Displaying items by tag: Alternative Fuels

China: Huaxin Cement’s sales rose by 27% year-on-year to US$1.75bn in the first half of 2018 from US$1.38bn in the same period in 2017. Its net profit nearly tripled to US$304m from US$107m. Its cement and clinker sales volumes grew by 1.13% to 32.2Mt.

The cement producer said that it had been challenged by raw materials and fuel price rises and kiln suspensions due to government-mandated peak shifting production during the reporting period. However, measures such as higher alternative fuels co-processing rates and efficiency gains helped to bolster its financial performance. Its kiln waste processing volumes increased by 18.4% to 0.68Mt.

The company added that its Tibet Shannan 3rd Phase 3000t/day clinker production line was ‘proceeding smoothly’ and was scheduled to start operation by the end of August 2018. Its 4000t/day Yunnan Luquan clinker line and 2.85Mt/yr Huangshi clinker replacement line projects have started construction. In Nepal a 2800t/day clinker line is scheduled to start construction by the end of the year. It is also working on municipal solid waste (MSW) projects in Wuhan Changshankou and Lijiang.

Egypt: Khaled Fahmy, the Minister of Environment, has opened a new production line at Arabian Cement Company’s Ain Sokhna plant in Suez. The line uses FLSmidth’s Hotdisc combustion device to allow it to use high levels of alternative fuels, according to the Watani newspaper. The opening was attended by Muhammad Shehab Abdel-Wahab, chief executive of the Egyptian Environmental Affairs Agency, Nahed Youssef, head of waste management organisation, as well as a number of representatives of the financiers, and director of the European Investment Bank.

In 2015 Arabian Cement Company commissioned another Hotdisc installation. At the time is said it had a designed fuel mix of 70% coal and 30% alternative fuels, using a mixture of agricultural wastes, municipal sludge, and refuse-derived fuel (RDF).

Poland: LafargeHolcim has celebrated investing over Euro95m at its Kujawy cement plant since 2008. As part of the Pomeranian Special Economic Zone, the plant has had a number of upgrades over the last decade and has created over 60 jobs.

Projects at the site have included spending Euro24m on environmental improvements such as installing new filters, building a new clinker silo and four cement silos, and converting the plant to process alternative fuels. Euro56m has been invested on production upgrades including a new cement grinding mill, a new calciner and new constant monitoring systems. Euro18m has been spent on two bulk loading terminals, a new weighbridge and self-loading systems and a new laboratory.

France: The French cement industry union (SFIC), plus three other professional organisations, has announced that has committed to increase the amount of wood waste used in France’s cement plants. It has committed to increasing the amount used by 90% compared to 2015 by 2020.

90,000t of wood were used as fuel in cement production in 2015. The goal is to use 170,000t in 2020. Four cement plants will act as pilot sites. The wood used must be from the same region as the plant burning it. According to the SFIC, alternative fuels account for 41% of cement fuels used in France.

This week’s Plastics Strategy from the European Commission (EC) presents the cement industry with a narrowing target. If the Plastics Strategy is successful it will prevent plastics waste altogether. This will then eliminate the key calorific content of refuse-derived fuels (RDF) and disrupt co-processing supply chains at cement plants across the continent. If it is too lax then dumping plastics in landfill could become more economically viable, also changing the market dynamic. Neither extreme looks likely at this stage but the European cement industry needs to make its views known.

Cembureau, the European cement association, has done just that today with the publication of a position paper on the subject. It conveniently ignores the top two tiers of the waste hierarchy – prevention and re-use – but it does recognise that ‘high quality recycling’ is the preferred option. This is followed by the target of its lobbying: protecting co-processing. Make no mistake, this is supporting industrial behaviour change with solid environmental benefits. Its areas for policymakers to focus on include protecting co-processing: a ban on landfill; linking energy recovery to recycling; concentrating on the legislation; thinking about material lifespan sustainability benefits; and helping minimise the investment costs for processing facilities.

Providing cool heads prevail, the importance of co-processing plastics as part of any realistic plastics strategy seems unlikely to change any time soon. What’s more likely to be the real target for Cembureau is standardising measures on collection, sorting and material recovery across the European Union (EU). For example, as this column has reported twice in 2017 (GCW288 and GCW324), the issues with waste disposal legislation in Italy have led to various problems in the sector. Waste collectors found it easier to export RDF to Morocco from Italy rather than use it locally in 2016. The slag industry has also reported similar issues with reuse in Italy. The consolidation of the local cement industry following the takeover of Italcementi and Cementir by HeidelbergCement and of Cementizillo by Buzzi Unicem should present a more unified industry approach towards alternative fuels. Backup from the EC could solve the other half of the alternative fuels puzzle in Italy and help to deliver serious change. Ecofys data from 2014 showed the EU co-processing average rate as being 41%, with six countries – Ireland, Portugal, Spain, Bulgaria, Italy and Greece – having rates below 30%.

Vagner Maringolo of Cembureau outlined the market opportunities for waste uptake at cement plants at the 11th Global CemFuels Conference that took place in Barcelona in February 2017. He started by revealing that plastics represented over 40% of the total share of alternative fuels used in the EU in 2014. A ban on landfilling municipal waste was expected to boost the supply of RDF and a Cembureau/Ecofys study on the market potential of alternative fuels concluded that around 10Mt of waste was co-processed in cement kilns in the EU28 in 2015. This represented around 2% of total combustible waste each year but it represented 10% of all of the energy recovery from waste in the EU. In other words co-processing plastics waste offers a very attractive means for the EU to meet its sustainability targets.

However, before Cembureau and the cement industry starts popping the (reusable) champagne corks, consider the wider picture. China has banned imports of foreign waste in 2018 including RDF from the UK, a major exporter. Unless new markets are found this may impact the price of RDF in Europe. Brexit is another example how of European waste markets might be disrupted in the medium-term. Cement producers want a steady supply of cheap fuels but if the providers can’t make enough money from their products then the market will fail. The tightrope for Cembureau to walk with plastics is to promote RDF use and secure its supply. Persuading the EC to support this may involve some wobbling along the way.

The 12th Global CemFuels Conference on alternative fuels for cement and lime takes place in Berlin on 20 – 21 February 2018

Belgium: Cembureau, the European cement association, has published a position paper outlining its stance European Commission’s plastics strategy. The association wants policymakers to ensure any plastic waste that has a calorific value that can be recovered as a fuel source is not landfilled. At present there are differences in waste management policies across the member states of the European Union.

Other points that Cemburea wants to highlight include: a ban on landfill of recoverable and recyclable waste; recognition that cement plants can treat different waste streams such as plastics and simultaneously recycle them as material in the manufacturing process of cement and recover them as energy; the specific relevance that co-processing offers the unique opportunity of a simultaneous energy and material recovery; and the potential to minimise investment costs in dedicated facilities.

In January 2018, the European Commission published a dedicated Plastics Strategy as part of the Circular Economy package. The strategy indicates that there is currently a low rate of recycling or reuse of plastics with most of it going to landfill or used in incinerators.

Lots of fascinating information has been emerging in recent weeks about changes in the Chinese cement industry as the larger producers have published their annual financial results. One example is the focus on using alternative fuels to fire up kilns. As explained below, the spotlight on co-processing is state-mandated and this is why the producers are now keen to promote their adherence. Even so, as ever with China, the scale of the change is staggering.

For example, Anhui Conch reported that it had completed 15 waste treatment projects and one sludge treatment project in 2016. In addition it had three projects still undergoing construction at the year-end. The group said that it co-processed 600,000t of domestic waste in its cement kilns in 2016. All of this was achieved by a company that says it only started co-processing municipal waste from its first project in 2010. China Resources Cement’s (CRC) progress was slower but it managed to start a co-processing project at its plant in Binyang County, Guangxi in December 2015 and a sludge project in Nanning City, Guangxi in July 2016. New projects at Tianyang County, Guangxi and Midu County, Yunnan are being built at present, with completion expected by the end of 2017.

Long held rumours about production overcapacity in China came to head in 2015 with the National Bureau of Statistics in China (NBSC) reporting that sales dropped in 2015 following a decade of steady growth. Then the results of most of major producers followed this by falling in 2015. CRC presented a good history of what happened next in the Chinese cement industry in its results report [LINK]. In brief, in 2016 the Chinese government implemented supply-side structural reforms focusing on production efficiency, reiterating attempts to stop new production capacity being built and pushing environmental reforms. Throughout the year various government offices released guidelines to encourage market consolidation, cut obsolete production capacity, increase co-processing rates and decrease the energy needed to produce each tonne of clinker.

Graph 1: Cement sales in China, 2012 – 2016. Source: National Bureau of Statistics in China.

Whether or not any of this has helped the Chinese cement industry to overcome the problems it faced in 2015 is unclear. As Graph 1 shows, Chinese cement sales started to rise again slightly to 2.35Bnt in 2016 from 2.31Bnt in 2015. Sales revenue from some of the major cement producers presents a more varied picture as can be seen in Graph 2. Anhui Conch’s revenue rose by 9.7% year-on-year to US$8.12bn in 2016, China National Building Material Company’s (CNBM) revenue rose by 1% to US$14.8bn and CRC’s revenue fell by 4.2% to US$3.3bn. CRC may have suffered here from its relative business concentration in southeast China. Both Anhui Conch’s and CNBM’s results seemed to look patchy in mid-2016 when they released their half-year reports, but both sales and profits seemed to pick up sharply in the second half of the year.

Graph 2: Sales revenue from selected major Chinese cement producers. Source: Company annual reports.

As the current set of structural reforms kick in within the Chinese cement industry it will be interesting to see what happens next. From plans to cut 10% of local clinker production capacity by 2020 to ambitious environmental aims the sector barely has time to catch its breath. The question is whether the major producers balance sheets are being helped more by a recovering local market or by the reforms. Either way the uptake of alternative fuels is encouraging.

Update on Oman

It’s been an interesting month for the cement industry in Oman with the announcement of various producer projects and a recent market report predicting steady growth in the country.

A late August 2016 sector report from Al Maha Financial Services concluded that government-backed infrastructure projects in the country have pushed cement demand over the production capacity of the two leading local cement producers, Oman Cement and Raysut Cement. The report tempered the good news though with fears that excess production capacity from neighbouring producers in nearby countries would continue to lower prices in Oman. This matches the situation Global Cement found when it visited Oman Cement’s plant in early 2015. Such was the demand-production gap that this producer sometimes imported clinker to keep its supply constant when it shutdown its kiln for maintenance.

Cement production capacity in Oman currently stands at 8.81Mt/yr according to Global Cement Directory 2016 data. The major cement producers hold most of the local market with Oman Cement’s 4.2Mt/yr plant at Rusayl and Raysut Cement’s 3Mt/yr plant at Salalah.

Raysut Cement has announced progress on a number of local projects throughout 2016 including launching a new 20,000t silo at Salalah in May 2016, building a new terminal at the Port of Duqm due to open by the end of the third quarter of 2016, installing a new 150t/hr rotary packing plant with auto truck loader for expected commissioning by the end of October 2016 and it is currently upgrading its gas supply station at Salalah, also to give cement production a boost.

This last project is of particular interest because when Global Cement visited Oman Cement the staff at the Rusayl plant were concerned about the rapidly rising price of natural gas. The plant used gas as its primary fuel and at the time of the interview in January 2015 they were considering diversifying into alternative fuels such as a tyres or using local coal instead. The issue also received a mention in the company’s first quarter report, where it attributed the rise in gas prices to a 26.8% hit in its operational profit taking it down to US$15.6m in the first quarter of 2015.

Meanwhile, both Raysut Cement and Oman Cement are in the process of building a cement plant together at Al Duqm. The latest news on this joint venture emerged in mid-August 2016 when the companies announced that they had registered Al Wusta Cement as the company designated to carry out the project. So far the plant is at the feasibility study stage with further progress to be released at a later date.

Operating in a full-capacity environment will be a dream to many cement producers around the world. However, it is not without its pitfalls from input issues such as gas supply or fighting off external competition who may want a piece of the pie. Oman's construction industry is expected to see growth of 3.4% to US$5.74bn in 2016 backed by government spending. It is there for the taking for the local producers.

This week brought the news that, following testing by the Food Safety and Standards Authority of India (FSSAI), some 27,402t or US$49.8m of Nestlé's Maggi noodles had to be recalled from the market due to allegedly high levels of lead. But what do you do with 27,402t of noodles deemed unsafe for human consumption?

The solution was incineration. Five cement plants will take 40 days, which started on 9 June 2015, to consume all of the noodles as an alternative fuel. "This was the most environment-friendly solution to destroy the recalled noodles," said Luca Fichera, executive vice president of Nestlé's supply chain in India.

India's fuel supply is notoriously unreliable. Coal is the dominant fuel used for cement and power production in India, however, supplies have been inconstant in terms of both quality and quantity for some time now. To shore up the coal supply, the government cancelled, reallocated and auctioned 214 of the 218 coal blocks in India, starting in September 2014. According to local media, Coal India, which still operates most of the blocks, is now expected to increase its coal production capacity by as much as 60Mt in 2015, following 7% production growth in the 2014 - 2015 financial year. However, there is still a major coal shortage in the country and recent reports by India's coal ministry suggest that the new coal linkages will increase coal costs. The new coal linkage process will see sales go via an auction system instead of a static price. Coal costs for cement producers are expected to rise by as much as 25% as a result.

Given India's long-standing fuel supply problems, its cement producers may wish to learn from the use of Nestlé's Maggi noodles as alternative fuels in cement plants. Instead of viewing the coal shortage as a challenge, it might instead be considered an opportunity to increase alternative fuel use, reducing costs and moving to more environmentally-friendly cement production. In addition to the standard industrial, municipal and household waste, among others, India might look to use some of the large quantities of waste biomass that must surely be produced from its agricultural sector. Like the game, 'Hungry, hungry hippos,' India's cement plants could consume a wide variety of nearby wastes in place of coal.

Encouraging news from Egypt with the announcement that Lafarge Ecocem has taken on two refuse-derived fuels (RDF) contracts in Suez and Qalyubeya. The RDF plants will have production capacities of 42,000t/yr and 280,000t/yr respectively, after upgrades are built.

The move follows a deal Lafarge struck with Orascom in March 2015 to develop a waste management framework of municipal and agricultural waste. The plan is to achieve an average fuel substitution rate of 25% by the end of 2015. Around the same time Ecocem also signed a cooperation agreement with the German Development Cooperation (GIZ) and the Qalyubeya Governorate to upgrade a recycling plant in Qalyubeya to produce RDF. Part of the deal was intended to reinvest some of the revenue from RDF sales back into the region's waste collection infrastructure.

These production levels compare to SITA UK's new RDF plants in the UK, which has a more mature RDF market. There, the newly opened Malpass Farm plant is planned to produce 200,000t/yr and the Tilbury plant will have an output capacity of 500,000t/yr when it opens. However, the Malpass Farm plant mainly feeds one cement plant, the 1.3Mt/yr Cemex Rugby plant with a mean substitution rate of 61% in 2013. By contrast, Lafarge Cement Egypt runs the massive 10.6Mt/yr El Sokhna plant.

Co-processing at El Sokhna by Lafarge is of particular interest given the links with Egypt's unofficial household waste collectors, the Zabbaleen. Lafarge Egypt recruited and trained 140 Zabbaleen to gather waste material for RDF production. The strategy enabled Lafarge to gather continuous supplies of RDF and strengthen local stakeholder relations, as Lafarge's 2013 sustainability report puts it. Lafarge Egypt's substitution rate was 2.2% in 2012 with significant improvements made since then. The current target of 25% for the end of 2015 shows how much progress Lafarge has made.

Hisham Sherif of the Egyptian Company for Solid Waste Recycling (Ecaru) placed Egypt's municipal solid waste level at 20Mt/yr at a presentation given at the Global CemFuels Conference earlier in 2015. From this 4Mt/yr of RDF could be produced. Together with biomass derived fuel (BDF) Sherif reckoned that the country's cement plants could reach substitution rates of 30 – 40%. Problems though with increasing RDF rates in Egypt include legal complexities, institutional issues, poor services and monitoring and centralised planning with little regard for the country's unofficial waste pickers, such as the Zabaleen.

Lafarge Ecocem appears to be tackling each of these problems in turn as the deals with Orascom and the Qalyubeya Governorate show. However, spare a thought for Egypt's unofficial waste sector workers who are likely to lose their livelihoods as waste management becomes more formalised and personnel rates per tonne of waste collected tumble.

For more information on the Zabaleen, check out the documentary made about them in 2009, called 'Garbage Dreams'.