September 2024
Japan: Tokuyama Corporation has installed ABB’s Expert Optimizer automated optimisation system in the kiln line of its Nanyo cement plant. The system controls the line’s calciner, kiln and cooler processes. The supplier says that the technology will reduce the Nanyo cement plant’s thermal energy consumption by 3%.
Tokuyama Corporation "We selected ABB's Expert Optimizer to equalise operations and improve operational efficiency. As expected, we have significantly reduced the number of the operator manual operations normally spent on manual tasks.” It added “We believe that this solution will also support our young operators in learning the know-how of our operations efficiently."
Cimento Gaúcho inaugurates Montenegro grinding plant 25 August 2023
Brazil: Cimento Gaúcho has inaugurated its 400,000t/yr Montenegro grinding plant in Rio Grande do Sul. The producer invested US$20.4m in the facility, which will initially produce 100,000t/yr of cement. Besides the local market, Cimento Gaúcho also plans to supply cement from the Montenegro grinding plant to Argentina, Paraguay and Uruguay. The El Pais newspaper has reported that the plant will create 30 direct jobs, and a further 120 indirect jobs.
Cimento Gaúcho is a joint venture of Hipermix and Uruguay-based Compañía Industrializadora de Minerales.
ACC and UltraTech Cement secure granulated blast furnace slag supply from Bokaro Steel Plant 25 August 2023
India: Bokaro Steel Plant has won granulated blast furnace slag (GBFS) supply contracts with ACC and UltraTech Cement. Under the contracts, Bokaro Steel Plant expects to supply 1.3Mt of GBFS from its facilities in Jharkhand for use in cement production in the state. The Pioneer newspaper has reported that the contracts will run until August 2026.
Terra CO2 supplies OPUS supplementary cementitious material for indiGO Auto Group car dealership in Texas 25 August 2023
US: Terra CO2 has performed a successful demonstration pour of its OPUS silicate-based supplementary cementitious material (SCM) at a construction site in Texas. Terra CO2 supplied the SCM to indiGO Auto Group for the construction of its Porsche Sugar Land car dealership in Houston. It says that the product delivers durability, strength and functionality on a par with other, traditional SCMs. Tonne-for-tonne, the use of OPUS reduces projects’ CO2 emissions by 70%, and their NOx emissions by 90%, compared to ordinary Portland cement (OPC).
Terra CO2 CEO Bill Yearsley said "Our work at Terra CO2 is about forging a viable path for sustainable construction. We're set on creating a blueprint for the future where performance, cost-effectiveness and sustainability coexist seamlessly across projects. We're moving beyond the lab, beyond the processes that have held us back as an industry, and introducing a sustainable solution to real-world applications."
Adani Group increases earnings, including cement earnings, in first quarter of 2024 financial year 24 August 2023
India: Adani Group recorded earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$2.85bn in the first quarter of the 2024 financial year, up by 42% year-on-year. The conglomerate’s cement business contributed an EBITDA of US$235m, up by 54% year-on-year. This represented 8.2% of the quarterly total. The group sold 15.4Mt of cement.
Financial Express Online News has reported that Adani Group said “The robust portfolio performance was primarily driven by the renewable power business under Adani Green, the infrastructure businesses under Adani Enterprises and the cement businesses under Adani Cement.”
Cementos Argos to expand facilities in the US and Colombia 24 August 2023
US/Colombia: Colombia-based Cementos Argos is carrying out expansions to two cement plants in South Carolina and West Virginia. While not specifically named, these would appear to be the 1.1Mt/yr Harleyville and 1.8Mt/yr Martinsburg cement plants. The producer says that the expansions will increase its cement capacity in the eastern US by 450,000t/yr.
Additionally, Cementos Argos plans to expand the capacity of its Cartagena cement terminal in Colombia by 35% to 4Mt/yr. The producer says that this will serve as a platform for subsequent growth. It is targeting the US market, where an expansion is also underway at its import facility in Houston, Texas. The Cartagena terminal achieved its current capacity following a recent US$42m expansion.
Turkmencement completes Lebap cement plant upgrade 24 August 2023
Turkmenistan: State-owned Turkmencement has successfully carried out an upgrade to its 1Mt/yr Lebap cement plant at Koytendag. The upgrade involves the installation of a new 3000t/day kiln line, supplied by Germany-based thyssenkrupp Industrial Solutions. The producer first announced the project in mid-2020, and ordered the new line in mid-2021.
In 2022, the Lebap cement plant produced 1.1Mt of cement, up by 11% year-on-year from 991,000t in 2021.
China: Xinjiang Tianshan Cement recorded a profit of US$19.5m during the first half of 2023, Reuters has reported. This corresponds to a 96% decline from first-half 2022 levels.
Cemex Mexico exceeds Mexico’s 2030 alternative fuel target 24 August 2023
Mexico: Cemex Mexico subsitituted 36% of it cement fuel with alternative fuel (AF) in 2022. This exceeds the Mexican cement industry’s target for 2030, of 32%. Mexico Business News has reported that the producer used 1.05Mt of AF across its operations. This reduced its CO2 emissions by 1.8Mt, and prevented 850,000t of methane emissions from being generated in landfill. Cemex Mexico’s Huichapan cement plant in Hidalgo set the company record for the year, with 207,000t of AF co-processed in its cement production. It produced 3.2Mt of cement for the Bajio, Central, Central-North, Laguna and Southeast Mexico markets.
Sustainability Manager Carlos Medina said "Last year’s results motivate us to intensify our efforts and uphold good practices that benefit communities and the environment. We will keep promoting environmentally friendly solutions in all our operations, as we are convinced that all social actors must collaborate to lay the foundations for a better future."
New emissions taxes hit Hungary’s cement industry 23 August 2023
The Hungarian government recently enacted Emergency Decree 320/2023, taxing all CO2 emissions from the country’s 40 or so largest industrial enterprises. The government used emergency powers to set up a new taxation scheme, which undercuts existing free allowances under the EU emissions trading scheme (ETS). The scheme additionally penalises the trade in ETS credits. Cement producers announced that the new regulations will make it impossible for them to keep operating.1
With regard to Hungary’s six active cement plants, the scheme comprises:
1 – A Euro20/t tax on CO2 emissions, effective retroactively from 1 January 2023, payable by any large enterprise that uses EU Emissions Trading Scheme (ETS) free allowances to cover the majority of its CO2 emissions. Plants that decrease their production, or that carry on non-CO2-emitting activities at over 10% of their operations, will pay a higher rate of Euro40/t of CO2.
2 – A 10% transaction fee for the sale of free allocations under the EU ETS, payable to the Hungarian Climate Protection Authority.
Less than three years ahead of full implementation of the EU carbon border adjustment mechanism (CBAM), the Hungarian government has seemingly moved unilaterally against cement production – this in a country surrounded by seven other cement-producing countries. Multiple foreign cement producers connected to the major market of Budapest by rail, river and road will be watching developments with interest. These include CRH, which, besides two smaller plants inside Hungary, operates the 800,000t/yr Cementáreň Turňa nad Bodvou plant, immediately over the border in Slovakia.
This comes at a time when the domestic cement industry is facing historically high costs and low demand, with a 30% year-on-year decline in construction activity in July 2023, following double-digit inflation throughout 2022 and the first half of 2023.
Catastrophising may be a common symptom of environmental regulation in industry associations, but one can understand on this occasion. The Hungarian cement and lime industry association, CeMBeton, backed its members’ gloomy announcement about their future with an estimate for extra annual taxes of ‘several billion forints’ (1bn forint = US$2.84m), in a statement following the decree. Assuming annual CO2 emissions of 565kg/t across its 5.4Mt/yr cement capacity, the sector might expect to pay US$61m/yr in CO2 rates alone.2, 3 According to analyst ClearBlue, the government will raise additional tax revenues worth US$278m/yr across all of the 40 aforementioned heavy emitters in Hungary.4
It may seem surprising that CeMBeton did not even draw up a projected tax bill during consultations over the new tax scheme – but, in fact, no such consultations took place. In its most recent statement, the association said “We do not know the government’s intentions.” Outside of official releases, Hungary’s cement producers have not always been so reserved about the government’s perceived aim.
Global Cement reported in April 2023 that the Hungarian government was allegedly interfering in the cement sector to make producers sell up – as per accusations by an anonymous industry executive.5 There is arguably a course of action on the government’s part which, more or less, appears consistent with this aim:
October 2020 – The Hungarian Competition Authority (GVH) starts competition supervision proceedings against CRH, Duna-Dráva Cement and Lafarge Cement Magyarország.
July 2021 – Emergency Decree 2021/404 imposes a 90% tax on producers’ ‘excess’ profits, based on threshold cement sales revenues of Euro56/t. Additionally, producers must report their exports.
September 2021 – GVH finds insufficient evidence to support the initiation of competition supervisory proceedings in the cement industry.
January 2023 – (Retroactive) entry into force of CO2 emissions tax.
May 2023 – The government of Hungary reportedly initiates negotiations to acquire Duna Dráva Cement and Holcim Magyarország, according to the Hungarian builders’ association, National Professional Association of Construction Contractors (ÉVOSZ). Duna Dráva Cement owners Heidelberg Materials and Schwenk Zement state that they have entered into no such negotiations, while Holcim declines to comment.
July 2023 – The Act on Hungarian Architecture lets the government dictate producers' volumes and prices and require them to supply cement to National Building Materials Stores (a proposed state-owned construction materials retail monopoly).6 Additionally, the government gains a right of first refusal over the divestment of any asset by the cement industry’s foreign owners.
20 July 2023 – The government enacts Emergency Decree 320/2023. ETS transaction fees enter into force.
The government can now expect a legal challenge to its latest move. CeMBeton’s first ally may be the font of all emissions legislation – the EU itself. Within the EU ETS framework, tax rates are down to member states to determine. However, the introduction of a transaction fee may constitute an illegal restriction to free allowances, OPIS News has reported. The association has also indicated its readiness to mount a constitutional challenge, specifically with regard to the legislative retrofit involved in the CO2 emissions tax. The Fundamental Law of Hungary does not generally permit legislation to apply retroactively, though how courts will balance this consideration against the rights of the government is untested.
The government amended the constitution to provide for new emergency powers, and subsequently adopted them in May 2022, in response to the ‘state of danger’ created by Russia’s war in Ukraine – though its actions on the international stage suggest careful neutrality, if not ambivalence. At home, the war has brought a consolidation of the government’s control over various areas of life, including the economy, according to Human Rights Watch.7
Climate protestors around the world might be glad to see governments wield emergency powers against their own heavy industries. In Hungary, however, the wider sustainability goals are not yet clear with regard to a policy that seems, at least partly, politically motivated.
References
1. CeMBeton, Sajtónyilatkozat, 21 August 2023, https://www.cembeton.hu/hirlevel/2023-08-21/202308-mozgalmas-osz-ele-nezunk/116/sajtonyilatkozat/668
2. Heidelberg Materials, ‘Energy and climate protection,’ 2022, https://www.heidelbergmaterials.com/en/energy-and-climate-protection
3. Global Cement, Global Cement Directory 2023, https://www.globalcement.com/directory
4. OPIS News, ‘Hungary's New Carbon Tax Unlikely to Set EU Precedent, Say Analysts,’ 16 August 2023
5. Global Cement, 'Update on Hungary,' April 2023, https://www.globalcement.com/news/item/15572-update-on-hungary-april-2023#:~:text=Heidelberg%20Materials'%20subsidiary%20Duna%2DDr%C3%A1va,the%20country's%20active%20national%20capacity.
6. Daily News Hungary, ‘Hungarian government’s new nationalising plan could violate EU law,’ 27 February 2023, https://dailynewshungary.com/hungarian-govts-new-nationalizing-plan-could-violate-eu-law/
7. Human Rights Watch, ‘Hungary’s New 'State of Danger',’ 8 June 2022, https://www.hrw.org/news/2022/06/08/hungarys-new-state-danger