Displaying items by tag: Sustainability
Blah Blah Cement?
17 November 2021Climate activist Greta Thunberg memorably summarised the outcome of the 2021 United Nations (UN) Climate Change Conference (COP26) as “blah, blah, blah” but what did it mean for the cement and concrete industries?
Making sense of the diplomatic language the UN uses is a full time job due to its impenetrable jargon. This is partly why climate activists and others may have become jaded about the outcome of the world’s biggest climate change jamboree. The conference of the parties (COP) tried desperately to hang on to the 1.5°C warming aim set at the Paris event (COP21) in 2015. This is dependent though on countries sticking to their 2030 targets and becoming net-zero by 2050 or earlier. Unfortunately, both China and India, two of the world’s current top three CO2 emitters, have announced net-zero dates of after 2050. Those two countries also drew fire in the western press for weakening the language used in the COP’s outcome document about the ‘phasing out’ or ‘phasing down’ of coal use. However, simply getting coal written on the final agreement has been viewed as a result. Other positive outcomes from the event included commitments for countries to review their 2030 targets in 2022, progress towards coordinating carbon trading markets around the world and work on adaptation finance from developed countries to developing ones.
The headline results from COP26 carry mixed implications for the building materials sector. The Paris agreement (COP21) has already achieved an effect in the run-up to COP26 by prompting the cement and concrete industries to release a roadmap from the Global Cement and Concrete Association (GCCA) in October 2021. Now it’s down to whether individual governments actually follow the targets and how they enforce it if they do. If they don’t, then the response from building material producers is likely to be mixed at best.
What may have a more tangible effect is the work on carbon markets at COP26. Countries were finally able to complete technical negotiations on the ‘Paris Agreement Rulebook,’ notably including work on Article 6, the section that helps to govern international carbon markets and allows for a global carbon offsetting mechanism. The European Union (EU) Emissions Trading Scheme (ETS) has shown over the last year how a high carbon price may be able to stimulate companies to invest in mitigation measures such as upping alternative fuels substitution rates and developing carbon capture and storage/utilisation projects. Critics would argue that it may simply be offshoring cement production and closing local plants unnecessarily. Making a more global carbon trading scheme work amplifies both these gains and risks. Either way though, having an international framework to build upon is a major development. Finally, work on adaptation finance could have an effect for cement producers if the money actually makes it to its destination. The big example of this announced at COP26 was a US$8.5bn fund to help South Africa reduce its use of coal. It is mainly targeted at power generation but local cement producers, as a major secondary user of coal, are likely to be affected too.
Alongside the big announcements from COP26 lots of countries and companies, including ones in the cement sector, announced many sustainability plans. One of these included the launch of the Industrial Deep Decarbonisation Initiative (IDDI) during COP26 by the governments of the UK, India, Germany, Canada and the UAE. This scheme intends to create new markets for low carbon concrete and steel to help decarbonise heavy industry. To do this it will disclose the embodied carbon of major public construction projects by 2025, aim to reach net zero in major public construction steel and concrete by 2050, and work on an emissions reduction target for 2030 which will be announced in 2022. Other goals include setting up reporting standards, product standards, procurement guidelines and a free or low-cost certification service by 2023.
All of this suggests that the pressure remains on for the cement and concrete sector to decarbonise, provided that the governments stick to their targets and pledges, and back it up with action. If they do, then the industry will remind legislators of the necessity of essential infrastructure and then continue to ask for financial aid to support the development and uptake of low carbon cements, carbon capture and whatever else. Further adoption of carbon markets around the world and global rules on carbon leakage could help to accelerate this process, as could adaptation finance and global standards for low carbon concrete. The next year will be critical to see if the 1.5°C target survives and the next decade will be crucial to see if global gross cement-related CO2 emissions will actually peak. If they do then it will be a case of ‘hip hip hurrah’ rather than ‘blah blah blah’.
Brazil: Members of the Brazilian National Cement Industry Association (SNIC) have committed to a 34% reduction in the CO2 emissions of their cement production to 375kg/t by 2050 from 564kg/t in 2019. Ten cement producers including Cimento Tupi, CSN Cimentos, InterCement and Votorantim signed the commitment. With the industry's forecast rate of growth in cement production capacity, this will result in possible total CO2 emissions of 45Bnt in 2050 compared to 36.7Bnt in 2020.
Planned CO2 emissions reduction investments before 2032 are US$637m across the industry.
Cementos Molins renews sustainability-linked loan
16 November 2021Spain: Cementos Molins has secured a renewal of its sustainability-linked loan until December 2026 and increased its limit to Euro300m. The loan is linked to reductions in Cementos Molins’ CO2 emissions.
Chief financial officer Jorge Bonnin said “This innovation, together with the robust financial position and the strong cash generation, enables the development of the profitable and sustainable growth strategy through markets consolidation and development in new markets.”
Grupo Argos named in Dow Jones Sustainability Index
15 November 2021Colombia: Dow Jones has named Grupo Argos in its Sustainability Index 2021, the company’s ninth time appearing in the ranking. It achieved its highest ratings in materiality, risk management, environmental reporting, climate change strategy, social reporting and human rights. The group said that the listing constitutes its recognition as the most sustainable cement company in the world. Its sustainable initiatives include offering collection of its used cement bags, supplying all the electricity for its Colombian operations from renewable sources and currently having three credit facilities linked to environmental, social and governance indicators.
Legal and sustainability vice-president Maria Isabel Echeverri said “At Argos, we are greatly satisfied with this result which places us as a world benchmark in sustainability and reassures our commitment to closing gaps and implementing best practices in social, environmental, financial and corporate governance matters. This drives us to continue moving forward in creating social value to build the dreams of housing and infrastructure for millions of people.”
Cemex secures US$3.25bn credit agreement
11 November 2021Mexico: Cemex has successfully closed a US$3.25bn syndicated credit agreement. The group said that it used the proceeds to repay its previous US$2.65bn facilities agreement. The new agreement will require repayment in November 2026. As the facility is worth 23% more than its previous one, the company said that it will have a stronger liquidity position than previously, resulting in a favourable company risk and credit rating situation.
CEO Fernando Gonzalez said "This new credit agreement represents a major milestone in our path to investment grade as it is our first major syndicated unsecured bank agreement since 2009. It showcases Cemex’s continued access to diversified funding sources while further aligning our financing strategy to our leadership in addressing climate change.” He added “We are starting a new chapter for the company where we shift our strategic balance a bit more towards growth and the advancement of our Climate Action goals.”
Holcim commits to 40% sustainable financing by 2024
10 November 2021Switzerland: Holcim says it wants to reach at least 40% of sustainable financing by 2024. It intends to put climate action, water preservation and safety at the heart of its strategy to do this. The company has linked this commitment with the completion of two new sustainability-linked financing transactions worth above Euro2.8bn. It has also joined the United Nations Global Compact (UNGC) Chief Financial Officers (CFO) Taskforce alongside 60 companies representing a combined US$1.7Tn in market capitalisation. The UNGC CFO Taskforce aligns members’ finance strategies with the United Nations Sustainable Development Goals (SDG).
Holcim’s CFO Géraldine Picaud said, “Sustainability is at the core of what we do. That's why we set ourselves some of the most ambitious goals in our industry. Walking the talk, we are putting climate, water and safety at the heart of our financing strategy. To make a bigger impact, I am delighted to be a member of the UNGC CFO Taskforce to move this agenda forward with my peers.”
In August 2021, Holcim refinanced a Euro3bn syndicated credit line linking it to climate and safety in line with the UN SDGs. The cost of the credit facility will depend on the company’s achievement of its annual targets in these areas. In September 2021, Holcim placed a new 10-year US$100m sustainability-linked bond, based on its 2030 CO2 reduction target. This issue represents its first private placement of a US Dollar medium-term note linked to climate action. The investor will be entitled to a higher coupon should the company not meet its climate objective. These actions follow the company’s Euro850m sustainability-linked bond issued in November 2020.
Betolar launches partnership with Tara to encourage uptake of low-carbon concrete in India
10 November 2021India: Finland-based Betolar has launched a partnership with sustainable housing company Tara. The arrangement is intended to enhance India’s ‘green’ construction sector by encouraging the use Betolar’s pre-cast concrete products. These use waste inputs to create a low-carbon alternative to Ordinary Portland Cement. Betolar has been working with Tara since around 2019 to bring its commercial products to the local market.
Betolar's Head of Asia said, "There is a tremendous appetite for sustainable construction materials in India which we are tapped into through our work with Tara and its mission to develop alternative and sustainable models for rural development, democratizing construction from the bottom up."
Holcim Schweiz and Volvo Autonomous Solutions develop automated electrical dumpsters
05 November 2021Switzerland: Holcim Schweiz has partnered with Sweden-based Volvo Autonomous Solutions to test and develop automated electric dumpsters at its Gabenchopf quarry in the Siggenthal. The companies aim to develop a safe, efficient and sustainable dumpster for use in the cement industry.
CEO Simon Kronenberg said “We are very excited to be working with Volvo on this project. For us, this project means a further step towards realising our sustainability goals: in order to make a contribution to a sustainably built future, we continuously invest in measures to reduce our ecological footprint and look for solutions that are both innovative and sustainable."
Cementos Molins diversifies cement range with Calucem acquisition
04 November 2021Germany: Cementos Molins has concluded its acquisition of calcium aluminate cement producer Calucem following all regulatory approvals. Calucem operates the Pula grinding plant in Istria, Croatia and a bauxite quarry in Turkey. The new acquisition positions Cementos Molins as the world's second largest calcium aluminate cement producer. The company said that it expands and enhances its innovative and sustainable product range in line with its sustainable growth strategy.
CEO Julio Rodríguez said “I warmly welcome the Calucem team into the Cementos Molins family. Today marks a new and exciting milestone in the history of Calucem and Cementos Molins and, with this integration, we have excellent business development opportunities for a new step forward to our strategy of profitable and sustainable growth.”
Calucem CEO Yuri Bouwhuis said “We are excited about the integration into Cementos Molins, where we will accelerate our development and create together more value for all our stakeholders.”
Sumitomo Osaka Cement to raise prices from February 2022
03 November 2021Japan: Sumitomo Osaka Cement says it will raise the price of its cement from February 2022 due to rising coal and heavy fuel oil costs. It said that these mounting input prices were leading to ‘significant’ manufacturing and logistical overheads. The cement producer expects that these energy prices will remain high in the foreseeable future. It added that maintenance, labour and carbon neutrality goal costs were also growing.