat, principally because they weren’t built for such high temperatures. They will have to be rebuilt to withstand similar temperatures in the future. Building materials can thus be seen as both part of the problem and part of the solution. Yet with net zero targets nearly 30 years away it seems likely that continued extreme weather events and their potentially lethal consequences will speed up the public demand for decarbonisation. It is worth noting here that one of Extinction Rebellion’s demands in the UK is that the country should become net zero by 2025.
Fitch Ratings has cast its vote for now and Extinction Rebellion and its fellows are set to continue to wage their political campaigns. In the meantime it is debatable how much spiritual solace will be found by the monks of Mount Kanthan during blasting hours at the neighbouring quarry.
France: Extinction Rebellion activists forced operations to stop temporarily at LafargeHolcim’s Port de Javel ready-mixed concrete plant in Paris on 30 June 2021. Members of the climate activist group trespassed on the site to denounce what they called the company’s firm's environmentally damaging pursuit of profit, according to Reuters. The building materials producer was forced to divert its trucks to another site during the chaos. Earlier in the week protestors from Extinction Rebellion and the non-government organisation Soulevements de la Terre targeted another LafargeHolcim site near Paris.
In late 2020 the council of Paris voted to withdraw permissions for a planned expansion to LafargeHolcim subsidiary Lafarge France’s Bercy concrete plant after protesters captured footage of a slurry spill that the company called ‘exceptional.’
LafargeHolcim currently has a target to reduce its CO2 intensity in cement to 475kg net CO2/t by 2030. The group says it hopes to become ‘net zero’ in the future. It is currently working with the Science-Based Targets Initiative (SBTi) to define a roadmap to 2050 to, “reduce scope one CO2 emissions to a target consistent with a net zero pathway endorsed by SBTi.”
Trade versus climate on the edge of the EU
09 June 2021Little trickles of detail about the European Union’s (EU) proposed carbon border adjustment mechanism (CBAM) started to emerge last week. The key bit of information that Bloomberg managed to squeeze out of their source was that a transition period with a simplified system is being considered from 2023 and then a full version could turn up in 2026. Cement importers, and those in selected other heavy industries, would be required to buy electronic emission certificates at prices corresponding to those in the EU emissions trading scheme (ETS). Other titbits include: that the prices will be set on a weekly basis based on the average carbon permit price within the EU that week; a default value will be devised for importers who can’t back up their emissions data; and imports from a country with its own carbon pricing scheme will be entitled to a discount. The plans are due to be made public in mid-July 2021. Debate is then expected to follow before approval will be required from the European Parliament and member states.
The detail isn’t out there yet but the CBAM is set to collide with trade agreement territory. For example, how the draft agreement tackles issues such as exports from Europe and whether importers should be compensated for not receiving a free allocation of carbon credits could be seen to offer competitive advantage to one party or another. Climate policy will clash with trade policy once or if the CBAM makes in into law. At this point countries that import cement into the EU may start trying to negotiate or complaining to the World Trade Organisation. One previous example of climate policy bashing into trade agreements is when the EU tried and failed to apply the ETS to aviation in the early 2010s. The experience from this incident is expected to inform the European Commission’s approach on the CBAM.
Outside the EU, new carbon pricing schemes have been popping up all over the place and various cement associations are creating or refining their own carbon neutral plans. Last week in North America, for example, the Cement Association of Canada said it was working with the government on launching a roadmap by the end of 2021. In the US, the Portland Cement Association (PCA) has also been hard at work to publish its own roadmap by the end of 2021. Meanwhile, over in the oil sector there were a couple of victories for activist shareholders in May 2021 with Shell, Exxon Mobil and Chevron all being forced to make changes to their climate change polices by courts and activist investors. This makes one wonder how long it will be before the same thing happens to cement companies.
All this increases the pressure between trading agreements and climate legislation. One of the questions that has popped up at Global Cement’s webinar series has been whether attendees thought that a global carbon pricing and/or trading scheme might be a realistic position or not (the majority said ‘yes’ within 20 years). Yet the EU CBAM, all these sustainability plans and continued pressure by investor activist don’t happen in isolation. They occur in an interconnected world.
So it was both non-surprising and eye-popping to discover recently that a private carbon exchange is being prepared in Singapore for a launch by the end of 2021. Climate Impact X (CIX) is being backed by DBS Bank, Singapore Exchange, Standard Chartered and the Singapore-government owned investment company Temasek. As for which companies would actually voluntarily enter into a scheme that would actively reduce profits, the answer lies above. Any organisation looking to trade between carbon pricing jurisdictions might well have an economic incentive to find a truly international scheme that was reputable. Or, perhaps, a publicly owned company dealing in carbon-intensive products might be bullied into one by its activist investors. The focus on such an exchange being reputable is essential here, given the potentially large amounts of money that could be involved and the mixed views on existing carbon offsetting schemes. CIX says it will use satellite monitoring, machine learning and blockchain technology to ensure the integrity of its carbon credits and this is certainly thinking in the right direction. Until it arrives though, we wait to see the detail on the EU CBAM.
Switzerland: Police have cleared 150 squatters from the site of a planned expansions to LafargeHolcim subsidiary Holcim Schweiz’s Mormont quarry in Vaud. Reuters News has reported that officers made 34 arrests. The squatters claimed to be protesting in the interests of biodiversity protection and CO2 emissions reduction.
UK: The Institutional Investors Group on Climate Change (IIGCC) has called on European building materials companies to take steps to fight climate change or face commercial extinction. Recommended changes from its new ‘Investor Expectations of Companies in the Construction Materials Sector’ report have been sent to the heads of LafargeHolcim, HeidelbergCement, CRH and Saint-Gobain. The report informs investor engagement with other construction material firms on the initiative’s global list of 161 focus companies. Investment bodies in the group represent US$2Tn in assets, assets under management and under advice.
“The cement sector needs to dramatically reduce the contribution it makes to climate change. Delaying or avoiding this challenge is not an option. This is ultimately a business-critical issue for the sector,” said Stephanie Pfeifer, the chief executive officer (CEO) of the IIGCC. “Major economies such as the UK and France are increasingly adopting economy-wide net zero emission targets. The cement sector needs to get ahead of the profound transformation their sector faces by addressing barriers to decarbonisation in the short- to medium-term if companies are to secure their future.”
Key details set out in the ‘Investor Expectations’ report include becoming carbon neutral by 2050. Companies are expected to set short, medium and long-term science-based targets to reach this goal. Building material companies should be public policy transparent and advocate for the Paris Agreement, they should implement a ‘strong’ governance framework assigning specific responsibility for climate change to a board committee or board member and they should provide enhanced corporate disclosure in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The IIGCC recognised the steps HeidelbergCement in particular has taken in already having committed to meeting key aspects of the investor expectations it has outlined. CRH, LafargeHolcim and Saint-Gobain have been encouraged to follow suit, given the ‘significant’ role they play as European-based multinationals. The group also praised the ambitious targets set by India’s Dalmia Cement to become carbon negative by 2040.
UK: Climate change protestors from the Extinction Rebellion group have been arrested for blockading a ready-mixed concrete plant operated by London Concrete at Bow in London. Concrete from the plant is being used to supply a major road tunnel project at Silvertown beneath the River Thames, according to Reuters. Extinction Rebellion blamed concrete production for being a major source of CO2 emissions and it also has concerns about dust pollution. Seven people were arrested by the Metropolitan Police for aggravated trespass. London Concrete is part of LafargeHolcim Group. It operates 12 concrete plants in London.
Myanmar: Residents have signed a petition asking the Karen National Union (KNU) to cancel the Min Lwin Mountain quarry and cement plant project. Local activists say that the plant could lead to environmental concerns and land disputes, according to local press. The Phyu Min Tun Company Limited started mineral tests at the site in 2014. However, the KNU suspended the project in May 2016 in response to protests and complaints lodged by the Min Lwin Area Natural Environment Protection Committee. Despite the cancellation representatives of the KNU have continued to discuss the project with local residents leading to renewed opposition.
Who watches the cement plants?
13 August 2014The comic book series 'Watchmen' takes its title from the Latin phrase 'Quis custodiet ipsos custodes?' which is translated as 'Who watches the watchmen?' Commonly used today to warn against government, police and judicial corruption, the saying might also apply to those groups who watch big industry such as the Atlas of Environmental Justice.
This initiative is an online database compiled by the Environmental Justice Organisations, Liabilities and Trade (EJOLT) to map environmental conflicts around the world. It's a great tool, it is professionally presented and the project is backed by the European Commission. EJOLT's goals are to give those fighting for environmental justice a voice and to gather data to allow policy change.
As ever the problem with any form of user-content database is who vets the submissions and how much of 'reality' does the data actually represent compared to a more curated project. The mass use of Wikipedia shows that these issues can be overcome to some extent, while user-submitted online hotel and restaurant reviews often suggest otherwise.
All three conflicts registered in the EJ Atlas in southern England, where the Global Cement office is based, offer incomplete or misleading data. The entry for the third runway expansion at Heathrow airport doesn't present the economic benefits of expanding the airport or what the alternatives are. Rightly, the activists will argue that they have significantly smaller resources compared to the big industrial multinationals to fight their corner. Unfortunately this shows in the EJ Atlas and the user-submitted data approach it uses.
At the time of writing only 15 cases are tagged as cement-related out of a total of 1154. This is far fewer cases than you might expect with no mention, for example, of any of the regular environmental scuffles the cement industry faces in North America. The cases it does list are mainly based in Latin America with other clusters in southern Europe and India. Of these, three have been mislabelled and are not even related to the cement industry. The rest are mainly concerned with pollution due to waste incineration and mineral extraction worries. The waste incineration listings have a certain irony about them considering that these cement plants are almost certainly praising themselves for their reduced carbon emissions!
In the online world big companies can sometimes be at a disadvantage to nimble activist campaigns. Journalists from national media outlets can easily find campaigns with a web or social media presence to provide counterpoint for editorial. A good example is the Stop Titan Action Network that formed to fight Titan America's cement plant in Castle Hayne in North Carolina, US.
If the EJ Atlas accrues more attention and/or carries on past its project deadline of 2015 then the problems with the atlas may be fixed as activists log more cases, industry refutes them and the moderators weigh up the arguments in line with the project's aims of environmental justice. As previous online examples have shown, engagement may be better than ignoring these kind of initiatives.