
Displaying items by tag: GCW129
Lessons from the Europe ETS for the Chinese cement industry
04 December 2013In late November 2013 Guangdong province in China announced that it will be launching its carbon emissions trading scheme (ETS) in December 2013. Together with six other pilot projects in China the scheme will be the second largest carbon market in the world after the European Union (EU) when fully operational. Yet with the EU ETS floundering from excess carbon permits, with a resulting low price of permits and large cement producers such as a Lafarge reported as stockpiling permits, what are the Chinese schemes planning to do differently to avoid these pitfalls?
Overall, China has announced that it intends to cut its carbon dioxide emissions per unit of GDP by up to 45% by 2020 compared to 2005. In Guangdong, emissions from 202 companies will be capped at 350Mt for 2013, according to the local Development and Reform Commission. As shown in an article in the December 2013 issue of Global Cement Magazine, Guangdong province has a cement production capacity of 132.7Mt/yr, the second highest in the country after Anhui province.
From the perspective of the cement industry, Chunfang Wang from Huaxin Cement spoke about the importance of monitoring, reporting and verification (MRV) at an International Emissions Trading Association (IETA) workshop that took place in Guangzhou, Guangdong in early 2013. From Wang's perspective, emission assessment standards were at a 'developmental' stage in China and 'smooth' carbon trading would depend on consistent standards being adopted everywhere. Although at the time the particulars of the Guangdong scheme were unknown, participants at the IETA event advised cooperation with scheme planners to ensure emission producers and purchasers remained part of the decision process. Sliding carbon prices in the EU ETS may have been beneficial for permit buyers but once the government planners become involved to revive the market they might lose out.
As the Economist pointed out the summer of 2013, an ETS is a cap-and-trade scheme. Since China appears to have no definite cap to carbon emissions, how can the trading work? The Chinese schemes cap carbon per unit of Gross Domestic Product (GDP). Yet since GDP is dependent on production, any ETS run in this way would have to include adjustments at the end of trading. This would give central planners of the scheme plenty of wiggle room to rig the scheme. Worse yet, analysts Thomson Reuters Point Carbon have pointed out that the Chinese schemes face over-allocation of permits, the same issue that sank EU carbon prices. Additionally, one of the criticisms of the Guangdong Emissions Trading Scheme (GETS) pilot scheme was that the carbon prices may have been higher than expected due to market collusion.
The Chinese ETS projects face issues over their openness. If traders don't know accurately how much carbon dioxide is being produced by industry, such as cement production, then the scheme may be undermined. Similarly, over-allocating carbon permits may make it easier for producers to meet targets but it will cause problems in the trading price of carbon. However, given that a carbon emissions cap is an artificial mechanism to encourage markets to cut emissions, should any of these concerns really matter? The main question for Chinese citizens is whether or not China can cut its overall emissions and clear the air in its smog filled mega-cities.
Specifically for cement producers, it seems likely that large producers will be able to cope with the scheme best, from having more carbon permits to sell, to rolling out unified emissions assessment protocols, to liaising better with scheme planners. In Europe smaller cement producers, like Ecocem, have criticised the EU ETS for slowing a transition to a low carbon economy by subsidising the larger producers' emissions through over-allocation. In China, with its self-declared intention to consolidate an over-producing cement industry, whatever else happens it seems likely that smaller cement producers may become lost in the haze.
UltraTech appoints Arun Adhikari as an Additional Director
04 December 2013India: UltraTech Cement has appointed Arun Adhikari as an Additional Independent Director on the Board with effect from 3 December 2013.
Fire at Jammu & Kashmir Cement plant
04 December 2013India: A fire broke out at the government run Jammu & Kashmir Cement plant in the Pulwama district of south Kashmir on 3 December 2013. No one was hurt and damage was caused to "a few machines like motors, diesel oil tank, hot air generator and coal mill," said a police spokesman. Fire and emergency services responded swiftly and put out the fire in an hour. The cause of the fire remains unknown.
UK cement industry emissions rise slightly in MPA Cement Sustainable Development Report 2012
04 December 2013UK: Emissions from the UK cement industry have risen slightly according to the Sustainable Development Report 2012 from the Minerals Products Association (MPA) – Cement.
The MPA reported small rises in nitrogen oxides, sulphur dioxide and dust emissions compared to 2011 due to variety of factors. However, the MPA stressed that all emissions remained below the targets for the sector and limits required by the Environmental Permitting Regulations. Carbon dioxide emissions from cement kilns also rose compared to 2011 due to an increased production of CEM I type cement. Improvements were reported in 2012 year-on-year for lost time injuries and use of alternative fuels.
"Our sustainable development challenges are many and varied, but our strength lies in recognising what these are, setting them out clearly for external stakeholders to see, implementing the measures necessary to meet these challenges and reporting on progress. This first full sustainable development report for the UK cement industry is an important step along a journey that is leading us to a more sustainable future," Dr Pal Chana, Executive Director of the MPA, said. The report has changed from previous editions by commenting on the broader sustainable development aspirations of the UK cement industry in addition to reporting on the manufacturing process.
Al-Amoudi to build two cement plants in Ethiopia
04 December 2013Ethiopia: Mohammed al-Amoudi, the biggest private investor in Ethiopia, plans to build two cement plants in the country due to an 'improving investment environment'. Al-Amoudi said that the new plants would join the US$351m Derba Midroc cement plant that opened in December 2011. Al-Amoudi announced in March 2012 that he intends to invest US$3.4bn in Ethiopia in 2014 – 2016.
Pakistan cement exports to Afghanistan threatened
04 December 2013Pakistan: Exports of cement from Pakistan to Afghanistan have fallen year-on-year for the first four months of the Pakistan fiscal year that started on 1 July 2013, according to figures from the All Pakistan Cement Manufacturing Association (APCMA).
For the first four months of the 2013 fiscal year Pakistan exported 1.46Mt of cement, less than one third of the 4.4Mt of cement exported in the entire 2012 fiscal year. Exports to India are also down year-on-year, at 0.14Mt for the first four months of the 2013 fiscal year.
Commentators in the Pakistani media attributed the fall in exports to competition from Iranian exports in Afghanistan and falling demand in India. Once NATO troops leave Afghanistan the cement consumption in that country is expected to become volatile depending on whether civil unrest grows or if government development programmes continue. Cement exports to Afghanistan currently comprise 50% of Pakistan's cement exports.
Sichuan Shuangma Cement to buy 25% of Dujiangyan Lafarge
04 December 2013China: Sichuan Shuangma Cement plans to buy a 25% stake in Lafarge Dujiangyan Cement for US$137m. Shuangma Cement will pay for the acquisition by issuing shares to the company's major shareholder, Lafarge China Overseas Holding.
Indocement to spend US$335m on capital expenditure in 2014
04 December 2013Indonesia: PT Indocement Tunggal Prakarsa plants to spend US$335m on capital expenditure in 2014, according to its finance director, Tju Lie Sukanto. Most of the allocation will be spent on the construction of the Indonesian cement producer's new brownfield cement plant at Citeureup. He said that the funds will be completely sourced through the company's internal cash and will be used to improve company productivity.
The construction of the new plant at Citeureup started in October 2013 with an estimated total cost of US$545m. When the plant opens in 2015 it is expected to increase the company's cement production capacity by 4.4Mt/yr. The plant is being constructed in cooperation with China-based Tianjin Cement Industry Design and Research Institute. Indocement also plans to construct another cement plant in the same area with a cement production capacity of 1.9Mt/yr costing up to US$120m.
Second Loesche Technical Seminar held in Dusseldorf
04 December 2013Germany: The second Techincal Seminar was held by the Loesche Training Centre in Dusseldorf, Germany, between 7 - 9 October 2013. It was attended by more than 40 delegates.
Theodora Bruns and the Loesche Training Center team organised the seminar and Dr Daniel Strohmeyer, Process Technology department of Loesche GmbH, moderated the sessions. Nine lecturers presented an overview on process and operation of a Loesche Mill, its hydraulic system and the latest development in classifier technology. Specific attention was paid to wear, repair and spare parts for Loesche Mills. Lectures on oil quality, oil sampling and new cement types were also included.
Ambuja Cements and ACC integration to save US$14.4m
03 December 2013India: Following the successful vote to re-structure Holcim's India operations, Ambuja Cements and ACC, the integration of common functions across the two companies has begun.
Holcim wants to eradicate the duplication of roles across the two companies that will aid in savings of US$144m through synergies in supply chain and fixed cost optimisation. The integration will see big changes for some of the two companys' 10,000 employees. Some will be relocated to the group's upcoming facilities as the cement makers have no plans to cut spending.
"The restructuring is about deriving further value from the Indian platform," said Anantharam Gopalkrishnan, vice president for the treasury and tax at Ambuja Cements.
Holcim intends to keep the two brands, Ambuja Cement and ACC, independent. It does not plan to launch the Holcim brand in India or market the two brands with the Holcim tag. When the integration process is completed, which is currently scheduled for 2015, Holcim intends to evaluate the full merger of the operating companies into one unified entity.