Displaying items by tag: target
Germany: HeidelbergCement has detailed how it uses bonuses to ensure country and cement plant managers achieve their CO2 reduction targets. Chief financial officer Lorenz Näger explained to financial analysts following the publication of the group’s fourth quarter results for 2020, that a plant’s annual reduction target is calculated against the group-wide ‘525 by 2025’ target of CO2 emissions of 525kg/t of cementitious material by 2025. Plant performance against this is multiplied with a financial target to determine a manager’s bonus. This enables for the enlargement of bonuses at financially well-performing plants which exceed their emissions reduction targets. A similar mechanism is also used for country managers. Näger called the incentive mechanism a ‘step-changer.’
Vicem launches 2021 cement targets
11 January 2021Vietnam: The Vietnam National Cement Corporation (VICEM) aims to increase cement production by 1% year-on-year to 22Mt in 2021. The Viet Nam News newspaper has reported that the company is targeting a sales increase of 7% to US$1.5bn and a profit increase of 13% to US$99m. The company says that it expects domestic cement consumption to rise by 5% to 30Mt.
The group has set out six solutions by which to achieve its goals: continue to ‘optimise and improve production capacity’ through promoting research and application of advanced science and technology, focus on ‘investment in depth,’ reduce consumption, use resources economically and reduce environmental impacts throughout the supply chain.
VICEM chair Bui Hong Minh said, “Implementing the comprehensive restructuring project of the corporation in the period of 2019 - 2025 approved by the Ministry of Construction, VICEM is focussing on promoting innovation and creativity to bring new development space and motivation to the Bim Son Cement unit in particular and the cement industry in general.”
In 2020 VICEM increased its full-year profit by US$30m.
Spanish cement industry targets 43% emissions drop by 2030
24 December 2020Spain: The Spanish cement association Oficemen has targeted a 43% emissions drop by 2030 across its entire value chain compared to 1990 levels. The objective has been published as part of the association’s sustainability roadmap to 2050. It is a tightening of the previous target of 27% by 2030. Oficemen intends to meet the tougher reduction by using the so-called 5C approach - clinker, cement, concrete, construction and built environment, and (re)carbonation – as detailed by Cembureau, the European Cement Association. Oficemen also revealed that it is working with the Spanish Technological Platform for CO2 (PTECO2) on identifying potential locations for storing captured CO2. Hugo Morán, Secretary of State for the Environment, participated remotely with the launch event.
Oficemen also reports that Spanish cement consumption fell by 12% year-on-year to 12.2Mt in the first 11 months of 2020. Exports declined by 5%.
LafargeHolcim launches sustainability-linked bond for Euro850m
18 November 2020Switzerland: LafargeHolcim has launched a Euro850m sustainability-linked bond with a coupon of 0.5% maturing in 2031. It says it is the first bond of its kind in the building materials industry and that it is part of its commitment to reach its 2030 CO2 reduction target.
“We are proud to be the first in our industry to launch a sustainability-linked bond. The order book of Euro2.6bn demonstrates the confidence of investors in the company’s financial strength, strategy and ability to deliver on its sustainability targets,” said Géraldine Picaud, Chief Financial Officer of LafargeHolcim.
Bond investors will be entitled to a higher coupon should the company not meet its objective, incentivising LafargeHolcim to reach its target of 475kg net CO2 per tonne of cementitious material by 2030.
Dalmia Cement signs Near-Zero pledge
25 September 2020India: Dalmia Bharat subsidiary Dalmia Cement has joined five leading companies of other sectors in signing the Near-Zero pledge, an industry charter targeting “near-zero carbon dioxide (CO2) emissions by 2050” at the virtual Climate Week NYC. The Times of India newspaper has reported that the pledge consists of a commitment to “undertake carbon sequestration efforts, if needed, and set reporting indicators and targets to enable tracking of corporate goals on the decarbonisation pathway.”
Dalmia Cement urged national governments to “positively enforce targets for efficiency, emissions reduction and circular economy to make carbon neutrality by 2050 a reality.”
The race to zero
23 September 2020Cemex last week. HeidelbergCement and LafargeHolcim this week. China yesterday. One can’t seem to move for major building materials companies (or their owners) issuing carbon neutral strategies at the moment. This week HeidelbergCement first launched its ‘Beyond 2020’ plan, a mixture of financial, portfolio and sustainability goals. Then, LafargeHolcim said that it had signed a pledge with Science-Based Targets (SBT) towards meeting intermediate targets by 2030. Last night, President Xi Jinping told the United Nations (UN) General Assembly in New York that China was aiming to hit peak emissions before 2030 and carbon neutrality by 2060.
The timing of these various sustainability goals are directly or indirectly linked to Climate Week NYC, a notable annual event on the climate change calendar that is taking place at the moment. So it’s a good time for large-scale industrial CO2 emitters, like building material producers, to have something positive to say.
China’s announcement steals the limelight given that the country produces around half of the world’s cement and holds a higher share of clinker production capacity. Western media has pointed out the geopolitical implications of Xi’s statement that was delivered shortly after a speech by US president Donald Trump, a notable climate change sceptic. Xi’s speech didn’t contain any details so it may simply have been an attempt to demonstrate global leadership. Yet if the Chinese government makes a go of it, the effect could be profound. Data from the Centre for International Climate and Environmental Research (CICERO) shows that the Chinese cement industry emitted an estimated 782Mt CO2 in 2018 compared to 1.50Gt CO2 from the cement industry globally and 37.1Gt CO2 from all human-related sources. In other words, the Chinese cement industry was responsible for 2% of all CO2 emissions in 2018. And this industry is mostly owned by a government that has just publicly declared a carbon neutral target.
In some ways the other announcements, by the western-based multinational building material companies, are even more radical since these producers are subject to market forces. These companies don’t have to do this. They also contain more specifics than Xi’s words so far.
HeidelbergCement says it has brought forward its CO2 emissions target for 2030 of 525kg CO2/t (specific net CO2 emissions per tonne of cementitious material) to 2025. That’s a 30% decrease from 752kg CO2/t in 1990. Its new goal for 2030 is below 500kg CO2/t. The main emission reduction methods it outlines include: increased use of alternative raw materials and fuels; increased use of secondary cementitious materials to reduce the clinker factor of cement; investment in plant efficiency and CO2 reduction at the plant level; and increased share of low-carbon concrete products.
Chart 1: HeidelbergCement’s path to net carbon zero concrete: Source: Leading the way to carbon neutrality, HeidelbergCement.
Chart 1 above outlines HeidelbergCement’s thinking post-2030 with further reductions to CO2 emissions mainly achieved through circular economy methods and different carbon capture techniques. Two points to hold in mind here. One: note the current uncertainty about which route will provide the biggest share of the reduction. Two: this chart considers concrete, not cement.
LafargeHolcim’s announcement was that it has joined Science Based Targets initiative (SBTi) ‘Business Ambition for 1.5°C.’ It says that by doing so it has become the first global building materials company to sign the pledge with intermediate targets for 2030, validated by SBTi. This is slightly confusing given that other building materials companies have had different dealings with the SBT as it has worked towards its current scheme. Earlier this month, for example, we reported that Taiwan Cement had started an SBT project in 2019 and had some targets approved by the SBTi in June 2020. Grupo Cementos de Chihuahua (GCC) said it was joining SBTi at the start of 2020 and HeidelbergCement reported its SBTi approved targets in mid-2019. Finally, India-based Dalmia Cement is also on the SBTi ‘Business Ambition for 1.5°C’ list but it is a stretch to describe it as a ‘global’ company.
The core of LafargeHolcim’s statement is a further reduced target for CO2 intensity in cement of 475kg CO2/t by 2030. So far it’s decreased its CO2 intensity by around 23% to 516 kg CO2/t in 2019 from ~730kg CO2/t in 1990. There’s less looking ahead after 2030 compared to HeidelbergCement but the measures outlined until then include: more use of low-carbon and carbon-neutral products; increased use of alternative raw materials and fuels; doubling waste-derived fuels in production to reach 37%; greater use of calcined clay and developing novel cements with new binders; and operating the company’s first net zero CO2 cement production facility.
Many of the various networks and initiatives across the climate action community came together in June 2020 as part of the UN backed ‘Race To Zero Campaign,’ an attempt to align the disparate leading net zero initiatives ahead of the 26th United Nations Climate Change Conference (COP), due to take place in November 2021 in Glasgow, Scotland. This swirl of different net zero schemes also partly explains the confusion over the different organisations backing sustainability targets that companies can sign up to. So it’s a good thing to see closer collaboration here.
More cynical readers will have latched on to president Xi’s opportunity to show up President Trump in the climate change action stakes. They may also prefer news stories about activist investors prompting change at shareholder-owned companies as they increase their portfolios or stories like Morgan Stanley’s announcement this week that it has a new commitment to reach net-zero financed emissions by 2050. If the investment bank actually means it and other financiers follow suit then the fiscal incentives for net zero draw closer and the rest should follow. Moneys talks… and hopefully CO2 stays buried in the ground.
For sustainability comparisons among the top global cement producers see the October 2020 issue of Global Cement Magazine
LafargeHolcim commits to net-zero CO2 emissions with 20% specific reduction by 2030
21 September 2020Switzerland: LafargeHolcim has signed the Science-Based Targets initiative (SBTi) Business Ambition for 1.5°C pledge, which commits it to net-zero carbon dioxide (CO2) emissions by 2050. Additionally, the company has committed itself to a 20% reduction in its CO2 intensity between 2018 and 2030.
The company says that over the period it will: “accelerate the use of low-carbon and carbon-neutral products such as ECOPact and Susteno, recycle 100Mt of waste and by-products for energy and raw materials, scale up the use of calcined clay and develop novel cements with new binders, double waste-derived fuels in production to reach 37%, reach net CO2 emissions 475kg/t of cementitious material and open and operate its first net-zero CO2 cement plant.
Chief Executive Officer (CEO) Jan Jenisch said, “I believe in building a world that works for people and the planet. That’s why we are reinventing how the world builds today to make it greener with low-carbon and circular solutions. I am very excited to be working with SBTi, taking a rigorous science-based approach to shape our net zero roadmap and accelerating our efforts to substantially lower our CO2 footprint. I will not stop pushing the boundaries to lead the way in green construction.”
HeidelbergCement presents Beyond 2020 business strategy
18 September 2020Germany: HeidelbergCement has presented a new business strategy, involving an accelerated climate action plan, called Beyond 2020. Under the Strategy, the company will aim to reduce its specific carbon dioxide (CO2) emissions by 10% to 525kg/t of cement by 2025 from 585kg/t in 2019. Its financial targets over the period are “a significant increase in earnings before interest, taxation, depreciation and amortisation (EBITDA) margin by 300 basis points and return on invested capital (ROIC) to clearly above 8%. The group says that it will target a leverage ratio between 1.5 and 2 times its result from current operations in 2020.
Chief executive officer (CEO) Dominik von Achten said, “We see climate change and digitalisation as the two central challenges of the future for society and for our company. As one of the world's leading building materials producers, we have the ambition and the innovative strength to actively shape this change in a pioneering role. At the same time, we see further optimisation potential in our plants and processes. Ecology and economy are not contradictory. Our new medium-term targets for 2025 illustrate this claim.”
Taiwan Cement awarded first product carbon footprint label
09 September 2020Taiwan: Taiwan Cement has been awarded the first product carbon footprint label by the local Environmental Protection Administration (EPA). It follows its completion of the structure of product category rules (PCR) in early August 2020 and inspection by the EPA. TCC's products will be marked with carbon footprint labels from the fourth quarter of 2020. The Taiwan-based cement producer has also announced support for the Global Cement and Concrete Association’s (GCCA) 2050 Climate Ambition plan.
TCC started its Science-Based Target project in 2019 and says it became the first cement company in the Greater China region to complete target setting and was approved by Science-Based Target initiatives (SBTi) in June 2020. Following the science-based methods promoted by the Intergovernmental Panel on Climate Change (IPCC) from the United Nations, TCC set a target to reduce carbon emissions by 11% in 2025, using 2016 emissions as the base. TCC completed carbon footprint certification for the most popular cement products, Portland Type I cement and Ready-Mixed Concrete 3000psi, in July 2020.
Uzbekistan: State-owned Uzpromstroymaterialy has announced the start of cement production at a new 0.1Mt/yr integrated cement plant, called the Qurilish Ashyo Sifat Servis cement plant, in Fergana Region following a total investment of US$25.0m. The company has reported that the new plant represents part of the country’s efforts to increase its installed cement capacity by 60% to 20.0Mt/yr in 2020 from 12.5Mt/yr in 2019.