Displaying items by tag: Sustainability

Australia’s Climate Change Minister announced plans this week to look at a potential carbon border adjustment mechanism (CBAM). Chris Bowen told an Australian Business Economists forum in Sydney that policies were needed to ensure a level playing field for Australian firms. Mentioning the European Union’s (EU) CBAM by name, he said that his department would prepare a review to assess carbon leakage risks, develop policy options and look at the feasibility of an Australian CBAM, particularly in relation to steel and cement.

The Antipodean nation has past form when it comes to carbon legislation. Back in 2012 it introduced the Clean Energy Act under the Gillard administration. The legislation was intended to introduce an emissions trading scheme with a carbon pricing scheme. However, it faced opposition from rival political parties and the Cement Industry Federation warned that the local cement sector was vulnerable to overseas competitors outside of the scheme. Job losses followed and Adelaide Brighton appeared to react by focusing more on imports. The Abbott administration then abolished the act in 2014 putting forward its Clean Energy Future package instead, which focused more on investing towards change. Jump forward nearly a decade and the Albanese government passed its Climate Change Bill in 2022. This set legally binding targets, including a commitment to cut CO2 emissions by 43% from 2005 levels by 2030. Bowen’s look at a CBAM is an obvious next step from here, addressing one of the main criticisms of the previous Clean Energy Act.

Local building materials company Boral reacted positively to a CBAM in its annual results released earlier this week with chief executive officer Vik Bansal saying that the company was “...advocating for an effective Carbon Border Adjusted Mechanism for Australia.” He also reconfirmed the group’s commitment to a target of net zero emissions by 2050. However, at the same time, Boral also reduced its emissions reduction target to 2025 from 2019 figures to up to 14% from 19% previously. This was blamed on “external factors” such as delays in securing the required regulatory approvals for the next phases of an alternative fuel program. Mining company Rio Tinto also warned in late July 2023, as part of its half-year financial results, that it might potentially miss its emissions target for 2025 unless it resorted to buying carbon credits.

CBAMs became serious in 2023 when the EU passed its own scheme into law in May 2023. The EU CBAM will now enter into a transitional phase from 1 October 2023 until the end of 2025. During this period importers of goods covered by the legislation will be required to report greenhouse gas emissions (GHG) embedded in their imports (direct and indirect emissions) but they will not have to make any financial payments or adjustments. The system will then enter its full format from 1 January 2026, with affected importers being forced to purchase and surrender CBAM certificates, which will be priced at the EU emission trading scheme (ETS) rate, currently at around Euro88/t. Other CBAMs have also been mooted in Canada and the US. In Canada the government ran a consultation on border carbon adjustments in 2021. It is currently considering its next steps. The US meanwhile has had both Republican and Democrat party senators make separate suggestions for a CBAM since at least 2021.

Just because the EU is set to implement its CBAM and other countries are considering their own versions doesn’t mean that they are necessarily a good idea. Cembureau, the European cement association, has been steadily lobbying on the details such as indirect emissions and waste incineration in the EU CBAM for years. Criticisms of CBAMs in general include potential clashes with World Trade Organisation rules, accusations of protectionism, triggering inflation, not being equitable to less developed nations and even failing to stop carbon leakage in the first place. The EU CBAM has also linked itself to the local ETS price. So, even after the transitional period, the carbon price may start to jump about in unpredictable ways once the system fully goes live in 2026.

The game-changer in recent years for international carbon emissions reduction legislation though was arguably when the US government introduced its Inflation Reduction Act in 2022. This is because it served both sustainability and self-interest on a grander scale than seen previously. The act promised US$369bn in subsidies for companies to invest in low carbon technology. However, the catch was that the investment tied supply chains to the US market, much to the ire of some of the US’ trade partners such as the EU. CBAMs offer a similar opportunity to governments around the world if they choose. They can be used to protect domestic carbon emission reduction effects in heavy industry but they can also be used for protectionism. Hence Bowen was due to say during his speech that the Inflation Reduction Act and other policies elsewhere “mean that Australia needs to act to stay in the game.” Australia has the advantage that it can watch how the EU CBAM pans out before it implements its own version.

Vietnam: The government has launched a public consultation over a proposed environmental protection fee. The Vietnam Investment Review newspaper has reported that the proposed policy would require emitters of dust, NO_x, sulphur oxides and carbon monoxide, including cement plants, to pay a basic fee of US$127/yr. Additional variable rates of US$0.02 – 0.03/t would apply to emissions of each of the pollutants. If it enters into force, the regulation will require cement plants to submit quarterly fee declarations to the government. The government says that the policy aims to encourage investment in emissions mitigation technologies.

Taiwan: Asia Cement Corporation won one gold and two bronze awards at the Taiwan Sustainable Action Awards 2023. The company’s Lighting Up the Beauty of the Tribe with Warmth and Heart outreach initiative won gold, while its Coping with Climate Change through Public-Private Collaboration contraband co-processing initiative and Promoting Low-Carbon Cement for a Better Net-Zero Scenario initiative for the development and application of low-carbon cement both won bronze.

Executive Vice President Doris Wu said “Every sustainable goal has corresponding action plans. Only through persistent endeavour, focus and work from all different perspectives can impossible tasks be turned into concrete objectives.”

Australia: The Ministry of Climate Change, Energy, the Environment and Water is holding a consultation over the possible implementation of a Cross-Border Adjustment Mechanism to penalise imported cement for its CO₂ emissions in line with the Australian cement industry’s emissions reduction goals. The Guardian Australia newspaper has reported that the government expects to publish its report on the policy in mid-late 2024. The government began implementing new CO₂ emissions limits for Australia’s 200 largest industrial emitters in July 2023. It expects these to eliminate 200Mt-worth of CO₂ emissions over the period up to 2030. Climate Change and Energy Minister Chris Bowen said “80% of these companies, and 86% of covered emissions, are covered by corporate net zero commitments.” Australia is committed to net zero CO₂ emissions by 2050.

With regard to the proposed Cross-Border Adjustment Mechanism, Bowen said “It’s a potentially important mechanism to ensure domestic sovereign capability and supply. One of the biggest challenges we face is supply-chain crunches, and any measure which helps us deal with that is a positive thing for the transition.”

Spain: Switzerland-based Synhelion and Cemex España plan to build a new clinker plant near Madrid. The plant will use Synhelion’s synthetic fuel to produce clinker from clay and crushed sand at 1200°C. The fuel consists of a gas produced from green hydrogen and captured CO₂, using solar heat. La Tribune de Genève Online News has reported that Synhelion’s thermochemical reactor further helps to capture CO₂ emissions from clinker production. A study by the Swiss Federal Institute of Technology Lausanne indicated that this can halve the cost of carbon capture at cement plants, to below Euro85/t.

Canada: Lafarge Canada says that it successfully integrated 10,000t of recycled concrete waste in cement production at its St. Constant cement plant in Quebec using its ECOCycle Technology process. The year-long production trial constituted the first phase of Lafarge Canada’s pilot of ECOCycle Technology. The producer says that the achievement solidifies its leading position in North American circular construction innovation. Waste360 News has reported that concrete constitutes 4Mt (40%) of Canada’s 10Mt annual generation of construction and demolition waste.

President and CEO David Redfern said “By reusing construction and demolition wastes in the production of new building materials, we are reducing waste sent to landfill. Across Lafarge Canada, we’re evaluating any opportunity to decarbonise our operations, and circularity is part of this effort. This pilot is critical to demonstrate that we can effectively repurpose concrete waste, which goes a long way to conserve our naturally occurring resources and loops in construction sustainability - building new from old.”

Colombia: Holcim (Colombia) says that it has achieved 100% coverage of its cement and concrete range with environmental product declarations (EPDs).

CEO Marco Maccarelli said "This is in line with our global commitment to be a zero carbon company, and a vision of what we can contribute to sustainable construction in Colombia and the world.” He added "We want this new step we are taking to not only have a positive impact on the work of our customers, but also to contribute to sustainable construction, to obtaining environmental certifications for buildings and to inspiring the entire industry to work towards a more sustainable world today and in the future."

Thailand: Siam Cement Group (SCG) recorded sales of US$7.22bn in the first half of 2023, down by 17% year-on-year from US$8.69bn. Cement and building materials accounted for US$2.6bn (36%) of sales, behind chemicals at US$2.74bn (38%). The company's earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 24% to US$915m from US$1.21bn. Meanwhile, its profit excluding extra items dropped by 49% to US$279m from US$543m. Cement and building materials contributed 78.5m (28%) of group profit, down by 38% from US$126m (23%).

During the first half of 2023, sales of alternative CEM-I and CEM-II cement rose above 50% of SCG's cement sales for the first time, compared to 41% throughout 2022. The group substituted 22% of all cement fuel with alternative fuel (AF) across its operations, and 22% of cement fuel in its Thai domestic business. SCG invested US$91.5m in capital expenditure in its cement and building materials business throughout the first half of 2023.

Australia: James Hardie has published its Sustainability Report 2023, recording its progress towards achieving its sustainability goals up to the end of the 2023 financial year on 31 March 2023. The producer's Scope 1 and 2 CO₂ emissions dropped by 26% compared to 2019 levels, against a new target of a 42% drop by 2030. Environmental product declarations (EPDs) covered 94% of its sales, ahead of a target for the year of 80%. The company launched a new goal to include 30% minority-identified people in its US management.

Chief sustainability officer and vice president, environmental social and governance, Jill Kolling said “Sustainability is a continuous journey, but a necessary one to drive value for our stakeholders, while delivering on our ambition to be a more resilient company. From our boardroom to our manufacturing plants, we are giving sustainability a place at the table to drive meaningful impact and instill accountability across all facets of our organisation.”

Sweden: CemVision has reported the successful conclusion of a large-scale production pilot of its ultra low carbon alternative clinker. CemVision produces the clinker using up to 100% recycled industrial secondary materials from the steel and mining sectors. CemVision says that its production process heats the raw materials using renewable electricity, and without the use of fossil fuels. The alternative clinker offers CO₂ reductions of up to 100% compared with ordinary Portland cement (OPC) clinker. CemVision has opened an invitation to possible collaborators to help scale up production, with a target of hundreds of thousands of tonnes per year.

Chief technical officer Claes Kollberg said "We are a climate-first company, making high performance cement. With our competence and experience, it is our duty to produce the most environmentally friendly cement for each application."