Analysis

Emir Adigüzel warned that cement prices in Europe could triple under current decarbonisation policies. The director of the World Cement Association (WCA) made the comments at a conference in Germany this week. He noted that most of these carbon-related costs will be passed to consumers. His view is that carbon pricing will force price rises across the industry.

That cement prices will rise due to decarbonisation policies is not in itself news. This debate is really about how much and who pays. The WCA's latest analysis asserts that the cement sector will require investment of US$200bn by 2050 to fully decarbonise. Some progress has been achieved so far. Major cement companies reduced carbon intensity from an average of 700kg CO₂/t in 2019 to 640kg CO₂/t in 2023. Adigüzel’s argument is that carbon capture (CCUS) in the cement sector has its place only “if applied correctly.” His view is that these technologies will have a limited effect on global industry decarbonisation as the required investment per cement plant exceeds the capital cost of an entire cement plant. The WCA prefers to promote decarbonisation instead via energy efficiency, alternative fuels, reduced clinker factor and new technologies. That last one includes CCUS but is not limited to it also covering things such as electrification and heat storage. Note today’s news that India-based Adani Cement has ordered a RotoDynamic Heater from Coolbrook. Adigüzel also criticised the European Union’s Carbon Border Adjustment Mechanism (CBAM) in incentivising non-scheme exporters to reduce their carbon footprint, particularly given the expensive investments required.

Decarbonisation is going to be expensive and CCUS is the priciest part of this. Hence, cement producers are likely to consider taking as many measures as possible before implementing CCUS. That cement companies would pass on these costs to consumers also seems likely. The other obvious outcome is that consumers will simply use less cement where possible. Yet Adigüzel doesn’t address how net zero can be achieved with continuing clinker production without using CCUS. His pricing for CCUS is at the right scale though. As Boston Consulting Group (BCG) pointed out in 2024, the cost of CCUS looks set to increase cement prices from US$90 – 130/t to at least US$160 – 240/t by 2050. As well as the capital costs to build a CCUS unit, this includes the additional energy costs required and the price of transporting the CO₂ to a sequestration site. The first two large-scale Heidelberg Materials CCUS projects in Europe, for example, both connect to government-backed transport and sequestration schemes. BCG went on to posit that decarbonisation trends would create five archetypes of cement plants: export hubs and larger plants close to CO₂ storage sites; former export sites far from storage; import grinding hubs; and stranded assets.

Finally, Carbon Brief reported this week that CO₂ emissions in China continued to stay flat in the third quarter of 2025, suggesting a stable or falling trend since early 2024. The adoption of electric vehicles and declines from cement and steel production contributed to the picture in the latest quarter. Emissions from the production of cement and other building materials fell by 7% year-on-year in the third quarter of 2025. This was attributed to the ongoing real-estate contraction. Note that this decarbonisation trend in China has been created by market trends.

Expect plenty more sustainability stories everywhere over the next few weeks as the 2025 United Nations Climate Change Conference (COP30) started this week in Belém, Brazil. The GCCA will be present at a number of events including an update to the Brazil Cement Industry Roadmap on Saturday 15 November 2025

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The FLSmidth Cement divestment story took a historic turn this week with the renaming of the company to Fuller Technologies. The sale of the company to private equity firm Pacific Avenue Capital Partners completed on 31 October 2025. Pacific Avenue then publicly rebranded the firm a few days later in early November 2025.

FLSmidth Cement was sold as a complete operating business with all the intellectual property (IP), technology, employees, manufacturing facilities, sales and service organisations included. For more on this read Global Cement Weekly #716. The decision to change the name to Fuller Technologies harks back to the history of FLSmidth and related companies. Pennsylvania-based Fuller Company dates back to the mid-19th Century with the formation of the McKee-Fuller Foundry Company. Fuller Company later emerged in the 1920s when it started selling the Fuller-Kinyon pump, a pneumatic screw pump that simplified the handling of pulverised materials. This product went on to become well known for cement conveying. In 1959 Fuller acquired Traylor Engineering. It was then later acquired by FLSmidth in 1990.

What is interesting here is that Pacific Avenue has chosen to emphasise the US industrial heritage of its acquisition. Looking at the numbers last year offers one answer as to why. Purely in economic terms FLSmidth Cement’s revenue share broke down as follows in 2024: US - 24%; Denmark - 14%; India - 11%; Indonesia - 9%; Brazil - 8%; Türkiye - 7%; and China - 7%. The remainder came from export sales elsewhere.

Both Fuller and FLSmidth are well known brands in the cement sector though. One is American and the other is European. Focusing on the US brand name is a canny move given the increasing dominance of China-based equipment suppliers to the global cement market from the 2010s onwards. One of the few markets that the Chinese equipment suppliers have not made inroads into is the US. Whilst they may have supplied smaller pieces of equipment, major orders have remained the preserve of western companies. Or at least publicly they have. Partly this is because few new lines have been built recently. Yet, the three new clinker production lines in the US in recent years - Heidelberg Materials’ plant in Mitchell, Indiana, National Cement’s plant in Ragland, Alabama and GCC’s plant at Odessa, Texas - had major equipment supplied by either thyssenkrupp or KHD. Both companies are German, although KHD is majority-owned by a Chinese entity.

Western cement multinationals have focused on the US as they have retreated from the east. Key examples of this include CRH’s acquisition of Ash Grove in 2018 and the spin-off of Amrize by Holcim in 2025. Trade protectionism has then crept in under the Inflation Reduction Act in 2022 and the more overt tariffs introduced by the Trump administration in 2025. The US cement market is the third largest in the world and the fundamentals for the local construction materials market look good in the medium term. With carbon taxes in the US looking like a distant prospect, it’s a fair bet that more clinker production lines are likely to be required before too long. Protectionism and demand suggest that an equipment supplier to the cement sector with a historically American sounding name and long US-roots might just have an edge. Manufacturing facilities based in the US could also help reduce the cost of tariffs too.

Of course, given that Pacific Avenue is a private equity firm, it may be preparing for a future carve-out or other forms of financial engineering by building up the perceived value of its asset. Or maybe somebody at Pacific Avenue (or elsewhere) simply likes their American industrial history!

Anyway, welcome back to Fuller Technologies and best of luck. And, lest anyone forget, it remains a multinational company with offices in Europe, India, China, Brazil, Thailand, the UAE… and the US.

There have been a few sustainability-related news stories to note recently in Japan. Firstly, the Renewable Energy Institute (REI) released a report on decarbonisation pathways for the cement industry. Then, this week, the Japan Cement Association (JCA) held a press briefing on the sector’s work towards net zero and it released production and sales data. Finally, on a connected note, a speaker from Sumitomo Osaka Cement gave a presentation on recycling gypsum wallboard for cement production at last week’s Global Gypsum Conference.

The REI’s report is similar to other roadmaps published by cement associations around the world. The differences with the Global Cement and Concrete Association (GCCA) targets are worth pointing out though. The JCA is more conservative on the use of blended cements. It only specifies an aggregate CO₂ reduction target for 2030, limited to a greater use of alternative fuels (AF) and improved energy efficiency. Similarly, it forecasts clinker factors of 0.825 in 2030 and 0.80 in 2050, compared to the GCCA targets of 0.58 in 2030 and 0.52 in 2050. The report goes on to show that JCA members have higher Scope 1 and 2 emissions and a higher clinker factor than comparable multinationals, including Holcim, Heidelberg Materials and SCG. In summary the REI concludes that the local sector has been delayed in adopting blended cements, slow on using more renewable energy and continues to be reliant on coal.

The JCA’s update is more practical and outlines what can be expected. A benchmarking system for the sector was established in the 2025 financial year. The country’s emissions trading scheme will then start in the 2026 financial year. Companies that emit a three-year average of over 100,000t/yr of CO₂ will be subject to the scheme. The JCA is currently emphasising the sector’s role at the heart of the circular economy. It pointed out that it used just under 22Mt (5%) of the country’s total waste in 2024. It had an AF substitution rate of 27% in that year also. Other waste streams used included over 5Mt of blast furnace slag, over 6Mt of coal ash and around 1.7Mt of flue-gas desulphurisation (FGD) gypsum.

That last one ties into a presentation that Yuki Mihashi, Sumitomo Osaka Cement, gave at the recent Global Gypsum Conference, held last week in the Netherlands. He gave an overview of his company’s pilot testing of a carbon capture and utilisation process that uses waste gypsum wallboard and mineralises it to make an artificial limestone from cement plant CO₂ emissions. The current pilot plant is based in Osaka and was completed in June 2025. It consumes 10kg/hr of gypsum and can produce around 5.8kg/hr of calcium carbonate. Gypsum wallboard professionals at the event had previously expressed concerns about competition for raw materials from cement producers. If developments like this one progress to full scale deployment there could potential be repercussions in other industrial sectors.

Graph 1: Cement production in Japan, 2019 - 2025. Source: Japan Cement Association. Figure for 2025 is estimated based on nine-month data.

Finally, the latest data from the JCA shows that cement production fell by 3% year-on-year to 32.99Mt in the first nine months of 2025 from 34Mt in the same period in 2024 . Overall sales followed a similar trend, although exports rose by 9% from 5.91Mt to 6.43Mt. This follows a general decline in cement production in Japan since the mid-1990s.

In summary, work on sustainability in the cement sector continues in Japan as it does elsewhere. The conservative approach to clinker factor forecasts is interesting to note compared to more optimistic projections elsewhere. A slower update of blended cements may explain some of this. Interestingly, Taiheiyo Cement said in June 2025 that it was expanding a hub in Saiki to export blended cements rather than using them domestically. On other issues, a current lower AF substitution rate compared to Europe offers one pathway for emissions reduction. The impending ETS may also galvanise action and investment. Expect plenty more sustainability news in the coming weeks ahead of the 30th Conference of the Parties (COP), which is set to take place in mid-November 2025 in Belém, Brazil.

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The Deputy Prime Minister of Egypt met with representatives of the cement sector last week to discuss the local market. The key topics were prices, increased production capacity and restarting suspended production lines. Then this week it was revealed that the government was preparing to issue two new cement plant licences by the end of 2025. So, what’s been happening in the local sector?

Readers may recall that the Egyptian government tackled overcapacity issues by way of cement production quotas back in 2021. This solved the immediate problems at the time but, since then, there has been a growing problem with local producers focusing on export markets to the detriment of the domestic market. For example, there was a shortage of cement reported in mid-2024 due to a shortage of trucks. Large quantities of these were being used, it transpired, to transport cement to neighbouring Libya. For more on this read Global Cement Weekly #760.

The price of cement peaked earlier in 2025. At this point the government took action by limiting cement exports to no more than 30% of a company’s production volume and by abolishing the quota system. It later reviewed the status of eight idle production lines in an effort to get them running again. Prices subsequently eased according to local media reports. Before the changes, the Cement Division of the Federation of Egyptian Industries said that the country had a production capacity of 76Mt/yr from 46 lines. Domestic consumption was estimated at 46Mt/yr and exports at 20Mt/yr giving a utilisation rate 87%. Note that this export figure is 30% of the total production of the country as a whole. For the first half of 2025, production increased by 24% year-on-year to 30.7Mt from 24Mt in the same period in 2024. Exports rose by 11.5% to 9.7Mt from 8.7Mt. However, data from Al Arabiya Business shows that exports fell by 25% in May and June 2025 following the government action. Production grew by 16%.

Vicat’s financial report for the first half of 2025 reported that export sales volumes in Egypt represented over 50% of the local subsidiary’s total sales volumes. It also noted that the domestic price surpassed the export price during the reporting period. Titan Group said that its local business had experienced an ‘impressive turnaround’ due to a construction boom in the country. It said that its plants operated at ‘high capacity’ with an alternative fuels (AF) thermal substitution rate of around 40%. It added that it was intending to expand storage capacity to support growing export volumes. By contrast, Cementir endured a tougher trading period due, in part, to less exports following technical problems related to the restart of a local production line.

A source quoted by Al Arabiya from the Export Council for Building Materials noted that there had been a ‘significant’ decline in exports to several major markets, including Libya, Lebanon, the US, Ivory Coast and Ghana. That anonymous source also warned that, if the problem with the domestic market could not be resolved quickly, then the sector risked losing export markets where reconstruction work was taking place. These comments were mirrored by Adam Khalil, a Building Materials Sector Analyst at Al Ahly Pharos Securities, who told local media this week that the anticipated reconstruction of Gaza presented benefits for Egypt-based construction and building materials companies. In particular, he noted the proximity of Sinai Cement to the Gaza Strip. Unfortunately, at the time of writing, the latest ceasefire between Gaza and Israel appears to have been breached.

The other part of the government action has been focusing on increasing AF substitution rates. At the meeting with the Deputy Prime Minister this month the stated aim was to reduce production cuts. To this end, a report on the number of waste recycling plants was reviewed and compared to the requirements of each cement plant. The government intends to set up ‘practical implementation mechanisms’ to maximise the usage of AF. Energy sources have been a particular bugbear for the cement sector in Egypt historically as the government has encouraged producers to switch fuels from time to time.

The wider economy in Egypt continues to face headwinds. Cementir, for example, in its half year report said that the country’s economy was “...being held back by high inflation, devaluation, rising energy costs, pressure on manufacturing industries and a revision of the state budget with the suspension of infrastructure projects.” However, the International Monetary Fund (IMF) upgraded its growth forecast for Egypt in 2025 and 2026 in mid-October 2025. The decision by the government to cap exports of cement and cut the production quota marks a serious change since 2021. It is clearly watching the situation closely. The timing from roughly in the middle of the year should make the effects clear to see in the annual reports in early 2026. We will wait until then.

This week we covered Capitol Aggregates’ order of an alternative fuels (AF) system from ATS Walter USA. The story is notable because it is an AF project for a cement plant in the US. Thermal substitution rates (TSR) of AF in the US have typically been lower than in the European Union (EU), but this could be changing.

The order was confirmed publicly at the end of September 2025. The subsidiary of ATS Group will supply a solid AF metering and conveying system to the integrated plant in San Antonio, Texas. The system will include a moving floor receiving station, chain belt conveyors, a screen and a separator, dosing equipment, an air-supported belt conveyor and an injection system. ATS Walter says that, by the end of 2026, it will have supplied four AF projects in North America. As an aside, Capitol Aggregates also mentioned in the press release that it “...views sustainability as essential to long-term success.” This sentiment is backed up by the fact that the plant built an early commercial carbon capture unit in the 2010s!

Data from the American Cement Association (ACA) revealed that the AF TSR in the US reached 16% in 2023 from 14.6% in 2022. This compares to a 58% rate in the EU in 2022. It is also worth noting that, in the US the share of gas in the cement industry energy mix rose from 25% to 31%. The ACA attributed this change to a falling price of gas. It added that the coal and petroleum share of the fuel mix fell to its lowest level since 1974. The point here is that the energy mix used by cement plants changes over time regardless of sustainability trends.

Research by LEK Consulting estimated that 60 of the 87 cement plants in the US had a TSR of below 20% in 2023. 39 of these were believed to have a TSR of under 5%. It summarised that hazardous waste and tyre-derived fuels have tended to predominate in the US compared to refuse-derived fuel (RDF) in the EU and elsewhere. LEK went on to say that its research suggested that a quarter of cement plants in the US were likely to install an AF feeding system in 2024 or 2025. This is likely to be the highest rate of AF uptake in the US cement sector to date.

The ACA reckons in its sustainability roadmap that with the right policies and regulations the country’s AF TSR could reach as high as 50%. Its policy suggestions include: reduce permitting barriers to use of so-called non-hazardous secondary materials (NHSM) fuels in industrial manufacturing; treating waste-to-industrial energy as valid recycling use; building robust recycling infrastructure and markets that incentivise the use of non-recycled material streams as industrial AF; community education and support for use of low carbon AF; and increasing the use of NHSMs to divert these materials from landfills. This can be mostly summarised as supporting the uptake of RDF through better permitting and building up the infrastructure and markets for it. LEK also identified the same issue. It called for the adoption of landfill reduction targets or zero-landfill policies by commercial and industrial waste generators. However, LEK believes that, even if this were done, current sources of high-quality RDF in the US would not be able to increase the TSR to even 20%.

News from Capitol Aggregates and others about AF projects in the US are encouraging. If LEK’s research is indicative then a step change in the TSR in the country’s cement sector is already underway. The beauty of AF usage is that it can both potentially cut fuel costs and reduce CO₂ emissions. It won’t be easy as new supply chains for refuse byproducts are built and utilised. Yet, as the ACA is advocating, it is possible and worthwhile.

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