September 2024
Firms to net a Euro50m carbon windfall 18 July 2011
Ireland: The Irish cement industry stands to make windfall profits of up to Euro50m 'at the taxpayers' expense,' according to sources familiar with the EU's emissions trading scheme (ETS). The sources estimate that companies such as CRH, Quinn Cement and Lagan Cement have made Euro26m over the past five years from the over-allocation of carbon credits by the government.
The sources estimate that the cement industry stands to make a further Euro25m when the next round of carbon credits is allocated under the ETS. The government allocates a certain amount of emission permits to companies for free. The idea is that polluting companies would buy credits in the market if they exceeded the permitted amount of emissions.
This system is known as 'cap-and-trade' but an initial over-allocation arose, partly because of the construction bust which meant that firms did not produce as much cement as expected. The sources said the transfer was a waste of public funds at a time when the exchequer was financially stressed. They also argued that the effect was to distort the market in favour of making cement.
The estimate of the scale of the subsidy comes after the Economic and Social Research Institute (ESRI) noted earlier in 2011 that the current EU ETS provided potentially large windfall gains for certain industries, such as electricity generation and cement production. The ESRI argued that such windfall gains should be recaptured by society through the tax system.
A spokesman for Cement Manufacturers Ireland did not dispute the figures, saying that the industry had invested millions of Euros in new technology upgrades to become one of the most efficient in Europe. "The current recession was not predicted when allowances were allocated under rules proposed by the Commission," he said.
CNBM reports on environmental goals 15 July 2011
China: China National Building Material Group Corp (CNBM), China's largest building materials manufacturer, invested about USD131m in energy saving and emission reductions in 2010, according to the company's 2010 corporate social responsibility report. The construction industry has long been known for its heavy pollution and high energy use.
The Beijing-based, state-owned company gave top priority to fulfilling its corporate social responsibility (CSR) in terms of energy saving. "The company has dedicated itself to energy conservation by investing in clean technology," said Song Zhiping, chairman of CNBM. According to Liu Baoying, vice-president of CNBM, the cement sector is a major contributor to the company's energy consumption, accounting for more than 90% of the total.
"The company's energy consumption in the cement sector was down by 23% during the period of the country's 11th Five-Year Plan (2006-2010), mainly because of our efforts to eliminate poor production methods and upgrade technology," said Liu. CNBM has disposed of 51 energy-inefficient cement operations with a total capacity of 6.8Mt/yr over the past five years, according to its CSR report.
The country as a whole has also attached great importance to decreasing its carbon footprint with the government targeting reductions in CO2 emissions for every unit of gross domestic product by between 40-45% by 2020 compared with 2005 levels. In addition, CNBM has made substantial efforts in developing new building materials in a bid to reduce energy consumption.
Beijing New Building Material (Group) Co Ltd (BNBM), a subsidiary of CNBM, mainly focused on manufacturing houses made of new building materials that can save electricity, water and materials during construction. They can also reduce by 60-90% the energy used when the buildings are functional, said Cui Lijun, general manager of BNBM.
Gorazdze in largest ever investment 14 July 2011
Poland: On 5 July 2011 Gorazdze launched its newly completed investment, which will enable it to become the 'biggest cement producer in Europe.' The project consumed nearly Euro125m, which makes it the biggest investment in the company's history.
The project was initiated in May 2010, which Gorazdze helmsman Andrzej Balcerek considers to have been the best possible moment. "At that time, the demand for cement was slightly lower, with the whole economy slowing down. At present, it is sky-rocketing; in May 2011 growth was the highest in the last 100 years," he says.
Bernd Scheifele from HeidelbergCement, which is the owner of Gorazdze, sees the investment as a major step forward not only for the Polish firm but for its mother company too and a perfect example of Polish-German economic co-operation. He underlined the fact that over the last 17 years HeidelbergCement has invested around Euro450m in Gorazdze.
Efficiency improvements in the US 13 July 2011
US: A Duke University study prepared for the US Environmental Protection Agency (EPA) has reported that the cement industry reduced its energy intensity by 13% between 1997 and 2007, averaging improvements of more than 1%/yr. These energy savings equate to a reduction of almost 1.5Mt of energy-related carbon. The study showed the gap between the best-performing cement plants and others narrowed and the performance of the industry as a whole improved.
"The decade studied by Duke was one of unprecedented growth for the cement industry, yet Portland Cement Association (PCA) members demonstrated their commitment to environmental stewardship by building sound strategies for energy management and investing in their facilities with state-of-the-art technologies that significantly improved the industry's energy-efficiency and reduced emissions," said Brian McCarthy, PCA CEO and president. "The US cement industry was among the first major industries to tackle the issue of climate change and this study illustrates that it has remained at the forefront of developing policies and improving the manufacturing process."
The study was commissioned by the EPA to measure the change in the cement industry's energy efficiency curve. The energy management approach promoted by the EPA's 'Energy Star' programme, which benchmarks plant energy performance against peers over time and certifies plants that achieve the best enviornmental performance, was an important factor in enabling the industry to improve its energy performance.
The Energy Performance Indicator (EPI) scores the energy efficiency of a single cement plant and allows the plant to compare its performance to that of the entire industry. The tool is intended to help cement plant operators identify opportunities to improve energy efficiency, reduce greenhouse gas emissions, conserve conventional energy supplies and reduce production costs.
US: Inaction by Congress to raise the federal debt ceiling could result in a second recession, adversely impacting cement consumption, according to a recent report by the Portland Cement Association (PCA).
The report says that inaction on the debt ceiling could cause derailment of the fragile US economic recovery. A federal default would have a severe impact on business, consumer and bank confidence, leading to a rise in interest rates. In addition, forced government austerity spending measures are likely. This could depress highway and other government construction programs at the federal and state level. This possibility could cause a great deal of further pain to the cement industry, because public construction projects account for 50% of total cement consumption in the US.
"In this scenario, cement consumption would record a 5.6% retraction in 2011 followed by a 7.5% drop in 2012," said Ed Sullivan, PCA chief economist. "In fact the debt crisis may already be exerting adverse influence on near-term cement consumption due to suspension of state and local treasury bonds as well as an overall uncertainty that has been injected into the economic landscape."
The PCA estimates that the cyclical downturn caused by the Great Recession has reduced federal revenues by USD1.9tn and raised income security payments like unemployment insurance by USD600bn. Aside from revenue and tax assessments, part of the increase in debt has been recorded due to necessary countercyclical spending such as the stimulus package. Defence spending in the Middle East has also contributed to the recent large deficits. The report says that finally (and perhaps most worryingly) deficits have come from increases in entitlement spending fuelled by demographic changes. The Congressional Budget Office expects entitlement spending on social security and the Medicare and Medicaid schemes will rise from USD1.5tn in 2010 to USD2.6tn in 2020.
The debt accumulation during the past four years actually exceeds the total debt accumulated since the country's inception.
Lafarge JV allowed to mine in forest region 11 July 2011
India/Bangladesh: Khaitan & Co has won Supreme Court (SC) approval for French cement company Lafarge to mine limestone in India's north-eastern region in a landmark ruling that will likely set the tone for future reforms in environmental governance. Khaitan & Co litigation partner Sanjeev Kapoor instructed senior advocates for the company, which had commenced mining activity in Meghalaya as a French-Spanish joint venture Lafarge Umiam Mining.
Lafarge successfully defended allegations of fraud and wilful concealment of the facts while contesting the case after 2010's prohibition from mining in the area. The company's project involved sending limestone across the Indo-Bangladesh border on a conveyor belt as raw material for its cement plant in Bangladesh.
"This is a landmark judgement in the context of the environment and mining, especially for projects involving use of forest land for non-forest purposes. The judgement dwells deep into many areas that were until today untouched by any judicial interpretation," said Khaitan & Co. in a statement.
The SC forest bench has upheld the decision of the Ministry of Environment and Forest (MoEF), which had granted revised environmental clearance, site clearance and stage-1 forest clearance to Lafarge. The bench, comprising chief justice S H Kapadia and justices Aftab Alam and K S Radhakrishnan dismissed the petition of 21 tribal activists under Shella Action Committee opposing Lafarge's mining activity in the forest region. The court took into consideration the principles of economic sustainability and environmental viability while laying down significant guidelines such as appointment of a 'National Regulator' to appraise projects, enforce environmental conditions and to impose penalties on polluters.
The court held that, "The word 'development' is a relative term. One cannot assume that the tribals are not aware of principles of conservation of forest. In the present case we are satisfied that limestone mining has been going on for centuries in the area and that it is an activity that is intertwined with the culture and the unique land holding and tenure system of the Nongtrai Village. On the facts of this case, we are satisfied with due diligence exercise undertaken by MoEF in the matter of forest diversion."
QNCC begins trial at Umm-Bab 08 July 2011
Qatar: Trial operations have commenced by the Qatar National Cement Company (QNCC) on its USD6m calcium carbonate plant at Umm-Bab in southern Qatar. QNCC has signed an agreement with the Stream Industrial Engineering Company to build the plant on a turn-key basis. The plant will be specialised in the production of calcium carbonate for use in water treatment operations and is expected to have a production capacity of 250t/day.
QNCC general manager Mohamed Ali al-Sulaiti commented, "There is an agreement with Kahramaa to buy the calcium carbonate for 25 years. For the plant, Ras Girtas power station at Ras Laffan will be one of the supporting stations." He added "QNCC is carefully growing and expanding to play its national role in supporting the infrastructure development in the state, especially after Qatar won the bid for hosting the 2022 FIFA World Cup." Al-Sulaiti further stated that the company has set up two new mills with a planned capacity of 130t/h.
Mexico’s Cemex cancels bond sale 07 July 2011
Mexico: Indebted Mexican cement maker Cemex has cancelled its plans to sell USD650m in bonds as investors are worried about a global economic slowdown. Struggling with limited cash flow and a weak US market, Cemex aimed to raise money to help pay USD1.2bn in debt amortisations by the end of 2013 before being hit with an USD8bn payments bottleneck in 2014.
"Given market volatility and unfavourable performance of markets today, Cemex has decided to not pursue the transaction," the company said in a statement.
Lafarge announces new carbon dioxide targets 06 July 2011
France: Lafarge announced new CO2 targets in partnership with the World Wildlife Fund on 23 June 2011.Key areas include a 33% reduction of CO2 emissions per ton of cement produced by the end of 2020 compared with 1990 levels and a commitment to develop innovative solutions for sustainable construction by 2015. It is anticipated that Lafarge will emit an average of 518kg of CO2 per ton of cement produced in 2020, around 250kg less than in 1990.
New Zealand: Contractors are being asked to register their interest in building a USD400m cement plant near Weston and a shipping terminal at Timaru's port on behalf of Holcim New Zealand. Holcim is still seeking final approval for the projects. Expressions of interest close on 29 July 2011. On 28 June 2011 Holcim New Zealand posted a message on its website inviting contractors to register their interest. Capital projects manager Ken Cowie stated that the marketplace needs to be aware of what will be required if the company's parent board in Switzerland approves the project.
"Getting some preliminary information from the marketplace now would help us get the project under way in a timely manner if the Holcim Ltd board approves it later this year," said Cowie. "It's also about getting an indication of which contractors are in the marketplace with suitable qualifications and experience to undertake the various aspects of work that will be required."
The tentative timetable to construct the plant on a 40ha site indicates that, subject to board approval, site preparation could start in late 2011, equipment could be ordered in late 2011 and early 2012 and the pouring of foundations could take place in the third quarter of 2012. At the peak of construction, almost 500 people would be employed. Commissioning of the plant would be in early 2014 with production starting by the middle of that year. Actual dates for work on the project would depend on if and when approval is received.
The decision to call for expressions of interest from contractors followed the executive committee of parent company Holcim Ltd in may recommending the proposal go forward to its board for a decision. The general scope of works outlined in the expressions of interest document includes the Weston cement plant, associated quarries and pits and a new clinker and cement shipping terminal at Timaru.
The main raw material quarries and pits, limestone, tuff and siltstone were immediately next to the plant site and silica sand would be trucked from a pit near Windsor. Coal to fuel a kiln would be trucked from an open cast pit at Ngapara. KiwiRail would reconstruct the branch line from the South Island main trunk line at Waiareka to the plant to haul cement to Timaru.
"Aspects of the work, such as cement plant mechanical and electrical equipment, would require the involvement of specialist international suppliers and we've been in discussion with a number of these companies about our potential requirements since late 2010," said Cowie.
Holcim New Zealand said it was looking for contractors who had an excellent record of working collaboratively with both the client and other contractors to successfully complete 'a world-class project.' Completing the project with the least possible impact on the environment was also a project goal.
Holcim New Zealand would have overall management of the project and contract out a number of packages of work related to quarry operations, construction of the plant and the Timaru shipping terminal. Following a review of applications, selected contractors will be provided with detailed specifications and drawings and invited to submit bids for the various packages of work.
Once the Weston plant is completed Holcim will close its 50 year old cement factory near Westport in the West Coast region. The Buller District Mayor, Pat McManus, stated that the district's coal industry should fill the gap in the economy. Cowie stated that the West Coast facility will remain open for about three years while the new plant is built.