Features

  • The global CW price index for gray cement exports is expected to increase almost 2 percent quarter-on-quarter in 3Q2022
  • Russia is projected to see an increase of over 4 percent in gray cement FOB prices in the period
  • North America and the Caribbean to lead global gray cement export prices

  • Cement ex-works prices are forecast to increase more than 20 percent in Russia and 14 percent in Kazakhstan, quarter-on-quarter in the 3Q
  • Sub-Saharan Africa's ex-works prices to rise on a quarterly basis, due to an increase in Nigerian prices
  • Asia ex-China ex-works prices to climb in 3Q boosted by increases in Indonesia and South Korea

Koen Coppenhole, CEMBUREAU

Carbon capture is the core technology for Europe's cement industry to reach carbon neutrality by 2050, according to Koen Coppenholle, CEO of the European Cement Association, CEMBUREAU.

Research on carbon capture is progressing well, with pilot projects and demonstrations in the pipeline, but there are still many challenges to make it available at a commercial scale.

One of these challenges, he says, regards the regulatory perspective is in terms of storage space. But, more importantly, the pipeline infrastructure to transport the CO2 is crucial and in his view, Europe is not paying enough attention to CO2 pipeline infrastructure, which is an essential precondition for these projects.

 

 

In this talk, Mr. Koen Coppenholle shares CEMBUREAU’s vision on the European cement industry path toward decarbonization and how to address the challenges involved in getting it to be carbon neutral by 2050.

The European cement industry has been facing high energy costs which are heavily impacting cement production, with the stoppage of some kilns and declining utilization rates. What are the prospects for this year? In which country(ies) has the industry been most severely affected?

In terms of prospects, at this stage, it's difficult to predict how the market growth will be this year, but it’s certain that the energy costs are soaring, and this is indeed having a huge impact on the industry. I would say that countries closely linked to Russia or to Russian supplies, of course, will be the most affected. If you look at the energy mix of the cement industry, gas does not take a large space, but for cement kilns you need gas to start the kilns. So, even in small quantities, we still need availability. And we see that in Bulgaria, where there are problems in supply. In neighboring countries to Russia the problem worsens. Another major impact is on the prices, and the price increase is strong at this stage. In addition to that, there was the decision to ban Russian coal: we have a transition period, the existing contracts can still be honored during summertime, but the main effect of that is having a diversion of supplies, which increases prices. Coal has to be transported, has to be imported from all the parts of the world. This means more expensive supplies. The whole market development 
results in higher prices.

Does this cost scenario affect the decarbonization path of the regional cement industry? And for how long?

I wouldn't say this puts a hold on our decarbonization path. We have a decarbonization agenda for 2030 and 2050 – with the medium target in 2030, and reaching zero emissions in 2050. I wouldn’t say that we will slow down on our path to decarbonization. Nevertheless it is a fact that we are seeing increases on our cost base. We need to have a careful analysis on the investments to be made. And again, we need to raise the question: do we need more public funding? In any case, I wouldn't link this to stopping our decarbonization agenda.

CEMBUREAU has published a roadmap to achieve carbon neutrality by 2050. How has the European cement industry advanced in terms of these efforts? Which are the most prominent efforts to achieve carbon emission reductions in Europe?

First of all, the roadmap looks at the full value chain. We do not only focus on cement, we have the 5C circular approach: 5C includes clinker, cement, concrete, construction, and carbonation. We look through the value chain to find out where we can reduce CO2 emissions. When we look at the cement technologies, 42% of our CO2 emissions reduction will need to come from carbon capture installations. That’s a very important technology, and there are pilot projects, demonstrations in the pipeline. Of course, we are looking into reducing the clinker content in cement, that is another important issue. We can reduce the clinker content in cement. Going clinker-free is challenging in terms of keeping the strength of the product. We can still reduce the clinker content in cement, significantly, but our main impediment is the access from substitutes such as fly ash. Fly ash comes from the power sector and they are also decarbonizing, so its availability will be reduced. The same for slag from the steel sector. As the steel sector decarbonizes, there will be less availability for slag. So you need to look at all substitutes and their geographical availability. A substitute that is available in Southern Europe might not be available to the same extent in Northern Europe. These are important issues in perspective to reducing clinker in cement. Coming back to carbon capture, that's the core technology for us. Without carbon capture, it's very difficult to decarbonize the cement industry.

Europe is seen as the test lab of carbon capture technologies globally, but regulations and financial incentives are still a challenge. Which are the most relevant issues the industry has to address in terms of regulations and financial incentives on a national and regional level to accelerate the adoption of this technology?

Let me start with financing. Public funding is an important element. Many of these projects carry a technological risk and a financial risk, so public funding is essential here. The Innovation Fund is very positive, many of our companies have applied, and we are seeing some first results coming in already. What I find important in all European debates is that we have the possibility to have a frontloading of the innovation phase, in the sense that we have the projects, the pilots, the demonstration projects out there, so we need the funding right now for these projects. If you look at the 2030-2050 roadmap, you will see that the share of carbon capture is not huge in 2030, as the commercialization will be between 2030 and 2050. But first we need these pilots and demonstrators to run and this is now. And for these we need public funding.
From a regulatory perspective, there are two main issues I'd like to address. If you make carbon capture and storage, where you store the CO2 onshore or offshore, you will need storage space, but more importantly, you need to have the pipelines, the transport network for the CO2. That's where we feel Europe is not paying enough attention. Europe is paying more attention to hydrogen pipelines, but not so much for CO2 pipelines. CO2 infrastructures are really an essential precondition for our projects. We have 200 plants across Europe. If you're close to pipelines, you can transport the CO2 there. But there is a need to develop the use applications for CO2, it's not only about storage. On CO2 use, you can talk about mineralization applications, but also applications on sustainable fuels – and there, we need very clear accounting rules on who will be responsible for surrendering the CO2, and who can subtract the CO2 from the original emissions. That is not clear in the current legislation, and it is still in discussion. 

What needs to advance in terms of legislation in that sense?

We need to have clarity. If the cement capturing plant is capturing CO2, it should be able to deduct the CO2 from its original emissions if the CO2 is transferred to a third party, who emits it into the atmosphere. So, for us, it's not a question of CO2 being accounted for, but the important discussion is at what point in the value chain do we need to account for the CO2. And for us, that happens when the CO2 is released into the atmosphere. That's an important discussion that hasn't been clarified so far. It has an impact on the investment you make as a company. If you make an investment and you calculate your return on that investment, and if you doubt the CO2 captured will be deducted from your CO2 emissions, that has an impact on your ROI calculation. But it also impacts the reduction potential and achievement of our CO2 reduction targets. And, of course, we understand that the airlines industry wants to have sustainable aviation fuels. But there has to be a discussion about who takes what, and at what stage, because we also want to make sure that we have the CO2 captured, that we can subtract from the original CO2 emissions. That is a challenging regulatory point.

Are there projects in the fields of infrastructure right now or is it something that has to be developed?

It's a combination, there are some projects in Norway. There’s a project that has a storage in the North Sea, specifically there you have a storage offshore. For many other projects, it needs to be developed. Some of the projects are looking for use applications, not so much for storage. But I would say that most of the projects at this stage look at the capture technology. The first stage is capture, and then you can look for transport and storage or start looking at use applications. There is sustainable fuel use, there are some use applications that have already been developed in projects.

Can we say that all carbon emissions reduction technologies are very capital intensive? What are the alternatives for smaller-scale industries to adopt a decarbonization approach to their operations?

Not all of them. I think carbon capture is very capital intensive, yes. It's important to mention that it's not only CAPEX intensive, but also OPEX intensive. And it comes back to the whole discussion about energy. If you look at carbon capture technology, many of these technologies will need much more energy. The energy used would increase. But in some other projects to reduce emission, we also reference the possibility of using alternative fuels instead of fossil fuels, which we take from different waste streams. We have now at this stage 50% of our fuel needs coming from alternative fuels, that means that by using alternative fuels instead of fossil fuels you also reduce CO2. You basically avoid CO2 by using alternative fuels. These investments are happening in companies. Many companies are CAPEX oriented, the investments that they're doing. Some plants are operating at 99 percent alternative fuels use. Most of the restrictions and impediments we have are related to regulations at national level, such as permissions, taxation, the waste that goes to landfill. The landfill ban in Europe is something we would like to see for recyclable waste, because we need that waste for our kilns. In that scenario, I would say, not extremely capital intensive, and indeed CO2 cost saving.

Clinker-free cements are a novel technology to reduce GHG emissions. On which scale is this technology being adopted in Europe? And, if not being adopted, what would be required for this change to occur (regulations, financing, subsidies, etc)? In which scale is this being adopted?

It's not so much a question of technologies available but a question of availability of raw materials, including fly ash, slag, calcined clays. It depends heavily on geographical availability. That will determine how and how much you can produce specific types of cement. There is an additional item that I would like to mention., When you talk about low carbon, you need to look at cement but also concrete. Because some of these constituents can be added at the concrete phase. It's not because you have a Cement type 1, which is a Portland cement with a high level of clinker, that you don't have a low carbon concrete, because you can add mixtures or substitutes at the concrete level. What is relevant for us in terms of low carbon it's the concrete level. Cement is important in terms of developing low carbon cements, but if you look at the 5C, you also need to look at low carbon concrete. That’s why we took the 5C approach. From all these discussions, raw material availability is the key issue for us. And we are conducting studies about the availability in different Member States, how far we can get both with alternative fuels and alternative raw materials.


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  • Gray cement exports are estimated to decrease by 3 percent quarter-on-quarter in 2Q2022
  • Turkey remains the top exporter of gray cement, holding almost 25 percent of the global market share in 1Q22
  • CW price index for gray cement in Eastern Europe and CIS to increase on the back of the Russia-Ukraine conflict and its reflection on production and transportation costs

Rick Bohan, Portland Cement Association

Cement is one of the most used materials and also one of the industries with the heaviest carbon footprints globally. For Rick Bohan, Senior Vice President of Sustainability for Portland Cement Association (PCA), it's also part of the solution towards carbon neutrality. Concrete can make buildings more energy efficient, roads more fuel efficient, and it can be repurposed, recycled and reused over time, he says.

With a holistic approach to the construction supply chain, PCA drew a plan that foresees actions that include new technologies, the use of additives in cement and concrete, reducing the use of fossil fuels in construction and rationalizing the use of resources across the entire value chain, in addition to regulatory changes and increasing support from the government. No material will get us to carbon neutrality alone, but with a joint effort it is possible to reach carbon neutrality.

What is the US cement industry's strategy towards decarbonization?

We're looking at a full value chain approach that uses all sorts of technologies through the cement production process and optimizes the use of cement. Our approach to carbon neutrality includes carbon capture as well as the production of low carbon cements. We know right now that our clinker levels in cement are higher than in Europe, but if you look at the clinker amount in concrete, it is roughly the same. It’s interesting because here in the US, the ready-mix concrete industry tends to use fly ash and slag at the concrete producer level, whereas in Europe they put it in during the cement production. In any event, we're looking at lower clinker levels in cement and lower amounts of cement in concrete. To lower clinker levels, we are replacing clinker with decarbonated raw materials, such as slag and limestone. 

We are seeing a great number of companies announcing the shift towards portland limestone cement over the past few months…

In the US, we're seeing a rapid shift towards portland limestone cement (PLC), and there are a couple of reasons for that. One reason is that users and the government have realized that this is a really easy win for them - PLC can reduce the carbon footprint of cement by 10 percent right off the bat, so we're seeing a lot of demand for the product. Likewise, on the supply side, every plant can produce PLC, and almost on a weekly basis, we're seeing more and more plants and companies moving to PLC. In addition to PLC, which reduces the clinker in cement, our roadmap also includes reducing the amount of cement in concrete, which can be replaced with other materials such as fly ash and slag. Fly ash is a byproduct of burning coal, and here in the US we're shutting down a lot of coal-fired power plants. Incorporating fly ash into concrete allows the material in fly ash storage facilities to be purposefully reused. 

Are there standardization challenges in this shift, for example, in concrete formulations?

It’s a question of optimization. When you build with concrete, you can optimize material use by assessing the best approach or formulation needed for a particular application. For example, a designer can use a more traditional approach – for cement, this is known as ASTMC 150 – or they may use a blended cement - what's called a C595 - or maybe they want to use a performance-based specification for cement - an 1157 product. It’s also possible that they’d look at the project and rather than using two types of aggregate in the cement blend, decide they are going to use three or four. Back in the day, it was unusual to see people using any material beyond fly ash in concrete. Nowadays there are designers taking advantage of this whole menu of opportunities, and they are incorporating everything that's available. By also focusing on using aggregates that are locally available, they’re helping reduce the carbon footprint even further. This is really what our roadmap is all about, taking a holistic approach and being intentional about how we use cement and concrete, where and when we use it, and the professionals involved. This helps reduce the carbon footprint as we go from clinker to cement to concrete, and then, in the construction phase. And we want people to realize that concrete is not a problem, concrete is the solution. On one hand people say, ‘cement and concrete have a CO2 footprint’, and that’s correct, but we’ve also got a roadmap to carbon neutrality. Not only can we get to carbon neutrality, we can do so by addressing the great challenges we are facing as a society – things like infrastructure that can withstand the realities of climate change. This is a great opportunity for collaboration as it’s critical to get support from both the policy side and the public to realize and enact these changes. 

Is there an approach to the rest of the cement value chain?

Even though we don't control the downstream portion of our value chain, we're taking the lead by showing people different opportunities they have. Take construction for example. The construction sector has recognized the need to optimize how they build and make it more efficient. In addition to looking at the construction schedule, companies are considering other construction-related activities with heavy emissions. For example,  there is a lot of carbon that goes into things like earthwork. So, shifting from earthwork equipment that uses diesel to natural gas power or to electric vehicles is an opportunity to reduce emissions. Another example is preparing buildings for occupancy. Many people don't realize that when a building is built, before the tenants move in, there is a lot of testing on the heating, mechanicals, the pumps for fire protection, and other systems. This is referred to as flush and fill; we're filling things up and flushing them out to make sure everything works. There’s a lot of energy that goes into that process, and we’re starting to realize how wasteful it is and finding a better way to do it. These are a couple examples of how the construction section is focusing more and more on optimization. That's a key part of our roadmap, the whole concept of optimizing. We can control optimizing the production of cement and concrete, and we want to encourage and inspire those that use this material to optimize as well. The final link in our value chain is carbonation. You might be surprised to learn that 10 percent of CO2 emitted during the manufacturing and transportation of both cement and concrete is going to be absorbed back into the concrete over its lifetime. It doesn't happen overnight, but as long as you have an exposed concrete surface, that CO2 is going to be absorbed and permanently sequestered. And then, at some point in time, that concrete building will be demolished and hopefully recycled. When you demolish a concrete building you are increasing the surface area of the concrete, meaning it can absorb more CO2. Then you can take that concrete, crush it in smaller parts and use it either as aggregates in fresh concrete, or potentially you can use it as a raw feed in the cement kiln. 

Regarding regulations, what are the main constraints that the US cement industry faces to advance in, for example, carbon capture technologies?

Carbon capture in particular is going be a very expensive venture. By expensive, not just financially, but also in terms of energy. What you're really doing is building a plant within a plant, and the amount of energy that it's going to require is significant. The capital expense and the operating expenses that go with carbon capture is not something the industry can absorb overnight. The industry has identified 10 key policy priorities, one of which is the need for support from the government in the form of tax incentives, grants and subsidies, as well as updating regulation. This would apply to carbon capture as well as a number of other solutions we’ve identified. We need to know from the government how new technologies are going to be permitted and how we demonstrate compliance. For carbon capture, we also need to think about what happens to the carbon after it’s captured. For example, in some regions of the country, there are facilities where we can ship CO2 and it can be used for things like oil recovery or turned into some kind of product, but that’s not yet available widely. 

So infrastructure will be critical for this technology to advance?

Infrastructure is a big piece of the puzzle for the United States to consider and not just for carbon capture. In addition to needing a pipeline to help move captured carbon, we’ll also need pipelines when we move away from traditional fuels and increase uptake of transitional and transformative fuels like natural gas and ultimately, hydrogen. These processes also use a lot of energy, and that means we need a much more reliable and robust electric grid. So, not only are we talking about pipelines, we're also talking about power lines. The public has to be aware that industries like cement manufacturing can get to carbon neutrality, but to do that, there has to be supporting infrastructure built out. It’s also important that this infrastructure is built efficiently and in an environmentally sound manner. You can see this goes beyond just one plant - this isn’t an issue solely for the industry to address but rather society more broadly – we need support from academics on the research side, government on the policy side, and the public on acceptance. 

Are there financial incentives in the US that support the implementation of new technologies such as carbon capture or the development of clinker-free cements?

We have talked very extensively with the federal government, in particular the Department of Energy, about programs to incentivize innovation. Currently, a program called "45Q", a government tax credit to incentivize carbon sequestration technology, is being tailored to increase effectiveness. Right now, we like the idea that the program exists, but it's just not enough, and we’re supportive of trying to expand it. Regarding lower carbon cement and concrete, we’re working with various government agencies to increase adoption. However, we don't want to sacrifice the strength, durability, resilience and sustainability of the concrete that everybody has come to expect. The answer isn’t recommending using less cement, clinker or concrete – making that the only solution will impact the strength, durability and quality of our infrastructure. The government recognizes that, and we're working to educate political leadership as part of this process. 

What would be required on a national and state level to accelerate the adoption of these technologies (e.g. carbon capture and clinker-free cement)?

There are a number of major policy levers that need to be implemented by national and state governments in order to move forward with our goal to carbon neutrality. A few that we’re advocating for in the near-term include carbon capture, streamlined regulation and permitting, acceptance of alternative fuels and acceptance of lower carbon cement blends. For carbon capture, we need accelerated research, funding and investment in manufacturing, material innovation and carbon capture, utilization, and storage (CCUS) technologies and associated infrastructure. We also need more streamlined regulation and permitting practices for facility and infrastructure modernizations. We need acceptance of coal combustion residuals (CCRs), alternative fuels, CCUS, and other technologies. We need market acceptance of new, lower carbon cements. PLC, for example, is available now and many plants are producing this cement mix which has a carbon footprint 10 percent lower than traditional portland cement. What we need is for those that are tasked with specifying materials for private and public projects to ask for PLC. Finally, adoption of performance-based standards when specifying building materials is key in the near term.

The bipartisan infrastructure bill and public works have started to require the use of materials with a lower carbon footprint. How is the cement industry in the US coping with these new requirements and how will it affect the cement industry?

The cement industry is already working to produce lower carbon options, including many plants transitioning over to producing PLC, which reduces carbon emissions up to 10 percent. We want to ensure that these new requirements are considering the bigger picture, and what it really means to “go green”. Because concrete is a carbon sink, it could already be considered a low-carbon material. Over the course of its lifecycle, a building could reabsorb and permanently sequester about 10 percent of the CO2 emitted during its production. Concrete also makes buildings more energy efficient, roads more fuel efficient and requires less maintenance over time in comparison to other materials. It can also be repurposed, recycled and reused, saving infrastructure resources and minimizing time, energy and money spent on new construction. In addition to this, our roadmap to carbon neutral also charts out actions that will help further reduce the carbon footprint of cement and takes into account the entire value chain.

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  • Cement export prices for bulk ordinary Portland cement both in the Mediterranean Basin and in the Persian Gulf-Arabian Sea regions registered an increase of almost 1 percent month-on-month
  • Pakistan’s cement exports decline in May
  • Cement sales in Spain and Saudi Arabia increase in May

  • Capacity additions this year will be led by India and Nigeria, with the first seeing rising demand while the latter is benefiting from high oil prices
  • Cement production capacity in China to decrease by 2026
  • Western Europe and North America's capacities to remain flat this year

  • Cement export prices for bulk ordinary Portland cement both in the Mediterranean Basin and in the Persian Gulf-Arabian Sea regions increased by almost 2 percent month-on-month
  • East African CFR prices for bagged cement continued to rise in May
  • Spanish cement exports continue to post decline in March
  • Cement exports weaken both in Pakistan and Saudi Arabia in April

  • Cement consumption is expected to grow in Asia ex-China and the Middle East by an estimated 5 percent and 4 percent year-on-year, respectively, in 2022
  • While consumption in Western Europe is likely to grow, Eastern Europe and CIS is set to decline due to the Russia-Ukraine conflict
  • Cement consumption in China is expected to continue to decrease due challenges in the construction sector

  • Global cement consumption for 2022 is now expected to grow by 1 percent
  • Consumption growth prospects for 2026 revised downwards on skyrocketing energy prices
  • Cement consumption in the US to continue to grow this year

  • FOB prices for cement in the Persian Gulf and Med Basin increased month-on-month in April
  • East African CFR prices for bagged cement also increased in April
  • Cement exports from Egypt increased in January-February
  • Saudi Arabia’s cement exports continued to decline in March

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