Creating a new vision

Raoul de Parisot, president of CEMBUREAU, talks to ICR about his expectations for the future of the European cement industry, including risks posed by the EU Emissions Trading System, and sets out the sector’s vision for achieving carbon neutrality by 2050.

The European cement markets are expected to show modest expansion in the next five years. “Most independent analysts forecast growth in European cement demand of between 1-1.5 per cent in 2020-25,” says Raoul de Parisot, president of CEMBUREAU, the European cement association. “The main drivers for cement demand will be population growth and the transition towards a carbon-neutral society.

“Population growth, including immigration, will push the demand for new housing construction and infrastructure, sectors where cement and concrete provide solutions for thermally-efficient housing, for urban densification to prevent urban sprawl, and low-energy transportation systems.

“The transition towards a carbon-neutral society requires cement and concrete as a key enabling material in the construction of renewable energy (eg, wind turbines and water reservoirs). Furthermore, the renovation of poorly-insulated buildings or their replacement by more energy-efficient ones will need concrete which, through its durability, thermal mass, recyclability and recarbonation potential, contributes to a sustainable built environment,” adds Mr de Parisot.

Several large construction projects and EU-funded infrastructure initiatives are expected to support cement demand in the next five years. A range of initiatives has already been scheduled for implementation by the EU through its Cohesion Fund for infrastructure investments, which has earmarked EUR4bn. “An estimated EUR500bn of financial investment is required for projects necessary for the implementation of the Trans-European Networks (TEN) in the current EU programming period (2014-20). By 2030 the completion of the TEN Core Network Corridors alone will require a total investment of EUR750bn,” according to Mr de Parisot. It is important to mention that infrastructure works not only cover roads, bridges and tunnels but also extend to water and energy infrastructure. To give one example: surface water flooding in urban areas, also known as pluvial flooding, is becoming a major issue across the world. One solution is to tackle the cause of urban flooding from the ground up – by replacing waterproof, non-porous urban surfaces with porous concrete. Porous concrete is designed to allow water to pass through it, meaning water cannot gather on its surface and lead to flooding or icy surfaces in cold weather.

Sustainability – performance to date

How would CEMBUREAU measure the European cement sector’s current performance across the key sustainability benchmarks, including clinker substitution, energy efficiency and alternative fuel (AF) utilisation, in comparison with world standards?

Clinker substitution
In assessing clinker substitution, several factors need to be taken into account, including:
• compliance with construction standards
• requirements for the durability of the built structure
• availability of alternative cementitious components. The cement industry is turning to fly ash from the power sector and blastfurnace slag from the steel sector as substitutes for clinker. As the increased share of renewable energy in the energy mix will reduce the availability of fly ash and slag availability from the steel sector is also likely to decrease, the cement sector is exploring alternatives such as calcined clay and pozzolans. The further reduction of the clinker-to-cement ratio will remain high on the cement sector’s agenda in its drive to reduce CO₂ emissions.       

“However, achieving a lower clinker-to-cement ratio also requires a market uptake. Concrete companies deliver concrete to job sites according to the specifications set by the construction companies and thus have little control over the type of cement used. In addition, one should note that, even if the clinker-to-cement ratio is lower in some countries outside of Europe, durability and construction requirements are not always as stringent,” he adds.

Energy efficiency
In terms of energy efficiency, Mr de Parisot points out that the clinker process is already highly energy efficient, especially since the major shift in Europe from wet- to dry process technology. An extensive share of waste heat is recovered by drying the raw materials and fuels in the integrated grinding mills. The energy efficiency in cement kilns varies between 70-80 per cent depending on the moisture content of the raw materials, and this has made the cement industry a success story in reducing both costs and carbon footprint.

Fuel substitution
“With 46 per cent fuel substitution in 2017, the European cement industry avoids 20Mta of CO₂ and is the international frontrunner in AF use. A study carried out by Ecofys for CEMBUREAU assessing the prospects for co-processing in EU cement plants, demonstrates that there are no technical impediments to a further increase of AF use. Some plants in Europe reach a level of 95 per cent. The barriers are mostly regulatory in nature – a lack of a landfill ban at EU level as well as permitting, taxes and public acceptance issues at national level,” explains Mr de Parisot.

“The study showed that up to 60 per cent of the traditional fuels could be replaced by pretreated wastes and up to 95 per cent in the long term in Europe,” added the CEMBUREAU president.

The use of pretreated wastes as fuel varies considerably from one country to the other. The main drivers are:
• a strong waste management policy at national level with advanced waste treatment methods
• a low level of bureaucracy
• a modern cement industry
• price volatility of fossil fuels.

However, there are several barriers to improving thermal substitution rates, including:
• a lack of a mature waste management policy
• availability of suitable quality waste streams due to poor presorting and/or processing
• excessive bureaucracy
• no public acceptance of waste.
These disparities in barriers and drivers explain the large spread of fuel substitution between European countries, ranging between 7-65 per cent.

Renewable energy
Some cement companies are successfully diversifying into renewable energy, but this presents challenges in terms of the cement production process. “The decarbonisation of the power sector also results in a stronger focus of the cement sector on renewable energy as part of the energy mix. However, as a large energy-intensive process industry, cement plants need a stable and uninterrupted supply of energy and this is often a challenge for renewable sources to provide. Depending on the availability of renewable energy sources, they could supply part of the energy requirements of some cement plants,” highlights Mr de Parisot.

EU Emissions Trading Scheme

With new EU ETS Phase IV legislation coming into force in 2021, free allowances are expected to fall and carbon prices are expected to increase above their current level of EUR25/t. How will free allowances for CO2 emissions be calculated for EU cement producers and will they be sufficient? The rules for calculating the free allocations for EU ETS IV are based on the Historical Activity Level (HAL) and the clinker benchmark. The calculation is similar to the one for EU ETS III, except that the benchmark will be updated and the HAL will be adjusted every two years using a rolling average. Starting in 2021 the free allocations will be significantly reduced compared to 2020 and will be further reduced by 2.2 per cent every year until the end of the fourth period. The cement industry will face a shortage of free allocations during the whole EU ETS IV period. While as a trade association, cembureau cannot comment on specific market developments or forecasts, as a general principle, it is now clear that the EU ETS will be insufficient to maintain a competitive European cement industry and prevent carbon leakage. Therefore, it is far removed from the original goals of the system that was designed to limit CO2 emissions while maintaining a competitive industry in Europe. Europe needs strong industrial policies to prevent the delocalisation of energy-intensive industries, which in fact increases the carbon content of products consumed in Europe. In that sense we were pleased to see that incoming European Commission President, Ursula von der Leyen, has expressed the need to establish a level playing field for European companies competing globally.

Industry carbon neutrality – the challenges ahead

New research into climate change is pointing to the need for society to reduce GHG emissions at a faster rate than is currently the case to limit global warming to 1.5˚C by 2050. In response, some countries are assessing strategies to move their economies more quickly towards net ‘carbon neutrality’. For the cement industry, this will require considerable changes to the way it produces cement.

“The decarbonisation challenge for the cement industry lies in its manufacturing process and more specifically in the production of clinker, which is the most CO₂-intensive part of the process. Two-thirds of the CO₂ emissions are process-related and emission reduction is a huge challenge for the sector. The industry has set out a roadmap to reduce its emissions by 80 per cent by 2050 compared to 1990. Of this total, 32 per cent will be implemented through the application of conventional means and the balance with breakthrough technologies (carbon capture and use/storage),” explains Mr de Parisot.

The industry recently took stock of the progress accomplished since 1990 and showed that, with a 14 per cent reduction in its CO₂ emissions per tonne of cement so far, it is on track with its goal of a 32 per cent reduction with conventional means by 2050.

Additional progress is underway, but the CEMBUREAU president highlights the challenges ahead. “The industry is further engaged in research and pilot projects for carbon capture, but the technological and financial risks involved mean that such projects will only be viable if they are supported by public financing. Once demonstrators have been rolled out successfully, the technology will need to be replicated across the EU. For wide-scale roll-out it will be necessary for member states to support the infrastructure needs with regard to CO₂ pipelines,” he says.   

Moreover, the sustained competitiveness of the cement industry is key in ensuring continued investment. “The transition to a low-carbon economy will require substantial investments. These can only be implemented when the sector has a level of profitability and is competitive enough in Europe compared to its global competitors to be able to invest and grow.

“Maintaining the competitiveness of the cement sector is also essential for the value chain and for bringing concrete to the market as a material of choice for a sustainable built environment. With 10-15 per cent cement, the rest being water and aggregates, concrete is essentially a low-carbon product. Its durability, which has a lifespan of between 50-100 years, its thermal mass capacity, recyclability and recarbonation potential are all unique assets of a material that needs to keep its upstream value chain in Europe to be able to innovate, grow and create added value for society,” highlights Mr de Parisot.      

Therefore, the next 5-10 years will be crucial for the development of innovation and technologies that will put the cement sector on the low-carbon transition path. This requires investments in breakthrough technologies involving large amounts of capital. As a result, there is a need for a clear visibility on future profitability for the sector to make these necessary investments. Unfortunately, on average the economic crisis has resulted in a drop of 40 per cent in European cement production, forcing the cement industry to halve its investments from EUR2bn to EUR1bn, according to the CEMBUREAU president.   

With many companies still operating at a return on capital employed below the cost of capital, the primary objective of the sector is to return to a reasonable level of profitability that allows investments to increase. In this context, a key imperative is a stable regulatory framework that promotes a fair treatment with international competitors.

The EU ETS provides some incentive in investing in conventional technologies to reduce CO₂ emissions, but it does not provide the necessary visibility for long term large-scale investments. The EU cement industry will seize the opportunities offered by the different funding mechanisms introduced with ETS Phase 4, but the industry also needs a stable regulatory framework and a visibility on future CO₂ prices to justify its investments in breakthrough technologies.

Longer-term CO₂ reduction strategies

In the longer term, higher-impact technologies will be required to meet CO₂ targets and the European cement industry is actively involved in developing such technologies. Mr de Parisot provides a brief overview: “The cement sector is exploring a wide range of capture technologies through a series of projects:
• Oxyfuel technology, using pure oxygen instead of air in combination with flue gas recirculation to provide a high CO₂ concentration exhaust gas stream for further capture
• post-combustion technology (Norcem Brevik project), which focusses on tail-end separation of CO₂ from flue gas
• calcium looping technology (Cleanker project)
• direct separation technology (LEILAC project), which enables pure CO₂ to be captured through re-engineering of the process flows of the calciners.     

“In addition, the cement industry prepares the ground for large-scale implementation of CO₂ capture in the industry through the CEMCAP project, funded by Horizon 2020.

“Also funded by Horizon 2020, the European Cement Research Academy (ECRA) has conducted an extensive study addressing CO₂ capture and reuse by the cement industry and evaluated the technology readiness level (TRL) for each of the different routes considered,” says Mr de Parisot.

Can the zero-emission kiln actually become a reality in the next few years in Europe? “As most of the CO₂ emissions in the cement industry are process-related, their reduction depends on a successful breakthrough technology such as carbon capture and storage/use. Research and innovation in this area is ongoing up to the level of pilots and demonstrators. It is foreseen that these will be completed before 2030 after which the technology will need to be rolled out,” predicts Mr de Parisot.

In addition, the cement industry is looking at the electrification potential for the manufacturing process, but research into its potential for the cement sector is still in a very early stage and focusses on feasibility. 

Role of Digitisation

Digitalisation and artificial intelligence are not new to the cement industry, with the first computer-assisted control systems dating from the late 1980s. They have been used to optimise kiln operations to improve their energy efficiency and product quality. With newer and more powerful systems more parameters are monitored and controlled, resulting in higher fuel substitution rates, lower emissions and higher thermal performances. Digitalisation will also play a role in solidifying and consolidating the value chain. The emergence of Building Information Management (BIM) tools and material banks will allow improved tracking and tracing along the value chain, and significantly transform the construction value chain. The cement and concrete sector will need to be part of this evolution.

Circular economy

The European Commission defines the circular economy as one in which the value of products and materials is maintained for as long as possible, and where waste and resource use is minimised. Within this concept and in terms of the full value chain, concrete has a key role to play, according to Mr de Parisot.

“Different studies have demonstrated that concrete after demolition can be crushed and that after separation from the fines, the aggregates can be recycled into concrete and the fines into cement raw mix, thus closing the loop by saving resources.

“After demolition, crushed concrete has the property to absorb CO₂ in a chemical reaction inverse to the one taking place in the kilns. Research is underway to develop processes to accelerate this absorption and to use carbonation to make finished products. The absorption potential of concrete is up to 25 per cent of the process emissions emitted during the clinker production phase. Concrete should be considered as a carbon sink, like trees, but at a different stage of its life cycle,” he says.

CEMBUREAU member states have undertaken steps to reduce the impact on raw materials. Recovered concrete from construction and demolition waste can be crushed and used as aggregate, mainly for road bases, but new concrete can also be made using a share of recovered crushed concrete. The hardened cement fraction from recovered concrete provides a good opportunity for recycling as a raw material into the cement clinker process. For larger amounts, however, more efficient separation and treatment techniques are required to produce a raw material with sufficient purity and homogeneity.

This practice is most advanced in The Netherlands, highlights Mr de Parisot. “The amount of recycled aggregates used in road construction has increased from 4Mt to 18Mt since the early 1980s. The main driver for this development is the ban on landfill for construction and demolition waste. However, it needs to be said that, even with such high recycling rate, only 20 per cent of the total aggregates use in The Netherlands is covered.”

Looking beyond the factory gates

To strengthen the current construction policy by creating a new vision for the built environment, CEMBUREAU recently announced a new policy framework ‘Construction 2050: Building tomorrow’s Europe today’. “Such a new vision needs to adopt a holistic approach to policymaking in the three areas of sustainable construction (environmental, economic and social) with the strong involvement of all actors in the construction value chain,” says Mr de Parisot.

“It is in that same spirit that CEMBUREAU launched its ‘5C’ (clinker-cement-concrete-construction-carbonation) approach that stands for a cooperative initiative throughout the value chain, aiming to assess the contribution of each part of the value chain to carbon neutrality in Europe. The cement sector has reduced its CO₂ emissions by 14 per cent since 1990 and is well on track to achieve its 2050 emission reduction targets. Through the 5C approach, it is the intention to assess CO₂ benefits down the value chain, looking at thermal mass benefits of concrete, its recyclability and recarbonation potential. The approach is to look beyond our factory gates and focus on how a material-neutral and lifecycle performance-based approach can be developed in such a way that it considers the whole value chain and can yield tangible results,” concludes the CEMBUREAU president.

This article was first published in International Cement Review in September 2019.