Displaying items by tag: CO2

Denmark: Denmark's first CO₂ storage facility is now ready to store CO₂ in the North Sea, designed for large-scale CO₂ containment to combat climate change, according to a press release from project leaders INEOS Denmark. The Project Greensand initiative has completed its pilot phase, confirming permanent CO₂ storage in the Nini West reservoir, 1800m below the seabed.

Following the pilot phase's success, the launch of large-scale CO₂ storage is expected by late 2025 or early 2026, with ambitions to store up to 8Mt/yr by 2030. An investigation is also underway to determine the possibility of storing CO₂ underground on land in Denmark, with the company obtaining an exploration licence from the Minister for Climate, Energy and Utilities earlier in 2024 for an area of Jutland in the Gassum reservoir.

Country manager at INEOS Denmark and Commercial Director at INEOS Energy, Mads Gade said “We emphasised that Denmark has moved to the forefront of CCS in the world when we stored the first CO₂ in the North Sea. Now we are in the process of investigating how to take the next step, and here we stand on the shoulders of the invaluable experience from Project Greensand's pilot. We are keen to continue this momentum with an ambition that Greensand will be the first CO₂ storage facility in operation in the EU, and we are now awaiting the Danish authorities' approval of a permanent storage. This is an important step, because if Denmark takes just 5% of a future CCS market in Europe, it could mean up to 9000 jobs, with an economic potential of US$7.4bn. At the same time, we can support the EU's objectives, because we have all the prerequisites to create a new industry that is part of the solution to the challenges of the climate.”

The mountainous eastern shore of the Adriatic Sea and its hinterlands in Europe’s Balkan Peninsula have one of the world’s highest densities of countries: six, across a broad equilateral triangle of 212,000km². All six states – Albania, Bosnia & Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia – are historically characterised by political non-alignment, carrying over from the Cold War period, and all the more notable for the presence of the EU to the north (Croatia, Hungary and Romania) and east (Bulgaria and Greece).

A nine-plant, 9Mt/yr local cement sector serves the 16.8m-strong population of the unconsolidated ‘bloc.’ Albania has 2.8Mt/yr (31%), Serbia 2.7Mt/yr (30%), Bosnia & Herzegovina 1.6Mt/yr (18%), North Macedonia 1.4Mt/yr (15%) and Kosovo 500,000t/yr (6%), while Montenegro has no cement capacity – for now. Altogether, this gives this quarter of South East Europe a capacity per capita of 539kg/yr. The industry consists entirely of companies based outside of the region. Albania’s two plants are Lebanese and Greek-owned (by Seament Holding and Titan Cement Group respectively). Titan Cement Group also controls single-plant Kosovo and North Macedonia, and competes in the Serbian cement industry alongside larger and smaller plants belonging to Switzerland-based Holcim and Ireland-based CRH, respectively. Lastly, Bosnia & Herzegovina’s capacity is shared evenly between Germany-based Heidelberg Materials and Hungary-based Talentis International Construction, with one plant each.

Lafarge Srbija, Holcim's subsidiary in Serbia, announced plans for its second plant in the country, at Ratari in Belgrade, last week. No capacity has yet emerged, but the plant will cost €110m, making something in the region of the country’s existing 0.6 – 1.2Mt/yr plants seem likely. This would give Serbia over a third of total capacity in the Central Balkans and twice the number of plants of any other country there, expanding its per-capita capacity by 22 – 44%, from a regionally low 408kg/yr to 500 – 590kg/yr.

In announcing the upcoming Ratari cement plant, Lafarge Srbija laid emphasis on its sustainability. The plant will use 1Mt/yr of ash from the adjacent Nikola Tesla B thermal power plant as a raw material in its cement production. In this way, it will help to clear the Nikola Tesla B plant’s 1600 hectare ash dumps, from which only 180,000t of ash was harvested in 2023. Circularity has been front and centre of Holcim’s discussions of its growth in Serbia for some time. When Lafarge Srbija acquired aggregates producer Teko Mining Serbia in 2022, the group indicated that the business would play a part in its development of construction and demolition materials (CDM)-based cement and concrete.

Holcim’s Strategy 2025 growth plan entails bolt-on acquisitions in ‘mature markets,’ backed by strategic divestments elsewhere. Other companies have been more explicit about a realignment towards metropolitan markets, above all in North America, at a time when they are also diversifying away from cement and into other materials. Just why a leading producer should look to build cement capacity in Serbia warrants investigation.

Serbia is the only Central Balkan member of Cembureau, the European cement association. In a European market report for 2022, the association attributed to it the continent’s fastest declining cement consumption (jointly with Slovakia), down by 11% year-on-year. Like the rest of Europe, Serbia is also gradually shrinking, its population dwindling by 0.7% year-on-year to 6.62m in 2023, which limits hopes for a longer-term recovery. Serbia remains the largest country in the Central Balkans, with 39% of the total regional population.

Several factors have compounded Serbia’s difficulties as a cement-producing country. Firstly, like the Nikola Tesla B thermal power plant, its kilns run on coal. 50% of this coal originated in Russia and Ukraine in 2021, causing the entire operation to become ‘imperilled’ after the former’s brutal invasion of the latter in February 2022, according to the Serbian Cement Industry Association. In planning terms, this was a case of putting half one’s eggs in two baskets – and dropping them both.

Secondly, Serbia’s choice of export markets is mainly confined to either the EU or global markets via the River Danube, Black Sea and Mediterranean. Either way, it is in competition with a cement exporting giant: Türkiye. Serbia sold €19.7m-worth of cement in the EU in 2023, up by 63% over the three-year period since 2020 – 31% behind Türkiye’s €28.8m (more than double its 2020 figure).¹ One other Central Balkan country had a greater reliance on the EU market: Bosnia & Herzegovina. It exported €48.4m-worth of cement there, quadruple its 2020 figure and behind only China (€133m) and the UK (€54.7) in cement exports to the bloc by value.

Bosnia & Herzegovina’s cement industry underwent a different permutation at the start of 2024: an acquisition, replacing one EU-based player with another. Lukavac Cement, which operates the 800,000t/yr Lukavac cement plant in Tuzla, changed hands from Austria-based building materials producer Asamer Baustoffe to Hungary-based property developer Talentis International Construction. Talentis International Construction belongs to one of Hungary’s major family-owned conglomerates, Mészáros Csoport.

Besides Central Europe, Balkan countries have found a ready source of investments in the past decade in China. In construction alone, Chinese investments total €13.2bn in Serbia, €2.4bn in Bosnia & Herzegovina, €915m in Montenegro and €650m in North Macedonia.² This can be a booster shot to all-important domestic cement markets, but has some risks. Montenegro previously faced bankruptcy after Export-Import Bank of China began to call in an €847m loan for construction of the still upcoming A1 motorway in the country’s Northern Region. This did not put off the Montenegrin government from signing a new memorandum of understanding (MoU) with China-based Shandong Foreign Economic and Technical Cooperation and Shandong Luqiao Group for construction of a new €54m coast road in the Coastal Region in mid-2023.

In Montenegro, UK-based private equity firm Chayton Capital is currently funding a feasibility study for a partly state-owned cement plant and building materials complex at the Pljevlja energy hub in the Northern Region. Along with an upgrade to the existing Pljevlja coal-fired power plant, the project will cost €700m.

In 2026, EU member states will begin to partly tax third-country imports of cement and other products against their specific CO₂ emissions, progressing to the implementation of a 100% Carbon Border Adjustment Mechanism (CBAM) by 2034. Montenegro led the Central Balkans’ preparations for the EU’s CBAM roll-out with the introduction of its own emissions trading system in early 2021. Bosnia & Herzegovina will follow its example by 2026, but other countries in the region have struggled to conceive of the arrangement except as part of future EU accession agreements.

Based on the average specific CO₂ emissions of cement produced in the EU, the World Bank has forecast that exporters to the bloc will be disadvantaged if their own specific emissions exceed 5.52kg CO₂eq/€.³ By contrast, any figure below this ought to offer an increased competitive edge. Albanian cement has average emissions of 4.71kg CO₂eq/€, 15% below ‘biting point’ and 13% below Türkiye’s 5.39CO₂eq/€. Albania’s government consolidated its anticipated gains by quintupling the coal tax for 2024 to €0.15/kg. The figure is based on the International Monetary Fund’s recommended minimum CO₂ emissions tax of €55.80/t, 21% shy of the current EU Emissions Trading Scheme (ETS) credit price of €70.49/t.⁴

The Central Balkans is a region of apparently slow markets and industry growth regardless – to 11 cement plants, following the completion of current and upcoming projects. A recurrent theme of capital expenditure investments and the way investors talk about them may help to explain this: sustainability. Looking at the mix of technologies in the current nine plants, these include wet kilns and fuels lines built for conventional fossil fuels. This is not to presume that any given plant might not be happy with its existing equipment as is. Nonetheless, the overall picture is of a set of veteran plants with scope to benefit from the kind of investments which all four global cement producers active in the region are already carrying out elsewhere in Europe. Such plans may already be in motion. In late 2023, Titan Cement Group’s North Macedonian subsidiary Cementarnica Usje secured shareholder approval to take two new loans of up to €27m combined.

As the latest news from Serbia showed, taking care of existing plants does not preclude also building new ones. The cement industry of the Central Balkans is finding its position in the new reduced-CO₂ global cement trade – one in which old and new work together.

References

1. Trend Economy, ‘European Union – Imports and Exports – Articles of cement,’ 28 January 2024, https://trendeconomy.com/data/h2/EuropeanUnion/6810#

2. American Enterprise Institute, 'China Global Investment Tracker,' 3 February 2024 https://www.aei.org/china-global-investment-tracker/

3. World Bank Group, ‘Relative CBAM Exposure Index,’ 15 June 2023, https://www.worldbank.org/en/data/interactive/2023/06/15/relative-cbam-exposure-index

4. Ember, 'Carbon Price Tracker,' 26 August 2024, https://ember-climate.org/data/data-tools/carbon-price-viewer/

US: Gabriel Carrero has taken on the role of Chief Commercial Officer (COO) at Carbon Limit, developer of the CO₂-sequestering concrete additive CaptureCrete. Carrero previously served as Senior Vice President, Sales & Marketing at fellow additive developer CarbonCure, and has held directorial roles in multiple companies in the cement and concrete chemicals innovation space, including working as COO of Sysdyne Technologies and NITROcrete and as Global Director, Specialty Construction Chemicals at GCP Applied Technologies. Carrero holds a Mechanical Engineering degree from the Centre Technological University (UNITEC) and an MBA from the University of Carabobo, both in Venezuela.

India: UltraTech Cement has obtained a $500m sustainability-linked loan from Sumitomo Mitsui Banking Corporation, State Bank of India, BNP Paribas and other lenders. Capital Market News has reported that the conditions for the loan align with UltraTech's 2050 Net-Zero Roadmap. Under the roadmap, the subsidiary of Aditya Birla Group aims to reduce its Scope 1 CO₂ emissions per tonne of cementitious material by 27% between 2017 and 2032, and to raise its reliance on renewables to 85% of its energy consumption by 2030.

UltraTech Cement previously issued sustainability-linked bonds in 2021.

Heidelberg Materials inaugurated a plant near Katowice in Poland this week for separating and sorting demolition concrete. This gives us the chance to catch up with the state of construction and demolition waste (CDW) for the cement and concrete sectors and consider the differences between the strategies of the multinational heavy building materials companies in Europe and the US.

The new CDW recycling unit has a capacity of up to 100t/hr. Heidelberg Materials says that it is the “first company in the industry to introduce high-quality, selective concrete separation at this scale.” The company is using its proprietary ReConcrete process to sort out fractions from the CDW including sand, gravel and, finest of all, recycled concrete paste (RCP). That last one is particularly valuable because it can either be used as an alternative raw material for clinker production by replacing limestone or as a secondary cementitious material. Heidelberg Materials is also promoting the potential use of RCP as a carbon sink over the lifetime of a concrete structure via ‘enforced carbonation.’ The RCP is exposed to raw exhaust gases from cement production allowing it to both mineralise CO₂ and act as a clinker substitute. To further explore this option Heidelberg Materials is building an industrial pilot at its Górażdże plant to test the concept with construction expected by the end of 2024.

Both Holcim and Heidelberg Materials have been visibly busy buying up more aggregate recycling companies over the last nine months since Global Cement Weekly last reported on CDW. Holcim acquired Germany-based Mendiger Basalt in January 2024, Switzerland-based Cand-Landi Group and UK-based Land Recovery in June 2024, and Belgium-based Mark Desmedt in July 2024. It also said at the start of the year that it aimed to conclude 15 - 20 new acquisitions in 2024 with a focus on CDW companies in Belgium, France, Germany and the UK. Heidelberg Materials bought UK-based B&A Group in May 2024 and US-based Highway Materials and Aaron Materials in July 2024. Holcim has set itself a target of recycling 12Mt/yr of CDW by 2030 by using its ECOCycle technology. It reported 8.4Mt/yr in 2023 and hopes to reach 10Mt/yr in 2024.

Some of the recycling companies mentioned above are based in the US but the pace of CDW acquisitions have generally been faster in Europe. In the US, meanwhile, the heavy building materials producers have tended to buy more general aggregates companies. Heidelberg Materials announced on 30 July 2024 that it was buying Albany-based Carver Sand & Gravel. This followed the companies mentioned above and Texas-based Victory Rock, also in July 2024. Holcim said in its first half-year results for 2024 that it had ‘executed’ a bolt-on acquisition in the US that would strengthen its aggregate and ready-mixed concrete business. Cemex also revealed a joint-venture agreement with sand and gravel supplier Couch Aggregates and marine bulk product distributor Premier Holdings in July 2024. It said that the move was part of its “ongoing strategy to accelerate growth in the US and expand its aggregates business.” A big recent deal in the sector was the merger of the US-based operations of Summit Materials and Cementos Argos that completed in January 2024. Although at the time we concentrated on the cement-side of the transaction, it also gave the organisation just under 5Bnt of aggregate reserves.

It may be a stretch to call what’s going on here a trend. Yet the large heavy building materials companies do appear to be acting differently in the US and Europe with regards to aggregate companies and CDW recyclers. The main drivers here are the strength of the US market and the stricter environmental legislation in Europe. Higher population density in Europe compared to the US may also be playing a part in the differences in speed of adoption between the two markets. The ongoing Holcim spinoff demonstrates the differences between the two market regions in bold terms. In short, the company has decided to split itself in two in order to meet the different needs of each market. As for CDW, the trickle of acquisitions keep coming and momentum is steadily building.

UK: Aggregate Industries has appointed Tom Murphy as Carbon Capture Utilisation and Storage (CCUS) Project Manager at the Cauldon Cement Plant in Staffordshire. He will play a leading role in managing the introduction of a carbon capture unit at the site.

Murphy joins the subsidiary of Holcim from Tata Chemical Europe where he was the Plant Manager for a first-of-a-kind post combustion carbon capture plant. Prior to that, he worked as an Energy Chemical Engineer for Tata and as a Research Engineer for the Materials Processing Institute. He holds an undergraduate degree in chemical engineering from the University of Manchester.

The CCUS project at the Cauldon Cement Plant is part of the wider Peak Cluster partnership, which was formed by cement and lime producers around the Derbyshire Peak District region and aims to cut collective annual carbon emissions by 3Mt/yr by 2030. More than 0.6t/yr is targeted to be cut at Cauldon. The project is being led by Progressive Energy. It aims to capture and transport CO₂ emissions from Cauldon and other partner plants before sequestering them beneath the eastern Irish Sea in one of the storage options which the project has access to, including the Liverpool Bay CCS or the Morecambe Net Zero project.

China: China Energy Engineering (CEEC) has announced the completion of reliability testing for ‘CarbonBox’, Asia's ‘largest direct air capture device by capacity’, according to the company. Developed jointly by a CEEC subsidiary and Shanghai Jiao Tong University, CarbonBox can reportedly capture over 600t/yr of CO₂. This technology will help to contribute to the production of green methanol and aviation fuel. The device aims to reduce the traditionally high energy consumption and costs associated with direct air capture devices.

A recent report by the Administrative Centre for China’s Agenda 21 and two other institutes revealed that China is advancing in CCUS deployment, with nearly 100 planned and operational projects.

Türkiye: Limak Çimento has received its inaugural delivery of green hydrogen from France-based Air Liquide at its Ankara cement plant. The partners say that the technology will reduce the plant’s CO₂ emissions by 180,000t/yr. ESMERK News has reported that the companies plan to commence a strategic collaboration for the development of green hydrogen ecosystems for the cement industry. Limak plans to implement net zero fuels in the kilns of all seven of its plants between 2035.

India: Shree Cement says that it has reached 1GW captive power capacity across its plants, after commissioning a new 19.5MW solar power plant at a facility in Andhra Pradesh. Renewables account for 499MW (50%) of the total. Shree Cement says that its investments in renewables to date total US$479m. NBM & CW News has reported that the company has current planned new investments worth US$120m in renewables. This will cover 132MW-worth of solar, 36MW of wind and 34MW of waste heat recovery power capacity.

Switzerland: Holcim has acquired recycling, ready-mix concrete and aggregates company Cand-Landi Group. The company employs 250 people across its operations in Western Switzerland. Holcim plans for Cand-Landi Group to supply alternative raw materials and fuels for use at its Eclépens plant. It says that the acquisition will increase its recycling capacity of construction and demolition materials by 100,000t/yr.

Holcim CEO Miljan Gutovic said "The acquisition of the Cand-Landi Group will advance decarbonisation and circularity in Switzerland, a lighthouse market for innovation at Holcim. I look forward to welcoming all 250 employees of the Cand-Landi Group and investing in our next chapter of growth together."