Colombia: Cemento País has commissioned its Aguas Prietas grinding plant in Turbaco, Bolívar. The El Tiempo newspaper has reported that the plant is situated in Turbaco’s Cristalina Free Trade Zone

Cement commercial manager Carlos Espinosa Osorio said that the company opted to install cutting edge equipment. “This ensures that each type of cement meets the most rigorous quality and safety standards. Likewise, it translates into a comprehensive value proposition for clients, generating the necessary confidence in the durability and performance of their projects in the region.”

India: The Hindu newspaper has reported that Adani Cement and UltraTech Cement may submit offers for Heidelberg Materials’ Indian business. This follows the news that parent company Heidelberg Materials has reportedly entered into talks with JSW Cement over the possible sale of the business. It consists of cement plants in Andhra Pradesh, Madhya Pradesh, Karnataka and Telangana, in addition to a cement terminal and four grinding plants across India.

Global Cement reported on 4 October 2023 that Heidelberg Materials’ Indian subsidiary HeidelbergCement India had said it was ‘unaware’ of any discussions between its parent company and JSW Cement.

China: China Resources Cement (CRC) has rebranded to China Resources Building Materials Technology (CRBMT). The producer says that this reflects its business positioning and development strategy, and marks the launch of its transformation into a building materials group around its existing cement business.

The European Union (EU) carbon border adjustment mechanism (CBAM) started its transitional phase this week ahead of the full adoption of the scheme in 2026. Importers of goods with a high carbon cost, including cement, will have to report the direct and indirect CO₂ emissions associated with production. No financial penalty will be incurred during the transition period, but from 2026 onwards importers will have to start buying certificates at the EU emissions trading scheme (ETS) price. However, even the full version of the CBAM will be phased in with the cost of embedded emissions increased gradually from 2026 to 2034. Readers can catch up on the CBAM guidance for importers here.

Graph 1: Sources of cement and clinker imports to the EU in H1 2023. Source: Eurostat/Cembureau.

Global Cement Weekly has covered the EU CBAM frequently, but it is worth remembering which countries are most likely to be affected. According to data from Eurostat and Cembureau, the EU imported just over 10Mt of cement and clinker in 2022. This compares to around 2.5Mt in 2016. Graph 1 (above) is even more instructive, as it shows where the cement and clinker came from in the first half of 2023. Most of it was manufactured in countries on the periphery of the EU with, roughly, a third from Türkiye and a third from North Africa. These are the countries with the most to lose from the CBAM.

Graph 2: CO₂ emissions intensity for cement exports. Green signifies cleaner than the EU average, Red signifies more carbon intensive than the EU average. Source: World Bank.

Türkiye is the most exposed. Data from Türkçimento shows that it exported 3.4Mt of cement and clinker into the EU in 2022 or 13% of its total exports. Bulgaria, Italy and Romania were the main destinations for cement. Belgium, Spain and France were the main targets for clinker. Notably, more clinker than cement was exported to the EU. For context, in total Türkiye exported 18.5Mt and 8.5Mt of cement and clinker respectively in 2022. The US was the leading destination for Turkish cement at 9.7Mt and Ivory Coast for clinker at 1.3Mt. Türkiye seems set to tackle the problem that CBAM poses for its iron and cement sectors by introducing its own emissions trading scheme. One view expressed has been that if the country has to pay for its carbon emissions it would much rather pocket the money domestically than see it go to a foreign entity. A relative CBAM Exposure Index put together by the World Bank by June 2023 suggested that Türkiye would actually benefit slightly in comparison to some of its cement exporting rivals as the CO₂ emissions intensity of its cement exports was 4.85kg CO₂eq/US$. This study’s pivot point was 4.97kg CO₂eq/US$, putting Türkiye just across the line for increased competitiveness.

Cement export data for Algeria is harder to find but state-owned Groupe des Ciments d'Algérie (GICA) has been regularly issuing bulletins since 2018 detailing its cement exports. It previously had an export target of 2Mt for 2023 with destinations in Africa, Europe and South and Central America. Looking more widely, research by the African Climate Foundation (ACF) and the Firoz Lalji Institute for Africa at the London School of Economics and Political Science estimated that 12% of Africa’s cement exports ended up in the EU. It reckoned that the introduction of the CBAM and an EU ETS price of Euro87/t would reduce total African exports of cement to the EU by 3 - 5% if the EU ended its ETS free allowance. The World Bank CBAM Exposure study found that Egypt and Morocco were likely to become more competitive for cement exports but Tunisia less so. Unfortunately this analysis did not cover Algeria.

The third largest individual source of imports into the EU in the first half of 2023 was Ukraine. Research from the Kiev School of Economics estimated that the start of the CBAM would reduce the export volume of cement to the EU by 2 - 5%/yr. The World Bank study found that Ukraine would become less competitive as the emissions intensity of its cement exports was 7.62kg CO₂eq/US$. This would be compounded by the fact that more than 90% of the country’s cement exports ended up in the EU. However, since the EU backed the country when Russia invaded in early 2022, imposing the CBAM on exports has acquired geopolitical consequences. There has been lobbying on this issue from various sources, so this situation might be one to watch to gain a sense of how the EU might react when its sustainability aims clash with its political imperatives.

One major risk for the cement exporting countries soon to be affected by the CBAM is if other countries start to do the same in a domino effect before the exporters introduce their own carbon pricing schemes. Türkiye is clearly alert to this. Other countries are thinking the same way. The US, for example, has had senators discuss the merits of setting up its own version. It is also wise to using sustainability legislation to further its own economic ends as the Inflation Reduction Act in 2022 showed. At the moment the US needs lots of cement imports but were this to change then the case to enact a US CBAM might grow.

Finally, one should never discount the sheer amount of bureaucracy involved when dealing with the EU. The UK discovered this when it voted to leave the EU and now the rest of the world gets to enjoy it too! Christian Alexander Müller of Evonik told the Die Welt newspaper this week that Brussels had created a bureaucratic ‘Godzilla.' Another commentator noted that the European Commission only published its guidance document for importers on CBAM in mid-August 2023 and that helping export partners would be like teaching them Latin in just a few weeks. Bona fortuna!

Germany: Heidelberg Materials has announced several senior-level changes to its corporate structure, with the establishment of some new roles. Jon Morrish, currently responsible for Western & Southern Europe, will take on responsibility for the newly established group area of Europe as of January 2024. This will follow the retirement of Ernest Jelito, currently responsible for Northern & Eastern Europe-Central Asia and the Competence Center Cement of Heidelberg Materials, at the end of December 2023.

Elsewhere, Roberto Callieri, General Manager Italy, will be promoted to the Heidelberg Materials Managing Board and take on responsibility for Asia as of January 2024. Incumbent Kevin Gluskie’s term will end at the end of January 2024. As part of the change, René Aldach, chief financial officer, will assume additional responsibility for Australia as of January 2024. Axel Conrads, currently President of the Midwest Region in the US, will be promoted to the Heidelberg Materials Managing Board, taking over the new role of chief technical officer as of February 2024.

India: Orient Cement has commissioned a waste heat recovery (WHR) plant at its Chittapur cement plant in Karnataka. Reuters has reported that the producer plans to subsequently scale up the WHR plant in a second construction phase.

Mexico: Cemex debuted on the sustainability-linked bonds market with an issuance of US$331m on 3 October 2023. The group said that it will use the funds to fully or partly amortise the outstanding balance of its debt instruments.

Cemex is committed to achieving net zero CO₂ emissions by 2050.

India: HeidelbergCement India has clarified that it is ‘unaware’ of reported discussions between its parent company Heidelberg Materials and JSW Cement over the possible transfer of the former’s Indian assets, Reuters has reported.

Heidelberg Materials owns 13.4Mt/yr-worth of cement capacity in India, of which HeidelbergCement India comprises 6.3Mt (47%).

Vietnam: Exports of cement and clinker from Vietnam totalled 23.9Mt during the first nine months of 2023, down by 0.4% from nine-month 2022 levels. Việt Nam News has reported that the value of the country’s cement exports dropped by 2.6% year-on-year to US$1.03bn.

Throughout 2022, Vietnam exported 31.1Mt of cement, for US$1.36bn.

Pakistan: Cement producers increased their sales volumes by 23% year-on-year during the first quarter of the 2024 financial year, which began on 1 July 2023. They recorded despatches of 11.9Mt during the quarter, compared to 9.62Mt during the first quarter of the previous financial year. The Express Tribune newspaper has reported that exports grew by 72% year-on-year to 1.75Mt from 1.02Mt.