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.
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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