Displaying items by tag: European Commission

Çimsa and its parent company Sabancı Holding renewed their ambition to become a global leader in the global white cement market this week with the formation of Cimsa Sabanci Cement. The new subsidiary brings together most of Çimsa’s international white cement companies including Cimsa Americas Cement Manufacturing and Sales Corporation in the US, Cimsa Cement Sales North in Germany, Cimsa Cementos Espana in Spain and Cimsa Adriatico in Italy. Notably, the new entity does not include businesses in Romania and Russia or at home in Turkey. The move coincides with regulatory approval from the Comisión Nacional de los Mercados y la Competencia (CNMC) for Çimsa’s purchase of Cemex’s white cement business in Spain, including its integrated Buñol white cement plant, for around US$180m, which was first announced in March 2019.

The acquisition in Spain came with conditions though since Çimsa has now become the market leader in both bagged and bulk white cement locally, with a combined share of over 50% in the case of bulk white cement. Firstly, Çimsa has agreed to give Cementos Molins the rights to use its silo in Alicante along with a customer list over the last three years. Secondly, it has agreed to supply all its customers previously supplied from a silo in Seville from one in Motril instead for two years. The Motril terminal was purchased from Cemex. The idea here is to give Cementos Molins time to establish itself in the new market and for customers in the south of Spain to find alternative white cement suppliers if they want to. The latter condition was enough for the CNMC to approve the Cemex purchase in Spain. It was proposed on 24 September 2020 and then approved by the end of the month.

The wider picture is that Çimsa has been playing up its ambitions in white cement for a while now. At the time that the acquisition in Spain was announced, Tamer Saka, the president of Sabancı Holding Cement Group and chairman of Çimsa said, “With the integration of the Buñol white cement plant to our production and distribution networks, we will increase our white cement production capacity by 40%, translating into Çimsa becoming the world's largest white cement company.” This compares to Cementir’s self-declared world share of around 27% white cement production capacity, through its Aalborg White brand and others. Other recent developments at Çimsa include the commissioning of a 0.35Mt/yr white cement grinding plant in Houston, Texas by Cimsa Americas Cement Manufacturing and Sales Corporation in July 2019 with commercial sales starting later that year.

Back home in Turkey the domestic grey cement industry has faced difficulties in the last few years as the economy suffered, the capacity utilisation rate fell, competition increased in export markets and then coronavirus-related lockdowns caused further stress this year. By contrast the world white cement market has remained quite buoyant over the last decade, rising by around 7% year-on-year to 21Mt in 2018 and then remaining at a similar level in 2019.

HeidelbergCement memorably described white cement as a “niche product” when it left the scene in 2018 by selling its remaining shares in Lehigh White Cement in the US to Cementir. It has faced problems of its own this week with the decision by the European General Court (EGC) to uphold the European Commission’s (EC) previous ruling in 2017 to block a proposed takeover of Cemex Croatia by HeidelbergCement and Schwenk Zement. Funnily enough, that acquisition also revolved around a cement terminal. In this case the EC didn’t think that the offer by the potential buyers to grant access to a cement terminal in Metković in southern Croatia would be enough to assuage concerns about reduced competition following the transaction. Some you win, some you lose.

Croatia: A European Union (EU) court has ruled in favour of the European Commission’s antitrust veto of Germany-based HeidelbergCement and Schwenk Zement’s 2017 acquisition agreement with Mexico-based Cemex for acquisition of its subsidiary Cemex Croatia. The court said that the deal was anti-competitive in that it had the potential to push up cement prices in Croatia, in spite of HeidlebergCement and Schwenk Zement’s offer to grant other cement suppliers access to a terminal.

Europe: Cembureau, the European Cement Association, has announced that its ‘Cementing Europe’s Future: Building the Green Deal’ webinar will take place on 13 October 2020. The programme includes keynote speeches from association president Raoul de Parisot and German Minister of Environment, Nature Conservation and Nuclear Safety Jochen Flasbarth. Additionally, members of the European Parliament and representatives of the European Commission, LafargeHolcim, HeidelbergCement and several other companies involved in the European cement industry will speak.

The headline from the cement section of FLSmidth’s first quarter results summed up what may be the current situation for many companies supplying the sector: “service relatively stable – cautious on capex.” The general picture across both its mining and cement businesses was ‘significantly’ increased demand for local resources, remote support and digital products. On the mining side FLSmidth pointed out that it was impossible to assess the impact of coronavirus on its business because of the difference between government policies. Some places continue lockdowns or impose additional restrictions but others are starting to ease them. This point has ramifications for multinational cement producers and other suppliers too. It seems likely to continue during the coming months as lockdowns ease at different rates in different countries.

On cement specifically, FLSmidth provided a good global view of what the pandemic and government responses are actually doing to the industry. It reports that around 80% of the world's cement plants (excluding China) are currently in operation with some operating at reduced capacity. It described the market for services as ‘relatively stable’ in the first quarter but that cement consumption was being reduced by lower construction activity, plant shutdowns and restricted access to sites leading to reduced demand for technical services and commissioning. By region it identified the biggest impact to its business from coronavirus in India and the Middle East. Generally, it says that cement producers are suspending capital investments until the impact of coronavirus on economies is clearer. There has been some good news though, with the supplier noting that several of its customers have been looking for services that can reduce their operational costs.

The European Commission tackled this pervading sense of uncertainty in its roadmap towards lifting coronavirus containment measures that was published on 15 April 2020. The Committee for European Construction Equipment (CECE) was keen to share this with its members this week, pointing out how the European Union (EU) plans to lift border controls and re-start economic activity.

The plan is to ease travel restrictions between border regions for cross-border and seasonal workers, and then between European areas with low coronavirus infection rates. External borders can later be reopened with access by non-EU residents to the EU scheduled for a second stage. To re-start economic activity the EU recommends, again, a phased approach focusing on sectors that are ‘essential’ to facilitate economic activity such as transport. The commission says it will also create a rapid alert function to identify supply and value chain disruptions, relying on existing networks such as Enterprise Europe Network (EEN), clusters, chambers of commerce and trade associations, small and medium enterprise (SME) envoys and more. Whether the EU can actually coordinate a return to normality following its poor response in aiding Italy at the start of the European outbreak of coronavirus remains to be seen. Yet, its historical roots as an economic community dating back to the Treaty of Rome in 1957 suggests it may be more successful when coordinating technical aspects of trade.

Detailed above are the views and plans of just one supplier and one continental organisation, although they are both prominent. The takeaway from this is that uncertainty is a major problem so far for the cement industry in the wake of the coronavirus outbreak. Companies have faced a cash crunch in the short term as economies slowed down and they are reluctant to release cash until the future becomes clearer. Large parts of the cement industry and its suppliers are very international, which exposes it to even more uncertainty. Different countries enforcing different restrictions and different easing strategies at different times create a major headache for everyone and a block to investment. Making cement is undeniably an essential industry and this realisation by legislators can be seen in some countries that at first shut down their plants before understanding that they needed them open after all! Suppliers should benefit from this too, although at reduced activity levels. We don’t know what kind of recovery will come – hopefully one releasing plenty of pent up demand. Yet one thing is certain. The work of the regional cement associations and those representing suppliers is going to be crucial in the coming months.

EU: The European Council and European Commission have published their joint coronavirus exit strategy, entitled ‘European Roadmap Towards Lifting COVID-19 Containment Measures.’ It advises EU member states on a course of action aimed at restoring community life and the economy, while also preserving public health, after the coronavirus outbreak.

The roadmap consists of a progressive lifting of travel restrictions, initially between border regions, then between regions less affected by the outbreak and subsequently across internal and external borders of the EU. The strategy applies a similar approach to restarting the economy, beginning with ‘essential sectors’ such as construction. The Commission will maintain a rapid alert system for supply chain disruptions, with the help of existing networks such as the Enterprise Europe Network (EEN), Clusters, Chambers of Commerce and trade associations.

EU: Cembureau has welcomed the European Commission (EC)’s proposal for consultations on setting up a carbon border adjustment mechanism (CBAM) for imported goods including cement, and set out a number of ‘design principles’ that it says ‘should apply’. According to Cembureau, a CBAM ought to be: complementary to EU emissions trading scheme (ETS) free allowances (in the initial phase) and World Trade Organisation (WTO) compatible, based on importers’ verified emissions, including indirect emissions, applicable to all ETS sectors and capable of providing a CO2 charge exemption for EU exporters.

The EC has said that it will present a final proposal for a CBAM by mid-2021.

EU: Cembureau has responded to the European standardisation organisation Cenelec’s CEN/TC 350 ‘sustainability of construction works’ rules by amending its European Environmental Product Declarations (EPDs) for CEM I, CEM II and CEM III, corresponding to Portland cement, Portland-composite cement and blast furnace cement respectively. It says the update brings the three main cement types into ‘full alignment with the EU Commission strategy for a sustainable built environment.’

There was fantastic news for fans of novel cements this week, when Cementos Argos announced the completion of work on a new 0.45Mt/yr calcined clay production line at its Rio Claro plant in Colombia. This artificial pozzolanic material, developed and promoted by the Swiss-led LC3 consortium in recent years, can dramatically lower cement CO₂ emissions by replacing slag and/or fly ash in cement mixes. The Rio Claro plant is the first major cement plant to install such a line following smaller trials in Switzerland, India and Cuba.

Suitable clays are more widely available than slag and fly ash, alleviating some of the difficulty and cost of obtaining supplementary cementitious materials. They also need to be calcined at just 800°C, offering massive savings in terms of fuel costs, CO₂ emissions and embodied energy compared to Ordinary Portland Cement (OPC) production. Karen Scrivener from the École Polytechnique Fédérale de Lausanne (EPFL), the leading academic party in the LC3 consortium, explained that calcined clays are at their best when in ternary (three-way) blends alongside clinker and limestone in the September 2019 issue of Global Cement Magazine. “It has long been known that calcined clays can be pozzolanic,” she explained. “When used alone, the maximum substitution level is around 30%, which gives a moderate saving in CO₂ emissions. However, if we substitute a further 15% of the clinker with limestone, we get a significant reduction in CO₂ emissions, with a product that has almost identical properties to the blend that contains just the calcined clay.”

While the exact composition of Rio Claro’s new products is unclear, it will enable Cementos Argos to produce ternary cement blends with CO₂ emissions 38% lower than OPC. Energy consumption is also cut by 30%, which provides secondary benefits in terms of reduced off-site CO₂ emissions. At the plant’s launch, Cementos Argos’ President Juan Esteban Calle clearly stated that calcined clays were the way forward, announcing, “With this project we are sowing the seeds of the Argos of the future. It starts today with a new production line at Rio Claro. In our commitment to climate change, this project makes us very proud.”

The response from Argos’ consumers will be keenly watched, especially in Europe. Just this week LafargeHolcim and Vicat, along with France’s Technical Association of the Hydraulic Binders Industry (ATILH), called on the European Commission and European Committee for Standardisation to hurry up and publish ternary cement standards across the European Union (EU). At the moment these producers are primarily concerned with CEMII / C-M and CEM VI cements. These classes of cement comprise a range of ternary blends that contain clinker and limestone, plus a third component, be it slag, fly ash, natural pozzolans or calcined clay. They claim that placing low-clinker cements on the market could reduce the amount of CO₂ emitted by 127kg/t, around 20% of the 656kg/t average in Europe at present.

Frustrated with the delays at Commission level, cement producers have now taken things into their own hands. The plan is to establish the same standard within each EU Member State at the national level, rather than waiting in vain for standards from ‘on high.’ One pressing driver for this behaviour is the rapid approach of the Phase 4 of the EU Emissions Trading Scheme (ETS) in January 2021. In Phase 4 it is likely that EU cement producers will be allocated only 80% of the free allowances they have become accustomed to. They will have to buy the remainder at market prices, currently Euro25.1/t of CO₂ (17 February 2020). This will represent a massive new expense for some producers. The opportunity to sell cement that emits only 58% of the CO₂ of OPC is clearly exceedingly attractive as a way to reduce outgoings. CO₂ emissions will be reduced, of course but, as usual, the way to make companies do things is to hit them in the wallet.

Indeed, on this point, Vicat seemed to almost goad or ‘troll’ its competitors in Europe this week by announcing that it has never sold any EU ETS allowances and is sitting atop a 5Mt CO₂ reserve worth Euro120m. This is sufficient to last it until 2030 at current prices. The key part of that last sentence is ‘current prices,’ which are subject to change. In its press release, Vicat was keen to point out that it is not resting on its laurels, highlighted by its advocacy for ternary blends and continued development of alternative fuels. This may be wise, considering that EU ETS allowances will likely cost more once Phase 4 kicks in.

With clinker factors of just 50 - 65% for CEMII / C-M, and 35 - 50% for CEM VI, Edelio Bermejo, director of research and development (R&D) at LafargeHolcim insists, "These cements are no longer at the research and development stage. They have been widely validated and we are ready to produce them, especially as their manufacture does not require modification of our facilities." The establishment of Cementos Argos’ Rio Claro calcined clay plant proves his point. We can expect to hear a lot more about these blends in the coming months. In the words of Bermejo, “The future is here!”

If you needed a sign that the cement industry has become serious about carbon capture it was the presence of two organisations offering CO₂ transport and storage capacity in northern Europe at last week’s Innovation in Industrial Carbon Capture Conference 2020 (IICCC). Both Norway’s Northern Lights and the Rotterdam CCUS (Project Porthos) were busy at their stands during the event’s exhibition. Meanwhile, Cembureau, the European Cement Association, said that it will work on finding other potential storage sites for CO₂ and on identifying existing gas pipelines that could be converted. The industry is planning what to do about CO₂ transport and storage.

As with the previous IICCC event in 2018 the heart of the programme was the Low Emissions Intensity Lime And Cement (LEILAC) project. Since then Calix’s 60m tall pilot Direct Separation Calciner unit has been built at the HeidelbergCement cement plant in Lixhe and has been tested since mid-2019. Early results look promising, with CO₂ separation occurring, calcined material produced and the tube structure and mechanical expansion holding up. Problems with thermocouples failing, blockages and recarbonation at the base of the tube have been encountered but these are being tackled in the de-bottlenecking phase. Testing will continue well into 2020 and plans for the next demonstration project at another cement plant in Europe are already moving ahead. LEILAC 2 will see industry partners Cimpor, Lhoist, Port of Rotterdam and IKN join Calix, HeidelbergCement and other research partners to work together on a larger 0.1Mt/yr CO₂ separation pilot scheduled for completion in 2025.

Alongside this HeidelbergCement presented a convincing vision of a carbon neutral future for the cement industry at the IICCC 2020. It may not be what actually happens but the building materials producer has a clear plan across the lifecycle chain of cement. It is researching and testing a variety of methods to capture CO₂ process emissions, is looking at supply chains and storage sites for the CO₂ and is working on recycling concrete as aggregates and cementations material via recarbonation. In terms of carbon capture technology, an amine-based industrial scale CCS unit looks likely to be built at Norcem’s Brevik plant in the early 2020s. HeidelbergCement’s other joint-research projects – direct separation and oxyfuel – are further behind, at the pilot and pre-pilot stages respectively. Each technology looks set to offer progressively better and cheaper CO₂ capture as they come on line.

Or put another way, cement companies in Europe could build industrial scale amine-based carbon (CC) capture plants now. Yet the game appears to be to wait until the cost of CCS falls through new technology versus the rising emissions trading scheme (ETS) price of CO₂. CC is expected to become economically feasible in a decade’s time, sometime in the 2030s. At which point there might be an upgrade boom as plants are retrofitted with CC units or new production lines are commissioned. Other ways of reducing the cement industry’s CO₂ emissions, of course, are being explored by other companies such as further reducing the clinker factor through the use of calcined clays (LC3 and others), solar reactor or electric-powered kilns and more.

The usual problem of how the construction industry can cope with a higher cost of cement was acknowledged at IICCC 2020 but it is largely being worked around. Higher priced cement poses competitive issues for specifiers and construction companies but it is widely expected to result in price rises below 5% for most residential end users. In the short-term government policy such as requiring low carbon cement in state building projects could stimulate the market. The start of this process can be seen already with the use of slag cements in various infrastructure projects.

Hans Bergman, Head Unit ETS Policy Development at the Directorate-General for Climate Action (DG Clima) partly addressed the cost issue by talking about the EU Green Deal. The EU wants to meet its new targets but it also wants to let gross domestic product (GDP) rise whilst greenhouse emissions fall. The EU ETS is its principle vehicle for this but the commission is wary of changes, such as making modifications linked to CCS, in case it undermines the system. Discussions are ongoing as the work on the Green Deal continues.

IICCC was a wider forum beyond just what LEILAC is up to. To this extent the CC projects involve multiple partners, including those from other cement companies like Cemex and Tarmac (CRH) in LEILAC and Dyckerhoff (Buzzi Unicem), Schwenk Zement and Vicat in the oxyfuel project. The decarbonisation fair included representatives from Vicat’s FastCarb project and Polimi’s Cleanker. Speakers from the European Climate Foundation, Acatech, INEA, TCM, SINTEF and Lhoist were also present.

During one speaker discussion Calix was described as the 'Tesla' of industrial CC by one speaker, who said that, “…there is a genuine competitive opportunity for those bold enough to grasp it.” Calix’s managing director Phil Hodgson enjoyed the accolade but the point was that leading innovation or setting the agenda offers advantages. In the case of industrial CC for the cement industry, change feels a step closer.

The visible lobbying work by Cembureau, the European cement association, has been building in recent months as it has started to tackle the European Green Deal. Last week’s move was its aim to align with the objectives of the new legislation. To this end it plans to review the targets from its 2050 Low Carbon Roadmap (2013/2018) to fit with what the European Commission’s (EC) policy initiatives are aiming to do. It intends to publish the new roadmap in the spring of 2020.

The immediate problem for the European cement industry is that the EC wants to pick up the pace. Before the Paris agreement in 2016 it was aiming for a 40% reduction in greenhouse gas emissions by 2030 compared to 1990 levels. The overall target, remember, was an 80% reduction in emissions by 2050. However, the wording from the EC to the European Parliament about the Green Deal in December 2019 is now targeting carbon neutrality and the 2030 target has increased to ‘at least 50%’ and toward 55% in a ‘responsible way.’

To give readers an idea of the uphill battle facing the cement industry. Cembureau said it was on target in 2015 with a 14% reduction in emissions per tonne of cement produced from direct, indirect and transport sources. For comparison, gross CO₂ emissions Cement Sustainability Initiative (CSI) data from the Global Cement & Concrete Association (GCCA) shows a 29% drop from 1990 to 2017 from Cembureau members. The EC now wants to make it even harder to meet the 2030 target.

The cement industry’s problem is that it is energy intensive and that making clinker releases CO₂ (process emissions) as limestone is calcined. Cembureau’s roadmap offered multiple paths to its end goal including resource efficiency, energy efficiency, carbon sequestration and reuse, product efficiency. However, most of these things - like lower clinker factors, production efficiency use of alternative fuels, better transport efficiency and so on - only reach a reduction of a little below 35%. We should note here that great work has been achieved in all of these with Europe leading the way for many. The other 45% was intended to come from breakthrough technologies such as carbon capture and usage (CCU) and/or storage (CCS). Again, Europe has been leading the way worldwide with its various research and pilot projects. Yet, given that there are no commercial-level carbon capture installations at any cement plants in Europe in 2020, the EC is potentially cutting off the industry’s escape route to meet the 2030 deadline.

The EC gives the impression that it knows that energy intensive industries need help meeting the targets with the publication of its masterplan for energy-intensive Industries in November 2019. CCS, CCU, biomass, alternative binders to make cement, more efficient use of cement in concrete and the use of alternative fuels were all listed as being of in use of high potential to the sector. These are similar to Cembureau’s five paths on its roadmap. Incidentally, more recently Cembureau has been promoting its so-called 5C approach: clinker, cement, concrete, construction & built environment, and (re)carbonation. This is intended to initiate a wider debate across the construction industry supply chain along similar lines to the objectives in the roadmap. It also follows the general industry pivot towards concrete.

However, just one badly-considered measure from the legislators could scupper this. The new tax on refuse-derived fuel (RDF) imports in the Netherlands is one example of this. It potentially complicates alternative fuels markets in Europe. Another, more subtle risk that Cembureau warned of in December 2019, was of the EC’s intent to propose a carbon border adjustment mechanism to reduce the risk of carbon leakage. Its argument was that a new untested scheme could create uncertainty in an industry already at risk being replaced by production capacity outside of the EU.

So now we wait to see how many more reductions Cembureau can squeeze out of its revised roadmap in the spring. It may be able to gain more from its existing measures or offset emissions more widely along the construction chain. Whether it does or does not though the bulk of emissions reduction needs to come from the continued research, testing and implementation of novel technologies like CCU/S. CCS also needs help setting up the infrastructure to move CO₂ to the storage sites. To this end the EU heavy industry expert group says that developing large-scale pilot projects on ‘clean’ technologies should be supported with EU funds and by easier access to private financing. The ongoing question is how and when can this funding be unlocked? The answer is far from clear.