Displaying items by tag: European Union

Dalmia Cement threw down the gauntlet this week with the announcement of a large-scale carbon capture unit (CCU) at one of its plants in Tamil Nadu, India. An agreement has been signed with UK-based Carbon Clean Solutions Limited (CCSL) to use its technology in building a 0.5Mt/yr CCU. The partnership will explore how CO₂ from the plant can be used, including direct sales to other industries and using the CO₂ as a precursor in manufacturing chemicals. No exact completion date or budget has been disclosed.

The move is a serious declaration of intent from the Indian cement producer towards its aim of becoming carbon neutral by 2040. Dalmia has been pushing its sustainability ‘journey’ for several years now hitting targets such as reaching 6Mt of alternative raw materials usage in its 2018 financial year and reaching a clinker factor of 63% at the same time. In an article in the November 2018 issue of Global Cement Magazine it said it had achieved CO₂ emissions of 526kg/t from its cement production compared to 578kg/t from other Indian members of the Cement Sustainability Initiative (CSI). In its eastern operations it had gone further to reach 400kg/t.

Using CCU is the next step to this progression but Dalmia’s approach is not without its caveats. Firstly, despite the size of the proposed project it is still being described as a ‘large-scale demonstration.’ Secondly, the destination of all that captured CO₂, as mentioned above, is still being considered. CCSL uses a post-combustion capture method that captures flue gas CO₂ and then combines the use of a proprietary solvent with a heat integration step. Where the capture CO₂ goes is vital because if it can’t be sold or utilised in some other way then it needs to be stored, putting up the price. Technology provider CCSL reckons that its CDRMax process has a CO₂ capture price tag of US$40/t but it is unclear whether this includes utilisation sales of CO₂ or not.

The process is along similar lines to the Skyonic SkyMine (see Global Cement Magazine, May 2015) CCU that was completed in 2015 at the Capitol Cement plant in San Antonio, Texas in the US. However, that post-combustion capture project was aiming for 75,000t/yr of CO₂. Dalmia and CCSL’s attempt is six times greater.

Meanwhile, Cembureau, the European cement association, joined a group of industrial organisations in lobbying the European Union (EU) on the Horizon Europe programme. It wants the budget to be raised to at least Euro120m with at least 60% to be dedicated to the ‘Global Challenges and European Industrial Competitiveness’ pillar. This is relevant in a discussion on industrial CO₂ emissions reduction because the scheme has been supporting various European cement industry projects, including HeidelbergCement’s work with the Low Emissions Intensity Lime And Cement (LEILAC) consortium and Calix at its Lixhe plant in Belgium and its pilots in Norway. As these projects and others reach industrial scale testing they need this money.

These recent developments provide hope for the future of the cement industry. Producers and their associations are engaging with the climate change agenda and taking action. Legislators and governments need to work with the cement sector to speed up this process and ensure that the industry is able to cut its CO₂ emissions while continuing to manufacture the materials necessary to build things. Projects like this latest from Dalmia Cement are overdue, but are very encouraging.

Forgive the poor image quality but our magazine editor Peter Edwards spotted this provocative graphic (above) at the Federación Interamericana del Cemento (FICEM) technical congress that is taking place in the Dominican Republic this week. It came from a presentation given by Yassine Touahri from On Field Investment Research. The reason this slide raises eyebrows is because it seems to inversely link CO₂ emission regulations with cement grinding capacity growth.

One would expect integrated or clinker production capacity addition to decline in the face of various carbon taxes because the majority of emissions in cement production are process emissions. Yet this graphic suggests that it goes further by affecting the supply of clinker in these regions. If correct then it supports the argument that introducing carbon taxes forces related capacity investment to go elsewhere. In other words, if governments try to control industrial CO₂ emissions, then the market will follow the path of least resistance. The world has a clinker production capacity surplus and the countries with no CO₂ regulations are scooping it up.

The counter argument is that capacity growth and CO₂ legislation is unrelated. The regions with flat or falling grinding capacity additions are the places were this trend is occurring anyway for other reasons. These areas have built their houses and infrastructure and so one would expect no or low capacity growth. In this environment it is easier to introduce CO₂ laws because, rightly or wrongly, it is perceived to be less important to the overall economy. Meanwhile, outside of these zones national economies are growing: they want to build things and new grinding plants to take advantage of a global glut of clinker are helping them to do this.

Other issues with this graphic are the widely different reasons for low cement grinding capacity growth in the areas with CO₂ legislation. Europe, for example, has endured the European Union (EU) Emissions Trading Scheme (ETS) for over a decade and it has seen growth in the slag-cement grinding model in some countries in recent years. General trends have also seen a considerable drop in production capacity in Southern Mediterranean countries as their export markets decline. China is actively trying to manage a reduction in production capacity following a period of unparalleled growth. CO₂ legislation is one potential means to do this.

The next step here would be to model the effect of a carbon tax on a developing market, which is genuinely growing its cement consumption, compared to a more mature one. This might help to answer whether economic development can be untangled from carbon emissions. CO₂ regulations are undoubtedly distorting cement markets though. Touahri is right when he says that, “CO₂ management will be the key challenge for the cement industry in the 21st century.” Once it is given a value then it changes the nature of the business.

There will be a full review of the FICEM technical congress 2019 in a future issue of Global Cement Magazine

The UK waste fuels industry is facing potential challenge from changing Dutch environmental legislation. As part of its new National Climate Agreement the government in the Netherlands is considering imposing a tariff of Euro32/t on imported refuse-derived fuel (RDF) from the start of January 2020. It also wants to add a CO2 tax of Euro30/t on industrial emitters from the start of 2021.

This is bad news for the UK’s waste export market because 1.28Mt or 44% of exported waste fuels from the UK in 2018 went to the Netherlands. The majority of this was RDF. That was more than the next two biggest destinations, Sweden and Germany, combined. Andy Hill of Cynosure Partners summed up the UK situation in the June 2019 issue of Global Cement Magazine when he said, “The UK generates more far more waste than it has landfill, recycling and alternative fuel capacity combined. Quite simply, that’s why the UK exports and has become a leading force in Europe in terms of RDF and solid recovered fuel (SRF) exports.”

Graph 1: International Waste Shipments exported from England, 2011 – 2018. Source: UK Environment Agency.

Graph 2: Destinations of English waste fuels exports in 2018. Source: UK Environment Agency.

Waste management companies and their representative associations on both sides of the North Sea are not taking this terribly well. Robert Corijn, chair of the RDF Industry Group, a European waste organisation, summed up his members response by pointing out both the environmental cost of the new legislation and the risk to jobs in the UK. “RDF export forms a vital and flexible part of the UK’s waste management system, supporting over 6800 additional jobs in the UK, and saving over 0.7Mt/yr CO₂e emissions.” Robert Loos of the Dutch Waste Management Association made a similar response questioning what exactly the Dutch government was attempting to achieve.

Steve Burton, one of the directors of UK-fuels producer Andusia, went further by saying that the Dutch had proposed the move on environmental grounds because it has an incineration capacity of 8Mt/yr but produces only 6Mt/yr of waste. “So they think that by setting a tax it will significantly curtail how much gets incinerated in the Netherlands and thus produce less CO₂. All very sensible if you consider CO₂ in isolation in your own country. However, the Dutch Government aren’t looking at the bigger picture…” He then went on to point out that the RDF would then either get burnt elsewhere or landfilled resulting in no overall CO₂ emissions reduction. His further assessment, which you can read here, goes on to speculate amongst other things that Dutch Energy for Waste (EFW) plants could end up having to cut their gate fees by more than the import tariff in order to keep running. The state-owned EFW plants would then made a loss for the tax payers until the market stabilised. It should be noted that the data from the Environment Agency indicates that Andusia exported just under 38,000t of RDF to the Netherlands in 2018.

The more prickly issues of using waste fuels may prove tricky for Dutch legislators. Corijn’s distinction above of using CO₂e for the savings from RDF usage is important in this argument since burning RDF and alternative fuels, either for generating energy or making cement, still releases CO₂. In the European Union (EU) it’s the biomass fraction of RDF that’s important for the Emissions Trading Scheme (ETS) and the like because biomass emissions are counted as carbon-neutral. Remove this effect and the benefit of waste fuels are more to do with the waste hierarchy and reusing materials rather than leaving them to rot and release methane, a gas with a more potent global warming effect than CO₂. Despite this, at face value, importing rubbish and then burning it to release yet more unwanted CO₂ may seem nonsensical to the parliamentarians. Perhaps the other thing they should consider is that waste-derived fuels are manufactured products to set specifications. On-going arguments around the world about the developed world ‘exporting its rubbish’ frequently ignore this point.

Since the new Dutch National Climate Agreement is currently at the proposal stage it has a long way to go before it becomes law. First it has to be turned into legislation and then this has to be approved by the Dutch Parliament. As indicated so far the waste management industry will continue to fight its corner with vigour.

Ireland: Local environmental activists have accused the Irish Environmental Protection Agency (EPA) of ignoring European Union (EU) NO_x emission limits by granting an exemption to Irish Cement’s Limerick integrated plant. Limerick Against Pollution group alleges that the plant has been allowed a limit of 800mg/m3 despite a EU directive reducing the limit to 500mg/m³, according to the Limerick Post newspaper.

Belgium: WindEurope, the European Chemical Industry Council (CEFIC) and the European Composites Industry Association (EUCIA) have created a cross-sector platform to look into using glass fibres and fillers from old wind turbine blades as a raw material for cement production. Other methods, such as a mechanical recycling, solvolysis and pyrolysis, are being developed and considered.

In 2018 wind energy supplied 14% of the electricity in the European Union (EU), from 130,000 wind turbines. Wind turbines blades are made up of a composite material, which boosts the performance of wind energy by allowing lighter and longer blades. At present 2.5Mt of composite material are in use in the wind energy sector. In the next five years 12,000 wind turbines are expected to be decommissioned.

“Wind energy is an increasingly important part of Europe’s energy mix. The first generation of wind turbines are now starting to come to the end of their operational life and be replaced by modern turbines. Recycling the old blades is a top priority for us, and teaming up with the chemical and compositors industries will enable us to do it the most effective way,” said Giles Dickson, the chief executive officer (CEO) of WindEurope.

There was a glimmer of good news visible through the Delhi smog this week with the launch of a market-based emissions trading scheme (ETS) for particulate matter (PM). A pilot has started at Surat in Gujarat. The scheme will apply to 350 industries in the locality and it will be scrutinised for wider rollout in the country.

China robustly started to tackle its industrial PM emitters a few years ago although the work remains on-going. In its wake India has increasingly made the wrong sort of headlines with horrifically high dust emissions. Delhi, for example, reportedly had PM2.5 emissions of over 440µg/m³ in January 2019. To give this some context, the World Health Organisation’s (WHO) annual upper guideline figure for safe human exposure is 10µg/m³. Research by the Financial Times newspaper suggested that more than 40% of the Indian population is subject to annual PM2.5 emissions of over 50µg/m³.

Air Quality Life Index (AQLI) research reckons that if India were able to meet its national PM2.5 standard of 40µg/m³ then its population would live 1.8 years longer or 4.3 years longer if it met the WHO guideline level. The current situation is an unnecessary tragedy. In strictly structural terms the country’s productivity is being thrown away by damaging the health of its workforce. For comparison amongst other major cement producing countries, AQLI data placed China’s PM2.5 emissions at 39µg/m³, Indonesia at 22µg/m³, Vietnam at 20µg/m³ the US at 9µg/m³. These figures cover all industries in different conditions and climates. If the US can do it, why not the others?

Back on trading schemes, the famous ETS at the moment is the European one for CO₂ emissions. Similar schemes are slowly appearing around the world as governments look at what the European Union (EU) did right and wrong. For example, South Africa started up a carbon tax in early June 2019. Yet as the supporting documents by the Gujarat Pollution Control Board (GPCB) point out there have been a variety of ETS systems’ over the years. The US’s Acid Rain Program is generally seen to have achieved significant reductions in SO2 and NOx emissions although the National Emission Standards for Hazardous Air Pollutants (NESHAP) has continued this work. Chile even ran its own PM ETS in the 1990s although the outcomes have been disputed.

One problem with a CO₂ ETS, and anthropomorphic or man-made climate change in general, is that it is intangible. Even if sea levels deluge major coastal cities, rising mean temperatures reduce agricultural yields and human populations contract sharply, people will still be arguing over the research and the causes. The beauty of a PM ETS is that if it works you can literally see and feel the results. A famous example here is the UK’s Clean Air Act in the 1950s that banished the fog/smog that London used to be famous for.

The Gujarat PM ETS is a pilot, the results of which will be considered by researchers from a number of US-based universities and the Abdul Latif Jameel Poverty Action Lab. Explicitly, the study plans to use a randomised control trial to compares its results against the command and control style approach used in the rest of the country. On the cement-side various Indian news stories have emerged as state pollution boards have increasingly started fining producers for emission limit breaches. Clearly the government is taking dust emissions seriously. Reduction is long overdue.

There were two main takeaways from the Global Future Cement Conference that took place in Brussels last week. Firstly, there are not any obvious alternatives to using cement and concrete. Secondly, serious at-scale commercial investment on capturing CO₂ process emissions from clinker production is still waiting for the right economic conditions.

Graph 1: Embodied energy versus embodied CO₂ of building materials. Source: Hammond & Jones, University of Bath, UK.

Although the conference was heavily focused on Europe, the graph above explains why the cement and concrete industries are sitting pretty right now in the face of mounting environmental activism. The sector may be responsible for 5 - 10% of annual CO₂ emissions but, put bluntly, there is simply no alternative. As Karen Scrivner from the Ecole Polytechnique Fédérale de Lausanne (EPFL) explained during her presentation, concrete uses some of the most abundant minerals present on earth, notably silicon and calcium. Alternative chemistries are simply not backed up by available materials. The cement and concrete associations have strongly promoted the unique position by focusing on the whole lifecycle of building materials.

The energy and emissions research needs to be scrutinised much more closely but, if it’s correct, there is no way to maintain modern standards of living without concrete. And, judging from the response by the French public to a badly handled meagre carbon tax on diesel by the so-called Yellow Vest movement, whacking up the price of housing or infrastructure might go down badly, especially in developing countries.

Two immediate ‘outs’ presents themselves. Cement doesn't necessarily have to be made from clinker as Robert McCaffrey’s presentation reinforced (also given at the IEEE/IAS-PCA Cement Conference this year). Future research may find alternatives to clinker and wipe out the cement business in the process. Also, the graph above is based on per kilogramme amounts of each building material. It doesn’t indicate how much of each material is required to build things. Even if clinker-based building materials are irreplaceable, there is no reason why their market share might not decrease. This could have large consequences in a market already burdened by over-capacity.

Graph 2: Comparison of cost of carbon capture technology for the cement industry. Source: European Cement Research Academy (ECRA).

Solid research into carbon capture technology is proceeding apace, from the LEILAC project at HeidelbergCement’s Lixhe plant, to oxyfuel kiln development and other methods, as Jan Theulen from HeidelbergCement demonstrated in his presentation. Off-the-shelf technologies from other industries also exist ready to be used. Today, for example, Inventys has announced plans to test its own CO₂ capture technology with Lafarge Canada. Yet there are no commercial-scale installations in Europe. most likely due to the price burden it would place on the end product.

With the European Union (EU) Emissions Trading Scheme (ETS) entering its fourth phase and the carbon price holding above Euro20/t the question is: when will the serious investment begin in Europe? Notably, more than a few major European cement equipment manufacturers attended the Global Future Cement Conference, yet none are offering mature products to capture CO₂ emissions. Most or all have projects up their sleeves ready to be developed and sold but orders aren’t being received. The carbon price in Europe is the problem here. If it's too low then nothing happens outside of government subsidy. Too high and cement plants start being shut down because they become too expensive to run. To be fair to the cement sector other carbon emission mitigation strategies are being employed from alternative fuels usage to lowering the clinker factor and other methods but the endgame is based on reducing process emissions.

The challenge for the cement and concrete industry is to show legislators that their materials are essential and irreplaceable. They are doing this. The legislators then need to concoct ways of encouraging mass scale rollout of carbon emissions abatement technology without destroying the cement industry. This is far from certain right now. If nothing else it’s in governments’ interest to get this right because, as the Yellow Vest protests show, if they get it wrong their voters become angry. All of this is happening against the clock as CCU/S is required to get the cement industry past the 2050 2°C maximum warming target set by the Paris Agreement. In the meantime the cement industry is essentially in a holding position on the more far-reaching aspects of CO₂ emissions mitigation. Its products are likely irreplaceable but its carbon capture technology has to be encouraged by governments. This means that, for most cement producers, waiting to see what happens next is the way forward.

The 3rd Future Cement Conference and Exhibition is scheduled to take place in Vienna, Austria in 2021

The European Union’s (EU) verified CO₂ emissions figures were released earlier this week on 1 April 2019. The good news is that no cement plant is within the top 100 largest emitters. All the top spots are held by power plants, iron and steel producers and the odd airline. Indeed, out of all of the verified emissions, cement clinker or lime production only represents 7% of the total emissions. Of course this is too much if the region wants to meet its climate change commitments but it is worth remembering that other industries have a long way to go as well and they don’t necessarily face the intrinsic process challenges that clinker production has. If the general public or governments are serious about cutting CO₂ emissions then they might consider, for example, taking fewer flights with airlines before picking on the cement industry.

The EU emitted 117Mt of CO₂ from its clinker and lime producers in 2018, a 2.7% year-on-year decrease compared to 120Mt in 2017. This compares to 158Mt in 2008, giving a 26% drop in emissions over the decade to 2018. However, there are two warnings attached to this data. First, there are plants on this list that have closed between 2008 and 2018. Second, there are plants that provided no data in 2018, for example, all the plants in Bulgaria. Climate change think tank Sandbag helpfully pointed out in its analysis of the EU emissions data that industrial emissions have barely decreased since 2012. The implication here being that the drop from 2008 to 2012 was mainly due to the economic recession. Sandbag also made the assertion that 96% of the cement industry’s emissions were covered by free allocations in the EU Emissions Trading Scheme (ETS) thereby de-incentivising sector willingness to decarbonise.

By country the emissions in 2018 from cement and lime roughly correspond with production capacity, although this comes with the caveat that emissions link to actual production not potential capacity. So, Germany leads followed by Spain, Italy, Poland and France. Of these Poland is a slight outlier, as will be seen below.

Table 1: Top 10 CO₂ emitting plants in the European Union in 2018. Source: European Commission.

Poland leads the count in the top 10 EU CO₂ emitting cement plants in 2018 with five plants. Greece follows with two plants. This list is deceptive as all of these plants are large ones with production capacities of 2Mt/yr and above. As it contains many of the largest plants in the EU no wonder the emissions are the highest. It is also worth considering that there are far larger plants outside of the EU.

In summary, as most readers will already know, the cement industry is a significant minority CO₂ emitter in the EU. Countries with larger cement sectors emit more CO₂ as do larger plants. So far, so obvious. Emissions are down since 2008 but this mostly seems to have stalled since 2012, bar a blip in 2017. The change though has been the rising carbon price in the EU ETS in 2018. Coincidentally the carbon price has been fairly low and stable since 2012. If the mechanism is working properly then changes should start to appear in 2019. Already in 2018 a few European cement producers announced plant closures and blamed the carbon price. Watch this space.

The Global Future Cement Conference & Exhibition on low and zero CO2 cement production will take place in Brussels, Belgium on 22 - 23 May 2019

Spain: Oficemen the Spanish cement association has blamed falling cement exports in 2018 on rising electricity and CO₂ emissions prices. The association said the European Union CO₂ price tripled to Euro24.60/t at the end of 2018 from Euro7.80/t at the start of the year, with an average price of Euro16.00/t of cement. Exports fell by 12% year-on-year to 8.1Mt in the 11 months of the end of November 2018. Cement consumption grew by 8% year-on-year to 13.4Mt in 2018. It forecasts growth of 3 – 6% in 2019.

More details from HeidelbergCement this week on its divestment strategy. It has sold its half-share in Ciment Québec in Canada and a minority share in a company in Syria. A closed cement plant in Egypt is being sold and it is working on divesting its business in Ukraine. Altogether these four sales will generate Euro150m for the group. Chairman Bernd Scheifele said that the company expects to rake in Euro500m from asset sales in 2018. It has a target of Euro1.5bn by the end of 2020.

In purely cement terms that is something like seven integrated plants. So the usual game follows of considering what assets HeidelbergCement might consider selling. The group offered a few clues in a presentation that Scheifele was due to give earlier this week at the Commerzbank German Investment Seminar in New York.

First of all the producer said that it was hopeful for 2019 due to limited energy cost inflation, better weather in the US, the Indonesian market turning, general margin improvement actions and sustained price rises in Europe. It then said that its divestments would focus on three main categories: non-core business, weak market positions and idle assets. The first covers sectors outside of the trio of cement, aggregates and ready-mix concrete. Things like white cement plants or sand lime brick production. Countries or areas it identified it had already executed divestments in included Saudi Arabia, Georgia, Syria and Quebec in Canada. Idle assets included depleted quarries and land.

The first obvious candidate for divestment could be the company’s two majority owned integrated plants in the Democratic Republic of Congo. These might be considered targets due to the political instability in the country. However, this is balanced by the potential long-term gains once that country stabilises. Alternatively, some of the plants in Italy seem like a target. The company had seven integrated plants, eight grinding plants and one terminal in 2018.

The presentation also pointed out the sharp rise in European Union (EU) Emissions Trading Scheme (ETS) CO₂ emissions allowances, from around Euro5/t in 2017 to up to Euro20/t by the end of 2018. In late 2018 Cementa, a subsidiary of HeidelbergCement in Sweden, said it was considering closing Degerhamn plant due to mounting environmental costs. The group reckons it can fight a high carbon price through consolidation, capacity closure, higher utilisation, limited exports and pricing. It also pointed out that it is a technology leader in carbon reduction projects. It will be interesting to see how environmental costs play into HeidelbergCement’s divestment decisions.

Finally, a tweet by Sasja Beslik, the head of sustainable finance at Nordea, flagged up a few cement companies as being the worst companies for increasing CO₂ emissions between 2011 and 2016. HeidelbergCement was 19th on the list after LafargeHolcim and CRH. Sure, cement production makes CO₂ but it’s far from clear whether the data from MSCI took into account that each of these companies had expanded heavily during this time. In HeidelbergCement’s case it bought Italcementi in 2016. Cement companies aren’t perfect but sometimes there’s just no justice.