Displaying items by tag: Cembureau

Belgium: The European cement association, Cembureau, has asked the Europen Union (EU) to provide a regulatory framework to support the work of the European cement industry in co-processing waste composite materials as alternative raw materials. The materials in question consist of glass, carbon or other fibres and polymer matrices. The association called on the EU to recognise co-processing as ‘recycling’ under the EU Waste Framework Directive, to establish waste composite materials collection schemes and phase out landfilling, and to introduce dedicated waste codes for the materials. Cembureau said that the last of these proposals would help to increase visibility and attract investments.

Cembureau set out its proposals in a joint statement with resins associations Cefic UP/VE and Cefic Epoxy Europe, boating association EBI, composite materials association EuCIA, glass fibre association Glass Fibre Europe and wind energy association WindEurope.

Cemex highlighted its Clyngas project at its Alicante cement plant in Spain this week. The project will produce synthesis gas (syngas) from different types of waste for direct injection into the burner at the plant during the combustion process. It is being run in conjunction with Waste to Energy Advanced Solutions (WTEnergy), a company that Cemex invested in at the end of 2022. It is also receiving Euro4.4m in funding from the European Commission (EC) as part of its innovation fund for small scale projects. The initiative estimates that it will save over 400,000t of equivalent CO₂ during the first 10 years of the project's life by replacing petroleum coke with syngas.

Clyngas is another example of Cemex’s innovation with alternative fuels for cement and lime. It follows on from the group’s work with hydrogen injection into cement kilns. As presented at the 15th Global CemFuels Conference 2022 it has been using hydrogen in low volumes as a combustion enhancer in more than 20 plants worldwide. However, it was also looking into using hydrogen more directly as a fuel and as a feedstock for other alternative fuels. WTEnergy’s gasification process could potentially link up to this as it converts waste streams such as wood chips, agricultural waste, refuse derived fuel (RDF), solid recovered fuel (SRF), dry sewage sludge, meat and bone meal, poultry litter and plastics into syngas. WTEnergy then proposes that its gasification process and/or the syngas can be used for power generation and thermal applications. In the case of the Clyngas project it will be the latter, as the gasification process will be used to boost the burnability characteristics of RDF with a high biomass content. One part of this to note is that the syngas can potentially be used to manufacture hydrogen. This would be a useful capability for a cement company, for example, that was already using alternative fuels and was now considering further decarbonisation by switching to using hydrogen.

A few other cement companies have been looking at synthetic fuels too, but this has generally been as a by-product of carbon capture and utilisation. This week Lafarge France, for example, said it had signed a memorandum of understanding with Axens, EDF and IFP Energies Nouvelles for a synthetic fuel production trial. Its plan is to build a unit that will produce synthetic kerosene using captured CO₂ from a carbon capture installation at Lafarge France's Saint-Pierre-La-Cour cement plant. The kerosene will then be sold to airlines. Other examples of cement companies looking at using captured CO₂ to manufacture synthetic fuels include Finnsementti’s pre-engineering study with Aker Carbon Capture to consider producing methanol as a fuel for transport, Holcim’s and TotalEnergies’ various plans of what to do with the CO₂ captured from the-to-be upgraded Obourg cement plant and Cemex Deutschland’s ambitions for its Rüdersdorf plant.

As can be seen above there are different types of synthetic fuels and cement companies are at the research and pilot stages. Although there isn’t a commonly accepted definition of what a synthetic fuel is, the general meaning is that of a fuel made from feedstock using a chemical reaction as opposed to, say, a refining process. The wide variety of potential synthetic fuels puts the confusion over the different types of hydrogen into perspective. However, this may be a problem for a later date if usage by cement companies becomes more serious.

What is a problem, though, has been the EC’s planned legislation to phase out the use of industrial CO₂ in synthetic fuels by 2041. Cembureau, the European cement industry association, warned in late 2022 of the issues this would pose for industries trying to find a way to utilise their CO₂ emissions where storage was too difficult or expensive. Its view was that while synthetic fuels using industrial CO₂ are not fully net-zero, as the captured CO₂ is later released into the atmosphere, it is a necessary short to medium term step for sectors trying to make the transition. Companies trying to build industrial-scale chemical plants for synthetic fuels need running periods of 20 to 30 years to achieve payback. As of March 2023 Cembureau was still concerned about the implication of proposed regulations, specifically with regards to the proposed criteria for which synthetic fuels could be used, based on their greenhouse gas emissions savings (at least 70% compared to the regular fuels being replaced). It directly linked this to synthetic fuels projects being launched by the cement sector that might be adversely affected by the new rules. The EC published the legislation in late June 2023 and it is set to become legal in mid-July 2023.

Using synthetic fuels either as a fuel or a by-product from cement production is an area of interest currently with the projects detailed above and others in progress. One vision for their use in Europe, at least, is that they might offer a route for carbon capture for cement plants without access to the logistic networks necessary for sequestration. Whether they find a place in cement manufacture either on a transitional basis or over a longer term should become clearer over the coming decade. Yet the EC’s new rules are likely to slow this process down as at least some of the planned pilots may become unviable in Europe. Other jurisdictions around the world take note.

Belgium: Cembureau, the European Cement Association, has elected Ken McKnight as its president and Jon Morrish as vice-president. McKnight, a member of the CRH executive committee, succeeds Isidoro Miranda in the role. Morrish is the chief executive officer for Western & Southern Europe of Heidelberg Materials.

Europe: The European cement industry association, Cembureau, has welcomed the enactment of the Nature Restoration Law, which aims to restore ecosystems through binding targets in line with the EU Biodiversity Strategy. The European Commission says that the law provides a framework to 'secure the things nature does for free, like cleaning our water and air, pollinating crops and protecting us from floods,' as well as to help limit climate change to +1.5°C.

In a joint statement with other extractive industry bodies, Cembureau told the EU that member states' national restoration plans should take into account industry efforts to plan and implement nature restoration, that member states should protect pioneer species in line with the Nature Directives Species Protection Guidelines' definition of temporary nature and that restoration efforts outside of designated Natura 2000 areas should be addressed on a case-by-case basis in recognition of sectoral specificities.

Belgium: Cembureau, the European cement association, has warned against a proposed 2041 phase-out date for industrial CO₂ in the Commission draft Delegated Act on renewable fuels of non-biological origin (RFNBOs). The European Commission’s (EC) draft Delegated Act on the greenhouse gas saving criteria for RFNBOs sets the rules under which such fuels can qualify as sustainable. The European Commission considers that CO₂ from industrial sources should not be allowed for the production of synthetic fuels as of 2041, as this would go against the objective of carbon neutrality by 2050.

Koen Coppenholle, the chief executive officer of Cembureau, said “By proposing an arbitrary deadline on the use of industrial CO₂, the EC severely restricts the deployment of carbon capture and utilisation (CCU) in the cement sector.” He continued “We regret that this phase-out date was established without a thorough impact assessment. This risks negatively impacting several on-going carbon capture projects in the European Union (EU), at a time of a global race for green investments.” Coppenholle also called for a “real, thorough debate on CO₂ utilisation” to ensure that EU policies support CCU and the deployment of CO₂ transport infrastructure and storage.

The association is objecting against this proposal because in its view: manufacturing synthetic fuels using industrial CO₂ make a “decisive” contribution to climate mitigation in the short to medium term; no impact assessment has been presented by the EC; the delegated act threatens the viability of existing CCU projects in the cement sector, which require a payback time of 30 - 35 years; and the Delegated Act does not recognise the reality of industrial installations like cement plants, which are faced with unavoidable CO₂ emissions, and may not have access to CO₂ geological storage sites.

The Delegated Act will be passed to the European Parliament and Council for further scrutiny until April 2023 whereupon they will either accept to reject the proposals. The scrutiny period can be extended to June 2023 at the request of either body.

Europe: The European cement association, Cembureau, has 'welcomed the objectives' of the European Commission's new Green Deal industrial plan. The Green Deal attempts to create a predictable and simplified regulatory environment in which to scale up the production and implementation of net-zero CO₂ technologies.

Cembureau also issued its advise for a successful Green Deal implementation. The association said that the framework must match the US Inflation Reduction Act in its provision of tax rebates and other incentives. It said that the plan must establish stable renewable energy prices and rapid permit procedures, with a focus on deployment of renewables at industrial sites. It also called for funding under the plan to finance the development of infrastructure for CO₂ transport and storage.

Europe: Cembureau has welcomed a satisfactory conclusion to talks over the new Carbon Border Adjustment Mechanism (CBAM) under the European Union (EU) Emissions Trading Scheme (ETS). Negotiators from different EU institutions agreed to a gradual CBAM implementation, which will officially commence in October 2023. Free allocations of ETS credits to the EU cement sector and other industries will phase out between 2026 and 2034. During this transition period, CBAM duties will apply to imported products in proportion to EU production not covered by free allocation.

Cembureau's chief executive Koen Coppenholle said “The agreements on CBAM and ETS are essential to create a global level playing field on CO₂ and support our sector in its transition to carbon neutrality. It is positive that the EU institutions strengthened some key aspects of CBAM. We however regret that the adopted texts do not provide a structural solution for exports. Some EU countries export up to 50% of their domestic cement production and these will be at risk should no concrete export solution be found before 2026.”

Coppenholle added “Looking ahead, we need to focus on CBAM implementation and its water-tightness, to ensure the mechanism fully equalises CO₂ costs between EU and non-EU suppliers. It is also essential that policymakers support EU industries like cement, which are confronted with unsustainably high energy costs at a time some of our trading partners are launching massive subsidy programmes. CBAM, ETS and a strong innovation fund are essential parts of the puzzle, but we look forward to European Commission proposals for a truly ambitious industrial policy, as requested by the European Council in its meeting of 15 December 2022.”

This week’s Virtual Global CemPower Seminar included an assessment on how interventions in European power markets might affect efforts to decarbonise industry. The presentation by Thekla von Bülow of Aurora Energy Research outlined how different countries in the European Union (EU) were implementing the forthcoming electricity price cap on ‘inframarginal’ producers to 180Euro/MWh. Each of these different proposals will entail differing levels of structural change to the wholesale energy market. For example, the Agency for the Cooperation of Energy Regulators (ACER) has recommended establishing a series of frameworks including a stronger focus on Contracts for Difference (CfD) schemes to promote renewable energy sources.

These changes are a consequence of the EU’s response to the Russian invasion of Ukraine. Gas prices surged and then pushed up other energy prices in turn to record levels. As this column covered in September 2022, the price of electricity shot up in the summer of 2022 whilst at the same time Russian gas imports ceased. Cembureau, the European Cement Association, called for urgent action to be taken to support cement production due to large increases in the cost of electricity. For example, in its latest overview of the German cement industry, the German Cement Works Association (VDZ) said that the sector has an electrical consumption of 30TWh/yr. Clearly energy policy is of great interest to the industry.

Since then, in late September 2022, Heidelberg Materials’ chief executive officer Dominik von Achten told Reuters that his company was preparing to shift production at its Germany-based plants to times and days when power prices are lower including at the weekend. However, this was dependent on negotiations with the unions. Von Achten also warned of plant closures being a possibility. Then, in November 2022, it emerged that Zementwerk Lübeck’s grinding plant in northern Germany had reportedly been only operating its grinding plant at night and at the weekend due to high electricity prices. Also in November 2022 European energy news provider Energate Messenger reported that Heidelberg Materials was preparing its cement plants in Germany with emergency backup power to keep critical services running in the case of electricity power cuts. One view from the outside came from equipment supplier FLSmidth’s third quarter results where it noted it had, “...started to see the first cases of budget constraints imposed by customers to counter the increasing energy cost. A high utilisation is still driving service activity in Europe, but some customers have put large capital investments on stand-by and we have experienced a slowdown in decision-making processes.” On the other hand it also pointed out that this trend is driving sales of products that helped reduce energy usage and/or switch to alternative fuels.

On the financial side, Holcim reiterated in its half-year report that, on the country, level the group uses a mixture of fixed price contracts, long-term power purchase agreements, on-site power generation projects and increased consumption of renewable energy at competitive prices to reduce the volatility from its energy bills. Both Cemex and Heidelberg Materials said similar things in their third quarter results conference calls. Cemex said that nearly 70% of its electricity requirements in Europe were fixed in 2022 with nearly 30% fixed for 2023. It went on to reveal that around 20% of its total costs for cement production in Europe derived from its electricity bill. Interestingly, it added that a higher proportion of its electricity costs in Germany were fixed than elsewhere in Europe, due to the use of a waste-to-electricity system owned by a third party that is fed with refuse-derived fuel (RDF), but that it was more exposed to floating fuel rates in Spain. Heidelberg Materials added that it supported energy price caps in both Germany and the EU whether they affected it directly or not.

So far it has been a mild start to winter in Europe. This may be about to change with colder weather forecast for December 2022. This will stress test the EU’s energy saving preparations and in turn it could force the plans of industrial users, such as the cement sector, to change. Some of the cement producers have commented on the financial implications of rising fuel costs but they have been quieter publicly about how they might react if domestic consumers are prioritised. Plant shutdowns throughout cold snaps are the obvious concern but it is unclear how likely this is yet. The variety of energy policies between fellow member states, their own supply situations and the differences between cement plants even in the same country suggest considerable variation in what might happen. If large numbers of cement plants do end shutting throughout any colder periods, then one observation is that it will look similar to winter peak shifting (i.e. closure) of plants in China. The more immediate worry in this scenario though is whether these plants actually reopen again.

The proceedings pack from the Virtual Global CemPower Seminar is available to buy now

Cembureau called for urgent action on electricity prices from European governments this week to protect cement plants. Its maths was crushingly simple. One tonne of cement takes around 110kWh of electricity to produce. Electricity prices started to top Euro700mWh in some European Union (EU) countries at the end of August 2022. The association says that this represents added costs of Euro70/t of cement and a tripling of the total cost of production. This kind of sudden extra cost to cement production could lead to the widespread closure of cement plants and lead to chaos in the construction supply chain.

Previously, Cembureau reported in 2020 that electricity accounts for about 12% of a cement plant’s energy mix. In a dry production process plant 43% of this is used for cement grinding, 25% goes into raw material preparation, another 25% on clinker production and the final portion is typically used for raw material extraction, fuel grinding and for packing and loading. However, the cost of the electricity can make a big difference to the overall energy bill for a cement plant. When a report by the European Commission’s (EC) Joint Research Centre (JRC) modelled a reference northern European cement plant with a production capacity of 1.0Mt/yr back in 2016, it concluded that the EU cement industry was spending around half of its energy costs on electricity compared to smaller ratios at plants in China, Egypt, Algeria and... Ukraine. That last country in the list is poignant given its unwitting participation in the current energy crisis. One other thing to note is that cement producers, as large scale users, may well be paying less than the wholesale prices Cembureau appears to be quoting.

The timing of Cembureau’s proclamation is pertinent because the EU and individual states have mostly been waiting until the autumn before revealing their energy support plans. However, the dilemma for Cembureau, and other industry lobbying groups, is how to protect their sectors whilst domestic consumers are threatened. The aftermath of the coronavirus lockdowns has shown what can happen when production of key commodities stops: supply chain disruption, shortages and price rises. One ironic shortage in the UK during the lockdown periods was that of CO₂, as high gas prices forced the main producer to shut down, leading to unexpected knock-on problems along the supply chain in areas such as food production. The same situation is reportedly at risk of happening again now too.

Cembureau’s wider solution is to link domestic and industrial consumers of electricity. So, some of its suggestions to policymakers are to use all available means of power generation, implement emergency measures such as price caps immediately, change the rules of the electricity market more generally to prevent future price shocks and to promote large scale renewable power source development. These are all things that could help both individual and industrial users of electricity.

Compare and contrast, then, with the MPA’s (Mineral Products Association) approach to the same problem in the UK. Its strategy instead has been to ask the UK government for tax cuts and freezes and to hurry along the forthcoming policy on support for Energy Intensive Industries. That’s not to say that Cembureau’s suggestions don’t also include some sector specific requests. It has asked that the EU temporary state aid framework adopted in late March 2022 should allow all energy intensive industries to have access to state aid covering 70 - 80% of eligible costs. It has also encouraged the wider use of alternative fuels, although it doesn’t link the reason why beyond reducing imports of fossil fuels. Lastly, it bangs the drum for its recent preoccupation, the EU Carbon Border Adjustment Mechanism, this time adding electro-intensity as a main criterion for eligibility for compensation under EU emission trading scheme (ETS) indirect state aid guidelines.

Government support packages for the energy crisis are starting to be announced in European countries but the question for everyone is whether they and other actions will be enough. One problem for the cement industry will be simply staying on the radar of policy makers facing a crisis looming over their citizens. Yet if there is not enough energy to go around then rationing of some kind will be inevitable and heavy industrial users will be the first obvious targets to be told to cut back. Some months later building material supply shortages will hit. One national cement sector to watch in the coming months may be the Spanish one as it has long warned of the risks of high electricity prices.

Belgium: Cembureau, the European Cement Association, has called for urgent action to be taken to support cement production due to large increases in the cost of electricity. It said that, if no measures were taken at both the European and national level, the current energy prices would lead to widespread plant closures across the European Union (EU). This in turn could create a crisis in the construction supply chain. It explained that one tonne of cement normally takes around 110kWh of electricity to produce. Therefore, with electricity prices now between Euro700 - 1000mWh, as observed in several EU member states, electricity costs amount to Euro70 – 110/t of cement, tripling the total cost of production.

The association has called for: all available sources of electricity generation to be used to boost power supplies; the immediate introduction of emergency measures, such as price caps; that the EU temporary state aid framework adopted in late March 2022 should allow all energy-intensive industries to have access to state aid covering 70 - 80% of eligible costs; and that co-processing in cement kilns should be actively encouraged and promoted at EU, state and local levels.

It added that further measures should also be considered, including: the electricity market design rules, including the marginal price setting mechanism, should be changed to prevent further electricity price hikes in the future; the cement sector should be made eligible for financial compensation under the EU emission trading scheme indirect state aid guidelines and that indirect emissions should be included in the EU Carbon Border Adjustment Mechanism (CBAM); the large-scale deployment of renewable energy should be supported across the EU; and that the pace of the EU climate agenda ('Fit for 55') should be maintained, and the CBAM should be implemented in a timely manner.