Climate change is one of the key issues of our time, but the world is far from achieving the objectives of the Paris Agreement. Like every energy and CO2-intensive sector, the global cement industry is at a crossroads. The solution will require mapping out and implementing a tangible plan of action if we are to have any chance of accelerating the pace of decarbonisation. By Bernard Mathieu, World Cement Association, UK.
According to the World Meteorological Organisation, in 2017 the global average surface temperature was approximately 1.1˚C higher than in the pre-industrial era (ie 1880-1900) and the last three years have been confirmed as the warmest on record.
The last few years also broke records for extreme weather events. In the US 2017 was the most expensive year ever in terms of weather and climate disasters, while other countries saw their development slowed or reversed by tropical cyclones, floods and drought.
This intensification of environmental and climate-related risks is underlined in the World Economic Forum’s latest Global Risks Report (2018). Extreme weather events and natural disasters, as well as failure to reduce carbon emissions and build climate resilience, are among the top risks posing a serious threat to global stability, both in terms of likelihood and impact (see Figure 1).
Slow progress
Despite broad recognition of the critical nature of these risks and widespread political declarations about the importance of addressing climate change, the world is not yet responding at an adequate pace.
Preliminary estimates from Enerdata on 2017 emissions indicate a trend reversal in global energy-related CO2 emissions. Following a three-year decline, they grew in 2017 by around two per cent. More worryingly, a recent article in ‘Nature’, using statistical forecasts, predicts the chance of keeping global warming to less than 2˚C above pre-industrial levels is less than five per cent, with just a one per cent chance of staying below 1.5˚C.
McKinsey Energy Insights confirms this pessimism in its latest Global Energy Perspective, by forecasting that global greenhouse gases emissions should plateau in 2030, but that progress is nowhere near close to the 2˚C Paris Agreement target.
As an industry, the global cement sector in 2014 had the second-largest share of direct CO2 emissions worldwide. It was also the third-largest energy consumer and the leading industrial process CO2 emitter.
Challenges ahead
According to ‘Perspectives for the Energy Transition’ (2017) by the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA), limiting the global mean temperature rise to below 2˚C would require a transition of exceptional scope, depth and speed. Energy-related CO2 emissions would need to peak before 2020 and fall by more than 70 per cent from today’s levels by 2050.
This would require ambitious policy measures, including the rapid phase-out of fossil fuel subsidies, CO2 prices rising to unprecedented levels, extensive energy market reforms, and stringent low-carbon and energy efficiency mandates.
From a regulatory standpoint, beyond the revision of the European Union Emission Trading Scheme (EU-ETS), the most noticeable evolution is probably the roll-out of the new Chinese national carbon trading scheme. It will be more cautious than outlined in initial draft plans, with a national pilot restricted in the first phase to the power sector alone, and China will remain by far the world’s largest carbon market with more than 3bnt of CO2.
For the global cement industry, climate change poses a significant challenge.
Concrete is more important today than ever before in helping meet the infrastructure and building needs of a rapidly-growing and increasingly-urban population, as well as helping raise the resilience of communities against safety risks from flooding, storms and rising sea levels. Concrete can also improve the energy efficiency of buildings thanks to its thermal mass. Over its entire life-cycle, it can certainly be a low-carbon solution.
However, at the same time as working to fulfil these needs, the sector must dramatically reduce, in absolute terms, greenhouse gas emissions associated with production. Between 1990-2012, the industry managed to reduce emissions per tonne of product and one might expect to see an acceleration in the pace of improvement towards delivering a 2˚C scenario. However, the most recent figures from the WBCSD-CSI Getting the Numbers Right (GNR) database (which covers 21 per cent of global cement production) actually exhibit a stabilisation in performance over the past few years (see Figure 2).
None of the major cement companies have yet committed to so-called “science-based targets”, which are defined as “emission reduction targets in line with the level of decarbonisation required to stay below the 2˚C global temperature”.
This can be explained by several factors. Global cement demand is increasing, while validated technologies and established improvement levers are currently insufficient to deliver on a 2˚C scenario. The remaining technological gap is huge and the deployment of innovative solutions is slow in a traditionally- conservative construction sector that lacks a clear global carbon price signal. In many cases, investments in retrofitting and enhancement of existing plants have been decreasing to deliver on expectations from financial markets. Economic drivers supporting improvement have been fading over recent years.
Many also argue that a more rational approach would encompass life-cycle emissions and not just look at the initial footprint. Despite its continued efforts, the industry is yet to develop a pragmatic way of translating this statement into usable metrics and coordinated actions.
However, none of this alters the fact that every tonne of CO2 emitted into the atmosphere today takes us further from achieving the 2˚C scenario. Another communications campaign highlighting the beneficial properties of concrete over its life-cycle will not bring about real solution to reducing our industry’s carbon footprint.
Tackling the issue
The means of mitigating emissions available to the cement sector are well known: substitution of clinker with various mineral components, investments in energy efficiency in cement manufacturing and the use of alternative fuels in clinker kilns, including biomass fuels. For each of these, innovative options are being explored, but there is still much to be done to fully deploy well-established technologies.
Huge waste co-processing capacities in cement kilns are still not being fully used, even though this could deliver a massive contribution to solving waste management issues around the world – specifically plastic waste – and to reducing CO2 emissions. Coordinated action between public and private sectors are the only way to accelerate the pace of adoption.
Thanks to digital technologies, new opportunities are emerging. Automation and data exchange in manufacturing technologies is starting to materialise, bringing with it the potential to boost resource and energy efficiency along and across industrial value chains. For example these techniques can provide detailed insights into resource availability, use and quality, down to the level of each individual user.
Better and collaborative use of data can also help accelerate synergies between sectors, through the development of platforms, databases and advanced near real-time decision support systems, enabling a coordinated governance of water, energy, waste resources and CO2 streams across sector boundaries.
Educating concrete producers and users, as well as improving the professionalisation of the construction sector can also bring a massive contribution to enhancing material efficiency and lowering CO2 emissions. Meanwhile smart design and construction of buildings and infrastructure can deliver huge emission savings over the life-cycle.
Finally, carbon capture and storage or use techniques offer economically- and technically-viable options to drastically reduce emissions in the mid-term, though further research is needed to reduce costs as well as putting in place appropriate regulatory incentives.
Act now
One thing is clear: our sector is at a crossroads. Either we will succeed in defining and implementing greenhouse gas mitigation roadmaps, working closely with public authorities to shape regulation that enables a smooth transition towards a low carbon construction sector; or we could soon face more aggressive moves from investors, regulators and other stakeholders questioning the ability of the industry to embrace change.
As a global organisation, the World Cement Association (WCA) believes that reducing greenhouse gas emissions and tackling climate change effectively requires joint effort. With a membership base representing more than 1bnta of cement production capacity, the World Cement Association and its members have the capacity to affect such changes. To help this process, member companies will attend the WCA’s Global Climate Change Forum, taking place in Paris on 27-28 June.
We value collaborative action and will engage with other associations in the cement, concrete and construction sector, as well as any other external stakeholders whose background and experience can help us raise awareness and shape a clear and meaningful strategy. The strong heritage of the WBCSD/CSI in addressing the climate challenge is widely acknowledged and we believe broad industry alignment should be a common priority.
The way forward will be challenging and the path is not yet well defined, but the global cement and concrete sector has demonstrated in the past its ability to deliver rapid and effective solutions to urgent issues. The time has now come for the cement industry to show it has the skills and determination to play an instrumental role in delivering the technological, cultural and operational solutions to climate change.
This article was first published in International Cement Review in April 2018.
