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.

Here’s a fun idea: providing building materials as a service. Instead of the owner of a building possessing all the materials in it forever, they simply rent them. It would be like a music or television streaming service. A ‘Netflix’ or ‘Spotify’ for the construction industry. ‘Rentacrete’ if you will…

The Guardian Cities series has been discussing the idea this week in a feature on whether buildings should be demolished at the end of their lifetime. The feature largely looks at the ideas of Dutch architect and commentator Thomas Rau, the author of Material Matters. He talks about his ‘materials passport’ concept whereby all the materials in a building are logged with their properties to highlight their value when the structure is demolished. This is a refinement of the Building Information Modelling (BIM) system. Rau has put his passport premise into action for a couple of projects through his firm and the Madaster Foundation promotes its use.

The next steps that he envisages are buildings where the materials that constitute it are simply rented from the manufacturer. Since the material owners would now become companies they would have an interest in efficiency where the materials can be refitted, such as lighting, and/or recycled for when the building is torn down. In Rau’s view these companies would be in a better position to recoup the value of these materials when a building is demolished. He estimates that 18% of a building’s original construction cost can be preserved in this way. Suddenly, sustainability becomes much easier by changing one’s perspective on who owns what exactly in a building.

How this idea would work in practice raises all sorts of questions. For example, most buildings in the developed world last for as least as long as humans do. Which companies could be relied on to hang around this long? Building materials as a service might work for soft materials that are replaced more often, such as lighting and other interior fittings, but could this extend to a structure’s shell? One answer to this is that people invest in pension schemes and use banks quite happily over long periods time, so why not a building’s very fabric? Another issue is of liability and whether a manufacturer would want to take on additional responsibilities for its products decades later. This, and the idea in general, have similarities to the extended product responsibility strategy. Obviously someone needs to try out building materials as a service for real to tackle these questions and many more.

Building materials as a service is compelling but one reason that the construction industry has proved resistant to the digital revolution across the entire business, so far, is because it ultimately deals with physical products that people need permanently. Consumer digital renting services for media, like Netflix and Spotify, are ‘disposable’. Hence, the mindset is different. That’s not to say that building materials as a service is impossible just that it is a harder shift in thinking. A country with a high level of residential renting, for example, might find it easier to move to this model than one with high levels of home ownership.

One more thing to consider is that the media renting companies mentioned above are dependent on other companies producing the content. Due to this they have moved towards vertical integration as the producers themselves, notably Disney in 2019 which has started to set up its own online rental platform. The point here being that in a product rental environment, whoever produces the product, holds a large amount of influence. Building materials manufacturers take note. Building materials as a service might just be a talking point on the lecture circuit along the road towards sustainability in the construction industry. Yet if it did happen at any scale then the producers of concrete, mortar, bricks, steel and all the rest would be well placed to benefit from it.

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.

Last month Soyuzcement, the Union of Russian Cement Producers, reported that cement production was on course to grow by 8% year-on-year to 58Mt in 2019. This estimate was based on growth from January to October 2019 followed by a modest rise in November.

Graph 1: Cement production in Russia, 2010 – 2019. Source: CM Pro, Ernst & Young.

The pickup is significant because it’s the country’s first annual resumption of growth since 2014. At that time low commodity prices, a worsening economy and international sanctions broke a fairly steady growth cycle that had started in 2000. The only blip in that run was the global economic downturn around 2008. In the medium to long term Soyuzcement’s review pinpointed growth drivers as being government-backed residential housing schemes, integrated land development projects and an increase in the construction of concrete roads. This increase has been driven by consumption growth in most regions, led by a 12% rise in the Central Federal District although the Volga Federal District started to slow in the second half of 2019.

Figure 1: Russian Federal Districts by cement production in 2016. Source: Soyuzcement.ru.

Anecdotally, this change in the fortunes of the Russian cement industry can be seen in the volume of news coverage on the Global Cement website over the last few years. The mean number of news stories on the country in 2016 and 2017, increased by half in 2018 and then again in 2019. Partly this is down to our attempts to increase our coverage of the region but it also shows a general trend. In the news specifically there haven’t been many new plant projects domestically but there has been a steady stream of upgrades and maintenance related stories. For example, Eurocement subsidiary Kavkazcement reported in recent weeks that it had installed a replacement dry kiln. This has been part of a group of upgrades that Eurocement has started in 2019. On the supplier side both Germany’s Gebr. Pfeiffer and Italy’s Bedeschi opened subsidiaries in Russia in 2019.

One thing that didn’t seem to slow down the growth were mounting tariffs on Russian exports into Ukraine. Russia’s neighbour first blocked imports of cement from Russia in May 2019 due to, what it said was a Russian ban on imports. It then followed this with an antidumping rate of 115% for imported clinker and Ordinary Portland Cement (OPC) from Russia. It also penalised imports from Belarus and Moldova, although at lower rates. Russia’s cement export rates seemed untroubled by this, rising by 13.5% year-on-year to 0.8Mt in the first 10 months of 2019. Exports hit of high of just below 2Mt/yr in 2014 but have since stabilised at around 1Mt/yr. Imports reached around 5Mt/yr in the early 2010s and have been slowly declining since then, reaching 1.5Mt in 2018.

The lowered production rate that the Russian cement industry has faced over the last five years has been noteworthy given the apparent low capacity utilisation rate. The Global Cement Directory 2019 records the country as having a production capacity of 111Mt/yr. This gives Russia a capacity utilisation rate of 48% in 2018! Unlike, say, the countries in southern Europe that have had to rationalise their cement industries following the post-2008 decline, Russia may have structural aspects to the industry that have helped protect it from lower utilisation rates. These include relatively low export-import rates and the large size of the country with limited sea access to many regions. Most of its production capacity is located in the west but a sizable minority of plants are based further east across the Ural, Siberian and Far Eastern regions. Even under subdued economic conditions, plants in these places are likely to be less susceptible to foreign imports, for example.

Looking ahead, the question is whether the current growth that the cement industry is enjoying is viable once government spending slows down. Alongside this the industry could also focus on sustainability. As the government announced in early January 2020, the country expects to face both negative and positive effects from climate change. The cement industry could be at the front of this trend if it decides to clean up production and/or move into new markets as the Arctic region opens up.