
Displaying items by tag: CO2
Cemex to close two cement plants in Spain
17 October 2018Spain: Cemex España is preparing to close its cement plants at Gádor in Almería and Lloseta in Baleares. It has blamed reduced demand for cement and European regulations on CO2 emissions for the decision, according to the Cinco Días newspaper. The closures will affect 200 employees and the cement producer is has started to hold union discussions. Cemex will retain integrated plants at Morata de Jalón, Alicante, Alcanar, Castillejo Anover and Buñol.
Riding the IPCC rollercoaster
10 October 2018One graph the United Nations’ (UN) Intergovernmental Panel on Climate Change (IPCC) report on Global Warming of 1.5°C didn’t include this week was what happens if the world just doesn’t bother. It’s probably just as well since warming of 1.5°C is likely to happen between 2030 and 2052 at the current rate of climate mitigation efforts. If they had included such as diagram, it likely would have had a ominous red line hurtling skywards like a rollercoaster track just before the screams start.
The giant paper study is really about comparing and contrasting the different impacts and responses to a 1.5°C and a 2°C rise. One taste of what the higher rise threatens is, “limiting global warming to 1.5°C instead of 2°C could result in around 420 million fewer people being frequently exposed to extreme heatwaves, and about 65 million fewer people being exposed to exceptional heatwaves."
The cement industry gets a look-in with an acknowledgment that the sector contributes a ‘small’ amount (5%) of total industrial CO2 emissions. It then breaks the entire industrial sector’s mitigation strategies down to (a) reductions in the demand, (b) energy efficiency, (c) increased electrification of energy demand, (d) reducing the carbon content of non-electric fuels and (e) deploying innovative processes and application of carbon capture and storage (CCS).
Speaking generally, phasing out coal, electrification and saving energy in mechanisms like waste heat recovery is predicted to get industry only so far. Yet from here even skirting over 1.5°C but below 2°C is ‘difficult to achieve’ without the, “major deployment of new sustainability-oriented low-carbon industrial processes.” Such new process include full oxy-fuelling kilns for clinker production, which have not been tested at the industrial scale yet. Likewise, CCS is seen as a major part of keeping warming below 2°C with a target of 3 Gt CO2/yr by 2050. Some reality is present though when the report says that the development of such projects has been slow, since only two large-scale industrial CCS projects outside of oil and gas processing are in operation and that cost is high. It even posits a value of up to US$188t/CO2 (!) for the cost of CO2 avoided from a Global CCS Institute report.
None of this is new to cement producers. The real debate is how to get there without wiping out the industry. In his address to the recent VDZ conference, Christian Knell, the president of the German Cement Works Association (VDZ), highlighted that meeting climate change goals was leading to ‘considerable’ costs for the cement industry. He then called for policy-related support to on-going research projects into CO2 mitigation technology.
The bit that the IPCC doesn’t go into is how much those five steps to the industrial sector will cost cement producers and, vitally, who will pay for it. For example, taking a cement plant’s co-processing rate to 70% and building a waste-heat recovery system, might cost around US$30m. The Low Emissions Intensity Lime And Cement (LEILAC) Consortium’s Calix’s direct CO2 separation process pilot at the Lixhe cement plant in Belgium has funding of about Euro20m. Rolling all three of these measures out to the world’s 2300 cement plants would cost over US$100bn and it would take more than a decade. Beware, the financial figures here are rough estimates and may be way out. The point remains that the implementation costs will not be trivial.
Industry advocates have started in recent years to push back against the climate lobby by highlighting the essential nature of concrete to the modern world. The IPCC barely mentioned this aspect of cement’s contribution to society suggesting recycling, using more renewable materials, like wood, and resorting to the mitigation strategies detailed above. Building new cities out of wood is not inconceivable but CCS seems more likely to solve the climate problem at this stage. Manufacturing the cement that becomes concrete may create CO2 emissions but it has also built the modern world and raised living standards universally. No cement means no civilisation. There is, at present, no alternative.
Instead of leaving this discussion at an impasse, it is worth reflecting on the last week in the industry’s news. An Indian cement company is importing fly ash, several companies are opening or preparing cement grinding plants, a coal ash extraction pilot project is running, a waste heat recovery unit has opened at a plant in Turkey and a producer is getting ready to co-process tyres as a fuel in Oman. All of these stories are proof that change is happening. The trick for policymakers is to keep prodding the cement sector in this direction without disrupting the good things the industry does for people’s lives through sustainable housing and infrastructure.
The November 2018 issue of Global Cement Magazine will include an exclusive article by Mahendra Singhi, the CEO of Dalmia Cement, about his company’s CO2 mitigation efforts.
The 2nd FutureCem Conference on CO2 reduction strategies for the cement industry will take place in May 2019 in London, UK.
VDZ president Christian Knell warns of cost of climate change mitigation to cement industry
27 September 2018Germany: Christian Knell, the president of the German Cement Works Association (VDZ), has warned that meeting climate change goals was leading to ‘considerable’ costs for the cement industry. He said that ‘suitable boundary conditions would have to be created’ for climate change issues and noted that on-going trends in European emissions trading and the ‘rapidly’ increasing price of CO2 were leading to mounting costs. “To be able to realise our efforts in terms of climate protection and at the same time not lose competitiveness, we need research policy-related support for our investment in breakthrough technologies and the corresponding demonstration projects,” said Knell.
Knell made the comments during the opening ceremony of the 8th International VDZ Congress 2018 in Duesseldorf. He identified climate protection and digitalisation as key issues for the future of the industry.
Germany: Environmental data from the German Cement Works Association (VDZ) show that average nitrogen dioxide emissions (NO2) from cement production dropped below 300mg/Nm³ in 2017. The value has more than halved since 2000. Other data from the ‘Environmental Data of the German Cement Industry 2017’ report shows that fossil fuels usage by the cement industry fell to 35% in 2017 compared to 45.6% in 2008.
"By consistently promoting the development of clinker-efficient cements, German cement manufacturers are noticeably reducing the carbon footprint as compared to traditional Portland cements," said VDZ President Christian Knell.
Knell also warned that the costs of carbon capture technologies should not be allowed to jeopardise the competitiveness of domestic cement manufacturers and give rise to ‘undesirable’ carbon leakage effects. The industry is currently researching methods to further reduce CO2 emissions such as carbon capture, storage and utilisation techniques, but it is dependent on external financing.
18 German cement manufacturers with a total of 46 cement plants are members of the VDZ. The local industry employs around 8000 people.
Dalmia Cement sets carbon negative target of 2040
18 September 2018India: Mahendra Singhi, the group chief executive officer (CEO) of Dalmia Cement, says that the company aims to be carbon negative by 2040. Singhi made the announcement at the Global Climate Action Summit in San Francisco, US, according to the Indo-Asian News Service. The cement producer is planning to increase its low-carbon product portfolio and use more ‘green’ fuels and raw materials in all of its 14 plants in India.
Dalmia Cement is the first Indian cement company to join RE 100 and it is committed to a target of 100% renewable electricity use. Singhi said that the major challenge is to convert the climate risks into business opportunities while sustaining business growth for the benefit of present as well as future stakeholders. Singhi was previously the Indian co-chair of the Cement Sustainability Initiative (CSI).
Singhi said that Dalmia Group has been able to reduce carbon dioxide emissions to 526kg/t of cement on a group average and to 342kg/t in its eastern operations. According to the CDP (formerly Carbon Disclosure Project) cement sector report in April 2018, Dalmia Bharat achieved the first rank in CDP's low carbon transition league.
Canada: The government has made a proposed new carbon tax easier for large-scale industrial emitters such as cement and steel producers. Originally the new legislation proposed imposing a levy on around 30% of a company’s CO2 emissions from the start of 2018, according to the Globe and Mail newspaper. However, the revision has reduced the tax on so-called vulnerable industries with the cement and steel sectors only having to pay 10%. The levy will start at US$15/t in January 2018, rising to around US$40/t in 2022.
The decision to soften the carbon tax follows lobbying by the affected industries. The tax applies to provinces that do not have existing carbon emission controls, such as cap-and-trade schemes, that meets the central government’s standards. The provincial government of Ontario, which contains six of the country’s 17 integrated cement plants, recently decided to leave its own carbon pricing system. It will be subject to the new rules. Saskatchewan will also be affected.
Germany: HeidelbergCement has highlighted occupational safety and research into CO2 reduction as priorities in its sustainability report for 2017. It reduced its accident frequency rate for employees with at least one lost working day per 1,000,000 hours across cement, ready-mixed concrete and aggregates to 1.8 in 2017 from 2.2 in 2016.
“This represents a significant improvement. A large number of locations have now been accident-free for several years, while others have seen drastically reduced accident rates. Nevertheless, serious accidents still occurred in 2017. We will therefore further intensify our efforts to prevent accidents on a permanent basis,” said Bernd Scheifele, the chairman of HeidelbergCement.
The building materials producer has also singled out its commitment to reduce its specific CO2 emissions by 30% in 2030 compared with 1990. It plans to support this by continually increasing the proportion of alternative raw materials and fuels and, wherever possible, to make its production processes more efficient. In addition, HeidelbergCement has invested in research programmes on carbon capture and its utilisation as a raw material. In 2017, it spent Euro141m on research and technology, an increase of around Euro24m from 2016.
Following HeidelbergCement’s acquisition of Italcementi in 2016 its CO2 emissions have increased. Its specific net CO2 emissions (per tonne of cementitious material) rose by 1.9% year-on-year to 609kg Co2/t in 2017 from 598 kg Co2/t in 2016. Its overall proportion of alternative fuels has also decreased slightly dropping to 20.8% from 21.4%. However, its specific energy consumption for cement and clinker continued to fall in 2017.
UK: Hanson UK’s sustainability report for 2017 shows that its CO2 emissions per tonne of product have fallen by 7.2% to reach the lowest level for five years. However, the subsidiary of Germany’s HeidelbergCement may face issues meeting its target of a 10% reduction by 2020 from its 2010 figures as its CO2 emissions from production have rise by 5.7% since 2010.
Overall, the company described 2017 as a year of ‘solid’ progress. It passed its 2020 targets for reducing both mains water use and waste to landfill. The number of lost time injuries remained static at 21, but the frequency rate was down on the prior year and there was a three-month unbroken spell without a lost time injury. The building materials producer also launched HeidelbergCement’s Sustainability Commitments 2030, including a set of targets for the group to achieve by 2020.
Could cement fall victim to the carbon bubble?
06 June 2018CRH announced changes to its structure this week. The changes to its divisions follow the rapid growth of the company and may also anticipate the new cement assets it is about to take on-board once its acquisition of Ash Grove Cement completes in the US. Buried in one its regulatory filings covering the news were two graphs of changes in cement demand in the US and Europe through various financial depressions since the 1930s.
Graph 1: Changes in cement demand in US and Europe during financial depressions. Source: CRH with data from US Geological Survey, PCA, United Nations, Morgan Stanley etc.
The graphs serve their purpose for a public company as they show both markets in the current downturn starting to rise again. In other words it looks like the perfect time to invest in a building materials company! However, thinking more broadly the graphs give a timely reminder of how bad the last decade has been for the cement market, particularly in Europe. The period only really compares to the 1930s in decline and duration if the figures are accurate. It must be considered though that while the West has suffered, markets in the East, notably led by China and India, have boomed.
The financial crash in 2008 was precipitated by the US subprime mortgage market. Other potential market killers lie ahead no doubt. One such might be the so-called ‘Carbon Bubble.’ This idea has gained media traction this week with the publication of a paper in the Nature Climate Change journal examining the economic impact of decarbonisation, if or when it happens.
It’s not a new argument but it makes the assertion that as new technologies that replace fossil fuels start to influence the markets, traditional fuel producers like oil companies may face being stuck with ‘stranded’ assets as legislation toughens up and technology mounts. This in turn could cause a financial crash and it’s this aspect that the paper has looked at.
The ace in the hole from the Nature Climate Change paper is that the modelling here suggests a way out of the usual prisoner’s dilemma approach to climate change action. Once sufficiently-low carbon technologies hit a certain level of adoption, then any country holding out and using fossil fuels instead of taking of action may start to suffer economically. Or in other words cheating won’t pay.
The carbon bubble theory is pretty convenient for the climate change lobby as it gives it a financial reason to fight its enemies by targeting investors. One counter argument is realistically how fast and deep would the decarbonisation technologies actually have to be to cause significant financial disruption. Surely the oil producers would get out of risky assets before it was too late. Then again, maybe not.
The cement industry is in exactly the same situation as the oil producers as it too depends on carbon rich assets, in this case limestone, for its business to operate. If limestone assets become ‘stranded’ due to toughened legislation then how can production continue? In addition though, volatility in the fuels and secondary cementitious materials (SCM) markets already being observed from the cement industry may make one wonder about the existence of the carbon bubble. Markets for waste-derived fuels and granulated blast furnace slag are currently changing in the wake of the tightening of Chinese legislation both in and out of the country. In theory this could mean cheaper inputs for cement production but the market is hard to predict. The other classic recent example is how the US natural gas boom from fracking has reduced global oil prices with further effects on the coal and gas that cement producers use. This in turn has placed pressure on various countries that are reliant on their petrodollars and caused pain to their local cement industries, like Saudi Arabia for example. The price of Brent Crude may be rising at the moment but once it hits a certain threshold, the hydraulic fracking of gas wells in the US will resume pumping. Of course both waste inputs and fracking could just be attributable respectively to market distortions by a large country changing policy and a new technology finding its feet.
If the carbon bubble theory carries any weight then CRH’s cement demand graph during recessions may carry a warning to producers about what might happen if decarbonisation leaves the fossil fuel producers behind. With good timing for this theme South Korea’s Ssangyong Cement announced this week that it is close to completing a waste heat recovery (WHR) unit at its Donghae plant, one of the biggest in the world with seven production lines. The interesting detail here is that the WHR unit will work in conjunction with an energy storage system to form a microgrid. This kind of setup is well suited to using energy from renewables as well as from conventional sources like a national electricity grid. In other words, this is exactly the kind of development at a cement plant that might in a small way lessen its reliance on fossil fuels in the face of any potential supply issues.
Kunda Nordic Tsement to spend Euro2.2m on upgrades
05 June 2018Estonia: Kunda Nordic Tsement plans to spend Euro2.2m on upgrades to its operations. The investment will be used for emission improvements, updating its plant’s power distribution system, starting to use clinker dust in cement grinding and dredging the port of Kunda, according to the Virumaa Teataja newspaper.
The subsidiary of Germany’s HeidelbergCement increased its output of clinker and cement by 20% and 60% respectively in 2017. Its plant relaunched its second kiln in 2017 but this increased its CO2 emissions. It produced 1081kg of CO2 per ton of clinker compared to the European target of 766kg. The plant operates two wet process kilns but it plans to switch to a dry production process in the future as this would help it reduce its emissions.
HeidelbergCement holds a 75% stake in the company with the rest belonging to Ireland’s CRH.