Displaying items by tag: Sustainability

Greece: Titan Group has launched a sustainability-linked financing framework, aligning its financial strategy with its greenhouse gas emission reduction targets validated by the Science Based Targets initiative. This framework supports the company's sustainable growth ambitions under its Green Growth Strategy 2026. Future notes will fund general corporate purposes, including sustainable projects and decarbonisation efforts towards Titan’s transition to net-zero emissions.

Chief sustainability and innovation officer Leonidas Canellopoulos said “Transforming the building materials industry towards a more sustainable, net-zero future requires significant investments, with sustainable finance playing a crucial role in this transformation. The framework will enable Titan to attract a broader range of investors, including those focused on sustainable investments and ESG portfolios. Our financial and sustainability strategies are now aligned under a solid framework, further strengthening our stakeholders’ confidence and trust.”

Mexico: Veolia Mexico announced in its sustainability report that it has managed the recycling and reuse of nearly 20,000t of waste for the cement industry, as well as reducing water consumption by 15%. The company has reportedly treated 1.1Mt of solid waste and generated 22,134MWh of electricity from biogas.

Leslie Lamadrid, director of sustainability, said "This demonstrates the effectiveness of the strategies implemented and Veolia's dedication to achieving its sustainability goals."

Spain: The regional government's Ministry of Development and Environment has renewed the Emas System for environmental management at the Toral de los Vados cement plant. Initially joining the Emas system in 2018 along with 30 other companies in the region, now only 17 maintain the certification. To maintain this voluntary certification, the plant must establish yearly environmental objectives, demonstrate its commitment to achieving them and assume a commitment to continuous improvement, verified through independent audits.

Director of the cement plant Jaime Santoalla said "This certification is an endorsement of the efforts we make in terms of sustainability, as well as our commitment to the environment. We are very proud to have celebrated 100 years in the region with the aim of becoming more sustainable every day and reducing our environmental footprint."

US: The Continental Cement Davenport plant in Buffalo, Iowa, has celebrated the expansion of its facility, which now enables the reuse of post-consumer materials. This initiative will substitute approximately 50,000t/yr of fossil fuels with discarded materials that would otherwise be incinerated or sent to landfill.

Denmark: Denmark's first CO₂ storage facility is now ready to store CO₂ in the North Sea, designed for large-scale CO₂ containment to combat climate change, according to a press release from project leaders INEOS Denmark. The Project Greensand initiative has completed its pilot phase, confirming permanent CO₂ storage in the Nini West reservoir, 1800m below the seabed.

Following the pilot phase's success, the launch of large-scale CO₂ storage is expected by late 2025 or early 2026, with ambitions to store up to 8Mt/yr by 2030. An investigation is also underway to determine the possibility of storing CO₂ underground on land in Denmark, with the company obtaining an exploration licence from the Minister for Climate, Energy and Utilities earlier in 2024 for an area of Jutland in the Gassum reservoir.

Country manager at INEOS Denmark and Commercial Director at INEOS Energy, Mads Gade said “We emphasised that Denmark has moved to the forefront of CCS in the world when we stored the first CO₂ in the North Sea. Now we are in the process of investigating how to take the next step, and here we stand on the shoulders of the invaluable experience from Project Greensand's pilot. We are keen to continue this momentum with an ambition that Greensand will be the first CO₂ storage facility in operation in the EU, and we are now awaiting the Danish authorities' approval of a permanent storage. This is an important step, because if Denmark takes just 5% of a future CCS market in Europe, it could mean up to 9000 jobs, with an economic potential of US$7.4bn. At the same time, we can support the EU's objectives, because we have all the prerequisites to create a new industry that is part of the solution to the challenges of the climate.”

India: Oriana Power subsidiary TrueRE Surya has won a contract to build a 128MW solar power plant in Tamil Nadu for Dalmia Cement (Bharat), supporting its target to use 100% renewable electricity by 2030 and become carbon negative by 2040.

The project cost approximately US$62m and will be commissioned within the next 12 months, according to Energetica India Magazine. As part of the contract, Dalmia Cement (Bharat) will acquire 26% of TrueRE Surya for US$5.3m, with the transaction finalising within four to six months.

Oriana Power Chief business officer Anirudh Saraswat said “We are also humbled by the trust posed in Oriana Power’s ability to execute mega solar projects by the largest companies and are equally excited to take another big step forward in helping India meet its renewable energy goals through this partnership.”

Vietnam: Fico Tay Ninh Cement has launched ‘green-labelled’ cement with CO₂ emissions between 350-600kg/t, 70% lower than traditional Portland cement, according to Tuoi Tre News. Director of Fico Tay Ninh Cement, Nguyen Cong Bao, said that the company has invested in automated production lines and research and development to produce this ‘eco-friendly’ cement, aiming to offer it at competitive prices due to cost-saving technologies.

In addition, SCG Concrete Roof Company has introduced its own ‘green’ cement to the local market, reducing carbon emissions by 20% during production compared to traditional Portland cement.

India: Dalmia Bharat announced that its subsidiary, Dalmia Cement (Bharat), has entered into a share subscription and shareholders agreement to acquire a 26% stake in Truere Surya for US$5.3m. Truere Surya will establish a solar power project in Tamil Nadu, aligning with Dalmia Bharat’s goals to become carbon negative by 2040.

The solar project will have a capacity of 128MW. Completion of the transaction is anticipated within 4 - 6 months, pending customary conditions.

Colombia: Cemex Colombia has reported that 90% of the water used at its Santa Rosa grinding plant in 2024 to date came from non-fresh water sources, including rainwater harvesting and water recycling systems. Additionally, the plant operates with zero water discharges. UK-based Environmental Resources Management (ERM) supported the development of the current water management protocol for the plant.

The mountainous eastern shore of the Adriatic Sea and its hinterlands in Europe’s Balkan Peninsula have one of the world’s highest densities of countries: six, across a broad equilateral triangle of 212,000km². All six states – Albania, Bosnia & Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia – are historically characterised by political non-alignment, carrying over from the Cold War period, and all the more notable for the presence of the EU to the north (Croatia, Hungary and Romania) and east (Bulgaria and Greece).

A nine-plant, 9Mt/yr local cement sector serves the 16.8m-strong population of the unconsolidated ‘bloc.’ Albania has 2.8Mt/yr (31%), Serbia 2.7Mt/yr (30%), Bosnia & Herzegovina 1.6Mt/yr (18%), North Macedonia 1.4Mt/yr (15%) and Kosovo 500,000t/yr (6%), while Montenegro has no cement capacity – for now. Altogether, this gives this quarter of South East Europe a capacity per capita of 539kg/yr. The industry consists entirely of companies based outside of the region. Albania’s two plants are Lebanese and Greek-owned (by Seament Holding and Titan Cement Group respectively). Titan Cement Group also controls single-plant Kosovo and North Macedonia, and competes in the Serbian cement industry alongside larger and smaller plants belonging to Switzerland-based Holcim and Ireland-based CRH, respectively. Lastly, Bosnia & Herzegovina’s capacity is shared evenly between Germany-based Heidelberg Materials and Hungary-based Talentis International Construction, with one plant each.

Lafarge Srbija, Holcim's subsidiary in Serbia, announced plans for its second plant in the country, at Ratari in Belgrade, last week. No capacity has yet emerged, but the plant will cost €110m, making something in the region of the country’s existing 0.6 – 1.2Mt/yr plants seem likely. This would give Serbia over a third of total capacity in the Central Balkans and twice the number of plants of any other country there, expanding its per-capita capacity by 22 – 44%, from a regionally low 408kg/yr to 500 – 590kg/yr.

In announcing the upcoming Ratari cement plant, Lafarge Srbija laid emphasis on its sustainability. The plant will use 1Mt/yr of ash from the adjacent Nikola Tesla B thermal power plant as a raw material in its cement production. In this way, it will help to clear the Nikola Tesla B plant’s 1600 hectare ash dumps, from which only 180,000t of ash was harvested in 2023. Circularity has been front and centre of Holcim’s discussions of its growth in Serbia for some time. When Lafarge Srbija acquired aggregates producer Teko Mining Serbia in 2022, the group indicated that the business would play a part in its development of construction and demolition materials (CDM)-based cement and concrete.

Holcim’s Strategy 2025 growth plan entails bolt-on acquisitions in ‘mature markets,’ backed by strategic divestments elsewhere. Other companies have been more explicit about a realignment towards metropolitan markets, above all in North America, at a time when they are also diversifying away from cement and into other materials. Just why a leading producer should look to build cement capacity in Serbia warrants investigation.

Serbia is the only Central Balkan member of Cembureau, the European cement association. In a European market report for 2022, the association attributed to it the continent’s fastest declining cement consumption (jointly with Slovakia), down by 11% year-on-year. Like the rest of Europe, Serbia is also gradually shrinking, its population dwindling by 0.7% year-on-year to 6.62m in 2023, which limits hopes for a longer-term recovery. Serbia remains the largest country in the Central Balkans, with 39% of the total regional population.

Several factors have compounded Serbia’s difficulties as a cement-producing country. Firstly, like the Nikola Tesla B thermal power plant, its kilns run on coal. 50% of this coal originated in Russia and Ukraine in 2021, causing the entire operation to become ‘imperilled’ after the former’s brutal invasion of the latter in February 2022, according to the Serbian Cement Industry Association. In planning terms, this was a case of putting half one’s eggs in two baskets – and dropping them both.

Secondly, Serbia’s choice of export markets is mainly confined to either the EU or global markets via the River Danube, Black Sea and Mediterranean. Either way, it is in competition with a cement exporting giant: Türkiye. Serbia sold €19.7m-worth of cement in the EU in 2023, up by 63% over the three-year period since 2020 – 31% behind Türkiye’s €28.8m (more than double its 2020 figure).¹ One other Central Balkan country had a greater reliance on the EU market: Bosnia & Herzegovina. It exported €48.4m-worth of cement there, quadruple its 2020 figure and behind only China (€133m) and the UK (€54.7) in cement exports to the bloc by value.

Bosnia & Herzegovina’s cement industry underwent a different permutation at the start of 2024: an acquisition, replacing one EU-based player with another. Lukavac Cement, which operates the 800,000t/yr Lukavac cement plant in Tuzla, changed hands from Austria-based building materials producer Asamer Baustoffe to Hungary-based property developer Talentis International Construction. Talentis International Construction belongs to one of Hungary’s major family-owned conglomerates, Mészáros Csoport.

Besides Central Europe, Balkan countries have found a ready source of investments in the past decade in China. In construction alone, Chinese investments total €13.2bn in Serbia, €2.4bn in Bosnia & Herzegovina, €915m in Montenegro and €650m in North Macedonia.² This can be a booster shot to all-important domestic cement markets, but has some risks. Montenegro previously faced bankruptcy after Export-Import Bank of China began to call in an €847m loan for construction of the still upcoming A1 motorway in the country’s Northern Region. This did not put off the Montenegrin government from signing a new memorandum of understanding (MoU) with China-based Shandong Foreign Economic and Technical Cooperation and Shandong Luqiao Group for construction of a new €54m coast road in the Coastal Region in mid-2023.

In Montenegro, UK-based private equity firm Chayton Capital is currently funding a feasibility study for a partly state-owned cement plant and building materials complex at the Pljevlja energy hub in the Northern Region. Along with an upgrade to the existing Pljevlja coal-fired power plant, the project will cost €700m.

In 2026, EU member states will begin to partly tax third-country imports of cement and other products against their specific CO₂ emissions, progressing to the implementation of a 100% Carbon Border Adjustment Mechanism (CBAM) by 2034. Montenegro led the Central Balkans’ preparations for the EU’s CBAM roll-out with the introduction of its own emissions trading system in early 2021. Bosnia & Herzegovina will follow its example by 2026, but other countries in the region have struggled to conceive of the arrangement except as part of future EU accession agreements.

Based on the average specific CO₂ emissions of cement produced in the EU, the World Bank has forecast that exporters to the bloc will be disadvantaged if their own specific emissions exceed 5.52kg CO₂eq/€.³ By contrast, any figure below this ought to offer an increased competitive edge. Albanian cement has average emissions of 4.71kg CO₂eq/€, 15% below ‘biting point’ and 13% below Türkiye’s 5.39CO₂eq/€. Albania’s government consolidated its anticipated gains by quintupling the coal tax for 2024 to €0.15/kg. The figure is based on the International Monetary Fund’s recommended minimum CO₂ emissions tax of €55.80/t, 21% shy of the current EU Emissions Trading Scheme (ETS) credit price of €70.49/t.⁴

The Central Balkans is a region of apparently slow markets and industry growth regardless – to 11 cement plants, following the completion of current and upcoming projects. A recurrent theme of capital expenditure investments and the way investors talk about them may help to explain this: sustainability. Looking at the mix of technologies in the current nine plants, these include wet kilns and fuels lines built for conventional fossil fuels. This is not to presume that any given plant might not be happy with its existing equipment as is. Nonetheless, the overall picture is of a set of veteran plants with scope to benefit from the kind of investments which all four global cement producers active in the region are already carrying out elsewhere in Europe. Such plans may already be in motion. In late 2023, Titan Cement Group’s North Macedonian subsidiary Cementarnica Usje secured shareholder approval to take two new loans of up to €27m combined.

As the latest news from Serbia showed, taking care of existing plants does not preclude also building new ones. The cement industry of the Central Balkans is finding its position in the new reduced-CO₂ global cement trade – one in which old and new work together.

References

1. Trend Economy, ‘European Union – Imports and Exports – Articles of cement,’ 28 January 2024, https://trendeconomy.com/data/h2/EuropeanUnion/6810#

2. American Enterprise Institute, 'China Global Investment Tracker,' 3 February 2024 https://www.aei.org/china-global-investment-tracker/

3. World Bank Group, ‘Relative CBAM Exposure Index,’ 15 June 2023, https://www.worldbank.org/en/data/interactive/2023/06/15/relative-cbam-exposure-index

4. Ember, 'Carbon Price Tracker,' 26 August 2024, https://ember-climate.org/data/data-tools/carbon-price-viewer/