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European Union (very) slowly tightens the screws on its Emissions Trading Scheme
Written by David Perilli, Global Cement
22 February 2017
It looks like Cembureau, the European Cement Association, got its own way on the proposal to amend the European Union's (EU) Emissions Trading Scheme (ETS) that the European Parliament voted on last week. The system has been tightened but not enough to make the cement industry suffer, for now. Naturally, the environmentalists are outraged.
The key reform was that the carbon credits reduction rate (the linear reduction rate) will increase and the market stability reserve (MSR) will double its capacity to absorb excess allowances on the market. However, the big battle was fought over whether to include an importer inclusion scheme (or Border Adjustment Measure) or not. Lots of political 'horse-trading' took place right up to the vote on 15 February 2017 to adopt the draft proposal, with particular battles over the importer inclusion scheme. Negotiations will now continue with the Council of the European Union before the proposal returns to the European Parliament for a final vote.
Cembureau seemed pleased with the outcome. It supported the proposal principally for maintaining competitiveness and for not ‘deliberately discriminate between sectors.' It also liked the inclusion of dynamic allocation, a benchmark based on what it said was real data, a flexible reserve in relation to the allowances available for free and those designated for auctioning and an impetus towards funding carbon capture and storage. It also singled out its pleasure that an amendment for an importer inclusion scheme had not been accepted.
This last point caused a spat between Cembureau and Bruno Vanderborght, a former executive at Holcim, at the end of January 2017 in the lobbying frenzy before the vote. In robust language Vanderborght accused the European cement industry of using the ETS for negative leakage. His argument was that the free allocation of carbon credits given to the cement industry had been used to 'maximise gross margin.' Instead of spending the money on upgrading inefficient units, the industry had used its same inefficient units to increase exports of clinker to outside the EU, to places like Africa. Cembureau countered that it had been taken out of context by Vanderborght and that arguments he levelled, such as data from the Cement Sustainability Initiative (CSI) suggesting that the EU has the highest share of clinker production in old, energy-intensive installations worldwide, were misleading since CSI reporting may not be as thorough outside of Europe.
Predictably, the proposal didn't please the environmental lobby, which denounced the deal as toothless. Environmental campaign group Sandbag has been on the case of the cement industry for several years, pointing out that its own research shows that cement producers have 'abused' the free allocation scheme for profit and that emissions have actually increased under the ETS so far. Its headline figure in the wake of the vote was that the cement sector was set to rake in a surplus of allowances worth Euro2.8bn by 2030.
Following the vote Sandbag took no time to point out that the ETS carbon price had sunk below Euro5/t. In its assessment, a carbon price of least Euro50/t is required to stimulate low carbon investment. However, the carbon price soon rose back up. Little impartial analysis is available on whether the amended proposal will actually deliver its aims, although a Thomson Reuters analyst did describe the outcome as one that 'significantly tightens the market balance.'
In a final twist, the lead rapporteur for the reforms to the EU ETS is a UK member of the European Parliament (MEP). Depending on how the Brexit negotiations go, the guy marshalling the amendments to the EU ETS won't be subject to its eventual implementation.
The EU ETS is slowly starting to improve through reforms such as those voted on last week but it remains very much in doubt whether it will be able to deliver solid meaningful reductions in carbon emissions. Cembureau is rightly protecting the industry it represents but at present the price of coal appears to be a better driver of measures such as increased use of alternative fuels than the ETS. The ETS has had the misfortune in operating for the last few years throughout a market depression in Europe where it has been propping up some cement producers and now it’s helping them get back on their feet as they export their products out of the continent. In a world awash with excess clinker the policy makers are eventually going to have to decide how much they want to damage industry in order to meet their environmental aims. We need cement and we need to cut carbon emissions. Someone is always going to be unhappy in this situation.
Jagdamba Cement rebrands Ordinary Portland Cement product 22 February 2017
Nepal: Jagdamba Cement said that it has rebranded its Jagdamba Ultra Premium OPC Cement product with new packaging and appointed Bhusal Dahal as its brand ambassador. The cement producer added in a statement that its products can now compete with any international product available in Nepal, according to the República newspaper. It added that it has received NS 49, ISO 9001:2008, ISO 9001:2015/ISO 14001:2015 certifications as well as letter of appreciation 2014 and 2015 in NS Quality Awards.
Fives commissions mills at projects in Mexico and Qatar 22 February 2017
Mexico/Qatar: Fives has released information on cement plant projects in Mexico and Qatar. It commissioned a second FCB Horomill unit on 31 January 2017 at the cement grinding plant of Cementos Fortaleza, as part of the new 3300t/day complete line under construction at the Tula cement plant in Hidalgo. The first unit was commissioned in early December 2016.
Fives FCB was awarded the engineering, procurement and construction (EPC) contract from Cementos Fortaleza in mid-2015 for the design, supply, erection and commissioning of the cement production line. It includes a burning line using a FCB Kiln, FCB Zero-NOx Precalciner, FCB Preheater and Pillard Novaflam burner; raw meal and cement grinding plants using FCB Horomill and associated FCB TSV™ Classifiers; and a petcoke grinding plant using a FCB B-mill and associated FCB TSV Classifier. The FCB Horomill raw meal grinding plant and FCB Kiln are scheduled for commissioned in the second quarter of 2017.
In Qatar, Fives commissioned a cement milling unit on 6 February 2017 for Qatar National Cement Co.'s fifth production line in Umm Bab. This follows the commissioning of another mill at the site on 25 January 2017.
The mills are part of a 5000t/day production line that Fives is building for the client covering raw material preparation to cement despatch. The equipment ordered includes one 6400 kW FCB B‑mill with a FCB TSV7500 Classifier for the raw meal grinding plant, one five-stage FCB Preheater and a FCB Zero-NOx Precalciner, along with a FCB Kiln for the burning line, two TGT process filters and two 4200 KW FCB B‑mills with their FCB TSV4000 Classifiers for the cement grinding plant.
SSI Shredding Systems appoints Paul Breithaupt as Director of Engineering
Written by Global Cement staff
22 February 2017
US: SSI Shredding Systems has appointed Paul Breithaupt as its Director of Engineering. He will be overseeing the day-to-day engineering operations as well as working to optimise SSI’s internal processes and products.
Breithaupt has been working with an engineering consulting firm in Portland, Oregon for the past seven years. There he primarily worked on capital projects for major food manufacturers such as Nabisco. He holds a degree in Manufacturing Engineering from California Polytechnic State University.
Ube Industries announces personnel changes to cement business
Written by Global Cement staff
22 February 2017
Japan: Ube Industries has made changes to the personnel of its cement business. Yoshiaki Ito has been appointed as General Manager of Production and Technology Division with responsibility for Material Recycle Division, Cement and Construction Material Company. Previously he was the General Manager of the Isa Cement Plant. Tadashi Matsunamni has added responsibility for the company’s Technical Development Centre to his existing roles as Senior Managing Executive Officer, Company President of Cement and Construction Materials Company and General Manager of Cement Department. He takes over this duty from Masataka Ichikawa.