Displaying items by tag: Alternative Fuels

Egypt: For the fourth quarter of 2014, Suez Cement reported a 2.5% year-on-year increase in revenues and 11.5% year-on-year growth in earnings before interest, tax and depreciation (EBITDA). Its net profit after non-controlling interests increased by 15.2% during the quarter.

For the entirety of 2014, Suez Cement's sales increased by 22%, while recurring EBITDA improved by 8.8% compared to 2013. However, higher corporate income taxes coupled with an absence of foreign exchange gains were responsible for an 8.4% drop in net profit after non-controlling interests. EBITDA gains were also driven by Suez Cement's downstream activities in transportation and ready-mix cements, as well as its paper bags subsidiary, which saw an EBITA increase of 26.5%. Cement activities accounted for a gain of 6.3%.

The strong revenue performance was largely due to cement price increases due to an unprecedented surge in production costs and product shortages. Overall, clinker production decreased as a result of severe energy supply issues that impacted each of Suez Cement's plants and subsidiaries differently. The Tourah plant felt the greatest pressure from expensive clinker imports that were necessary to satisfy Egypt's growing demand.

Suez Cement was also negatively affected by energy costs (gas, mazut and electricity) that rose by 25 - 35% in 2014. It did not let the economic pressures, including a 40% drop in industrial production capacity, impact its employment rates or benefits packages. This was partially due to Suez Cement's commitment to the implementation of energy-efficient processes throughout the five plants, as well as further emphasis and utilisation of alternative fuels, which helped mitigate the drop in production as well as limit the impact from growing clinker imports. Suez Cement will go ahead with the deployment of coal power at all five plants over the next two years, a factor that is also expected to put a stop to some importing activities.

Suez Cement believes that the construction industry's recovery will continue to attract new investment. This is in addition to positive economic growth thanks to Egypt's new-found government stability and the future implementation of several large national projects. However, power cuts and fuel shortages are likely to remain major issues for cement producers. Fuel and energy shortages will also prolong challenges to meeting cement production targets.

The recent closure of the Tourah I plant is one example of Suez Cement's continued commitment to reducing its environmental impact. The company remains focused on investing in energy-efficient initiatives and environmentally-sound programs. This includes developing alternative fuel strategies that incorporate waste-derived fuels and coal, which will shift the company's energy mix and improve its production capabilities by reducing dependence on natural gas and mazut.

Australia: Adelaide Brighton boss Martin Brydon said that he would pursue funding from the Abbott Government's US$2.55bn Emissions Reduction Fund (ERF) as Adelaide Brighton accelerates its alternative fuel use to head off its rising gas bill. The ERF is the centre-piece of the government's direct action climate policy and the first auction for funding starts on 15 April 2015.

Adelaide Brighton has a total energy bill of around US$130m/yr. Brydon said that the group will save US$6m/yr from the repeal of the carbon tax. "We are energy-intensive and capital-intensive. Anything that happens that can reduce the cost of energy is critical," said Brydon.

Adelaide Brighton's Birkenhead cement plant in south Australia, which recently expanded its cement production capacity to 750,000t/yr, generates 15% of its energy from waste wood used in construction. Brydon said that he plans to take that number to 30% and that he 'will certainly' be bidding for grants from the ERF. "The cost of that waste wood energy is significantly below the cost of natural gas," said Brydon.

In 2014, Adelaide Brighton reported a 14.3% rise in net profit to US$136m and a 9% rise in revenue to US$1.06bn. The profit and revenue numbers were both records for the company, although after stripping out one-off items the underlying profit was US$132m. Strong residential housing activity in NSW and Queensland, work on the Pacific Highway upgrade and ongoing demand from resource projects in western Australia and the northern regions buoyed sales. Adelaide Brighton said that it expects price increases in 2015 across all of its products.

In August 2014 the company acquired two concrete businesses and a quarry. Brydon said that he is looking for other businesses to buy, but opportunities for quality long-term assets were 'few and far between.'

One of the compelling issues to emerge from the Global CemFuels conference last week in Dubai was how alternative fuel (AF) use by cement producers might change while oil prices are low. Dirk Lechtenberg, of MVW Lechtenberg hinged his overview talk on both low energy prices and the on-going Lafarge-Holcim merger. The unspoken implication was that Holcim and Lafarge are offloading cement plants that use increasingly unprofitable AF. Cement plants are increasingly being out-bid for AF by energy-from-waste plants and 'gate fees' are dwindling accordingly.

Here's how it works. CRH is buying nine plants from Lafarge and Holcim in western Europe and five in eastern Europe. These are plants with high AF substitution rates. For example, Holcim's plants in France and Belgium have a substitution rate of 50% using around 250,000t/yr of waste fuels. Similarly, the Lafarge Zement Wössingen cement plant has permits for a 60% AF rate.

Globally, Lafarge and Holcim had substitution rates of 17.2% and 12.8% in 2013. CRH had a substitution rate of 21.2% in the same year. Post merger LafargeHolcim is estimated to have a substitution rate of below 10% in 2015. Meanwhile CRH is estimated to have a rate over 30%. After establishing this, Lechtenberg demonstrated how a thermal substitution model might be affected by fluctuating coal prices whilst using a refuse-derived fuels (RDF) rate of 35%. Put the price of coal below US$55/t and the savings of using RDF vanish.

Other delegates at the conference pointed out various limitations in Lechtenberg's methodology and figures. External legislation such as a carbon tax can disrupt this model for example. However, once coal becomes cheap and abundant enough it will displace most AF on economic grounds due to its high calorific value. Very few waste fuels can beat it.

At the time of writing the Brent crude oil price is just below US$60/barrel following a steep decline since mid-2014. The Australian coal price, the world's biggest export hub, has seen a steady fall since 2011 hitting just over US$60/t in January 2015. However, how interconnected are the oil and coal price?

This is difficult to link because bulk energy consumers switch supply according to price and other variables such as which fuels they can actually use. That last point is important in this discussion because preparing a cement plant to use AF requires an investment cost. Meanwhile, energy producers vary production depending on how much profit they want to make. Throw in new energy sources such as waste fuels and fracking and the overall picture becomes messy as all of these factors and others (OPEC policy, legislation etc) interact. Low oil prices do not necessarily mean low coal prices. For example, one analyst looking at BP's Statistical Review of World Energy in 2014 concluded that oil and coal consumption hold an inverse relationship to each other. When the proportion used of one rises, the proportion used of the other falls, and vice versa.

With all of this in mind there is ambiguity over whether CRH has been handed a time bomb in terms of its new cement plants' energy policies. Given that widely assumed production costs for the major oil producing nations are mostly above the current cost of crude oil, if the producers are controlling the price, then it seems likely that the price can't stay this low on a sustained basis. However, the cost of coal is on a five year low also. Is this the new normal or a market blip?

Cement plants using AF have a capital expenditure cushion against changing their fuels mix in the short to medium term but it can only last so long. The longer fossil fuel energy prices remain low the longer CRH will make less money from the fuel strategy it will inherit at its new plants.

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US: The 57th IEEE-IAS/PCA Cement Industry Technical Conference will take place at the Sheraton Centre Hotel in Toronto, Canada from 26 – 30 April 2015.

This year's conference theme is 'BIG.' The participants will visit the biggest cement plant in Canada, the St. Marys Bowmanville facility. According to the organisers, every major cement producer will be represented. 11 new professional training sessions will be offered in 2015, each one twice. There will also be tutorial sessions including Mines Safety and Health Administration (MSHA) recertification as well and a general practices tutorial entitled 'Alternative fuels and raw materials (AFR) thermal substitution and its impact on process and emissions.'

Belarus: Belarusian manufacturers are expected to export 1.8Mt of cement in 2015, including 1.3Mt to be supplied to Russia's Eurocement, according to Construction minister Anatol Chorny. Belarus sold 980,000t of cement to Eurocement in 2014. Belarus' cement output is expected to total 6.1Mt in 2015, up from 5.8Mt in 2014.

"This year we have signed an exclusive contract for the supply of 1.3Mt," said Chorny. "The contract is advantageous to Belarus because 50% of the total amount shall be paid in advance and the rest shall be paid within 10 days of the delivery date. If the price of cement in the Russian market is lower than in Belarus, the Russian company will cover the losses. If the price will be higher, the difference will be equally divided." Belarus will also export cement to Russia's Kaliningrad exclave, Poland and Lithuania in 2015.

Belarus' AAT Krychawtsementnashyfer in Krychaw, Mahilyow, operated at a loss in 2013. This was caused by its old production plant, which still uses natural gas to manufacture cement. In contrast, the company's new production facility generated a profit of about Euro676,000 in 2014. To reduce the cost of cement production, Krychawtsementnashyfer installed a cement kiln fuelled by waste tyres in 2014 and plans to start using coal dust as a fuel in 2015, according to Chorny.

Colombia: Cementos Argos innovation vice-president Camilo Restrepo has persisted with a project to use waste tyres as an alternative fuel in Colombia. Some 120,000 - 130,000/yr tyres are wasted in Colombia.

Cementos Argos is already using waste tyres as fuel in the US and Honduras and says that the same will be done in Colombia. It put forward its plans to local associations and has been discussing these for five years. Cementos Argos could use 60,000 - 70,000t/yr. Its kilns will have to be adapted at cost of US$5 – 20m each. It will start with its unit in Rioclaro, where tests are underway already. The plant can use 15,000 - 20,000t/yr of waste tyres.

US: The Michigan Department of Environmental Quality (DEQ) has granted approval for Lafarge North America to use scrap plastic and asphalt shingles at its cement kilns in Alpena, Michigan State.

Lafarge had requested to be allowed to burn additional fuels in the five cement kilns at its cement plant. Prior to receiving approval to use plastics and shingles as a fuel, the company had used coal, petroleum coke, clean wood and non-halogenated polyethylene and polypropylene as fuel. In its application, Lafarge said that it could use nearly 140,000t/yr of plastics, more than 82,000t/yr of wood and 54,673t/yr of shingles as a replacement fuel for the coal and coke.

Lafarge was issued a permit in 2012 to install technology to allow for a trial burn of shingles in the kilns. The permit required Lafarge to conduct stack testing for emissions of concern from the combustion of shingles. The emissions testing demonstrated that the emissions were less than what Lafarge had originally estimated, according to the DEQ.

Following analyses conducted by the DEQ, staff concluded that the proposed project would comply with all applicable federal air quality requirements and with all of the Michigan DEQ Air Quality Division regulations. The staff concluded that the project, as proposed, would not violate the federal policies.

Germany: N+P has announced that it will expand its cooperation for the delivery of high quality Subcoal^® pellets with Dyckerhoff in Germany.

Subcoal is produced at the Qlyte plant in Delfzijl, the Netherlands. The Qlyte facility produces about 65,000t/yr of Subcoal pellets, consuming around 100,000t/yr of non-recyclable paper-plastic waste fractions that otherwise would have ended in landfill or waste incineration. The Subcoal is used to replace lignite dust or bituminous coal at cement kilns, power stations and lime kilns.

Dyckerhoff started to use Subcoal in 2013. N+P and Dyckerhoff have since worked together to improve the alternative fuel for optimal use in its kilns. The cooperation has led to a new Subcoal fuel that is used at the Dyckerhoff kiln in Lengerich. The kiln in Geseke will continue to use the standard Subcoal quality.

Hungary: Lafarge Cement Magyarország has opened a storage facility for waste that will be used to help fuel its plant in Királyegyháza, southwestern Hungary. The project, involving an investment of EUro2.2m, will be used to store plastic, rubber and industrial and farm by-products.

Australia: The Boral cement plant in Berrima, New South Wales, will receive a US$3.3m grant from the Environmental Trust as part of the NSW Environment Protection Authority's Waste Less, Recycle More initiative. The funding will be used to increase the use of waste derived fuels at the plant.

Executive general manager for Boral Cement Ross Harper said the achievement of the grant confirmed the potentially-important role that the New Berrima site could play in reducing the increasing impact of re-usable materials ending up in landfills.

"Since September, we have been informing our local stakeholders about the positive environmental and economic effects which can be obtained by replacing a portion of our coal consumption at Berrima with fuels derived from recovered and processed waste streams," said executive general manager for Boral Cement, Ross Harper.

Boral is currently preparing to submit planning applications which will seek approval for the use of wood waste-derived fuel and refuse-derived fuel in production at the Berrima plant. The site already holds an approval to use rubber tyre chips. Pending approvals, the site is looking to begin integration of the two fuels from the start of 2016 following construction of the new infrastructure.