Addressing climate change
LafargeHolcim operates 239 integrated and grinding plants with around 374Mta capacity and consumed 785mGJ of energy in 2015. As the largest multinational construction materials company in the world, what it says and does in relation to sustainability is of crucial importance for the industry as a whole. Ahead of his presentation at Cemtech’s 25th Anniversary in Madrid, Bernard Mathieu, Head of Sustainable Development at LafargeHolcim, discusses the company’s performance and contribution in relation to CO2 reduction in the cement industry.
ICR: The cement industry has come a long way since the Cement Sustainability Initiative was set up in 1999, including setting up a framework for measuring and reducing CO2 emissions, and supporting technology roadmaps which define future pathways to a low-carbon industry. How would you assess the achievements of the industry worldwide, and LafargeHolcim specifically, in reducing CO2 since 1999?
Bernard Mathieu (BM): The Cement Sustainability Initiative has played a pioneering role over the last 15 years, primarily on two levels. Firstly, by defining and deploying a standardised protocol for the monitoring and reporting of CO2 emissions in the sector. For many years member companies have been reporting their CO2 emissions in a reliable and comparable way and with external assurance of the figures by an external verifier.
Secondly, our industry has been collaborating with external experts to define low-carbon roadmaps, assessing the potential of all possible emission reduction levers through technical papers describing the most efficient techniques and their possible contribution. These efforts resulted in the so-called “Low-Carbon Technology Partnership initiative for the cement sector”, or LCTPi Cement. This was launched via a public announcement by the CEOs of 18 major cement companies during the COP21 conference in Paris. These 18 companies established a shared statement of ambition, by which CO2 emissions should be reduced by between 20-25 per cent by 2030, compared to business as usual. In other words, the LCTPi cement can deliver a reduction of 1Gt of CO2 by 2030, about the same as the total annual CO2 emissions of Germany.
At LafargeHolcim, we are leading the sector in net CO2 emissions per tonne of cementitious product amongst global companies, and we are committed to maintain our leadership position in CO2 intensity.
ICR: COP21 generated a new momentum for the climate change agenda and the cement industry has pledged to reduced CO2 emissions by 20-25 per cent by 2030 compared to business as usual. How do you define business as usual? How easily can this goal be achieved and what does this mean in practice for the industry as a whole?
BM: The initiative reflects the willingness of the sector to improve on the current carbon efficiency, with assets that progressively become older – the so-called ‘business as usual’ trajectory.
The pledge is based on the prospective work achieved in partnership with the International Energy Agency and requires the industry to focus efforts on seven priorities:
- enhancing the coverage of the sector’s CO2 and energy database, with a specific focus on China (representing about 60 per cent of worldwide cement production)
- enhancing the energy efficiency of the cement manufacturing process
- scaling-up the collection, availability and usage of good quality alternative fuels and raw materials, including waste from other sectors in a ‘circular economy’ concept
- further reducing clinker content in cement to minimise the energy-intensive part of the process
- developing new cement with lower energy and calcination requirements
- engaging the full building and infrastructure value chain in local markets to identify and maximise the avoided emissions by usage of cement and concrete products; promoting, for instance, concrete pavement
- evaluating cross-sectoral initiatives, particularly on the opportunity to capture, use and store carbon at scale.
ICR: With reference to LafargeHolcim’s key performance indicators, what are your targets for 2030 and how much of a challenge will it be to go beyond the prevailing levels of performance in 2015?
BM: Earlier this year we launched The 2030 Plan, covering all LafargeHolcim’s sustainable development ambitions and targets. It covers four focus areas:
- circular economy
- people and communities
- water and nature.
Work on CO2 reduction is at the heart of the climate focus area. A key target of our’s is a 40 per cent reduction by 2030 – versus the reference year 1990 – of net CO2 emissions per tonne of cementitious product. By 2015 we had achieved a 26 per cent improvement. Maintaining a one per cent improvement rate per year is very ambitious – it requires commitment, creativity and innovation. By the end of 2016, every region and country in our company will have a specific CO2 reduction target. These country ‘bottom-up targets’ together form their contribution to our global commitment.
Taking a ‘life-cycle’ approach, by 2030 we also want to help our customers prevent the 10Mt of CO2 released every year from their buildings and infrastructure through the use of our innovative products and solutions. Our company leads the sector in terms of investment in research and development, with the objective to develop solutions improving the energy efficiency of buildings, enhancing their durability and reducing the amount of material required to achieve the same functionality.
ICR: To what extent has LafargeHolcim – and the wider industry – already exhausted the primary means of CO2 reduction, namely elimination of inefficient capacity, improving energy efficiency, and increasing levels of alternative fuels and raw materials?
BM: We see a real potential in clinker substitution and in the development of co-processing of waste-derived fuels. Our final goal is to make sure that all regions can reach the performance level achieved in our best performing regions, namely Europe, Latin America and India. This requires efforts in the mid- and long-term, advocacy in favour of enabling regulatory frameworks, investments in waste pre-treatment and feeding installations and partnerships with public authorities to establish sustainable waste collection processes.
ICR: How much further can LafargeHolcim’s clinker content be reduced, given that alternative raw materials are a finite resource or simply unavailable in some markets?
BM: Overall, we still see untapped potential for clinker substitution in many countries. LafargeHolcim has an average clinker cement factor of 71 per cent and we see potential to reduce it by an additional five per cent over the next 15 years. It is becoming more challenging, but – with commitment and persistence – it remains achievable. We are pursuing research on new clinker substitutes – as well as on low CO2 clinker types.
ICR: How much more can the world’s cement industry increase energy efficiency – what technical or operational levers exist for cement producers? How much old, inefficient kiln capacity exists that could be replaced by modern preheater technology at LafargeHolcim?
BM: Roughly 70 per cent of kilns that participate to GNR (Getting the Number Right database) are dry kilns, equipped with preheater and precalciner technology. This means that the remaining 30 per cent have room to improve energy efficiency, with saving potential ranging between 0.2-3.5GJ/t of clinker. Waste heat recovery is also a viable way to make a better use of the energy needed for clinker production.
Efficiency improvement depends on initial and subsequent cement plant investments, which are often dictated by market development, as well as local energy prices. All in all, the industry may be able to reduce average thermal energy consumption by five per cent over the next decade. Finally, the ongoing restructuring of the industry will result in higher utilisation in more modern plants, which in turn should have a positive impact on energy efficiency.
ICR: What benchmarks does LafargeHolcim use to define an efficient plant? Broadly-speaking, how do you define best available technology?
BM: We have a precise definition for benchmarking performance on carbon emissions, and the benchmark is to be 20 per cent below the average carbon emissions in the region, as reported by the GNR database. This allows us to benchmark the performance of our plants with the rest of the industry and to account for geographical specificities.
More broadly, we have design criteria for our new plants which defines the minimum level of CO2 performance to be achieved by a plant. These criteria are set considering BREF (EU best available techniques reference documents), other regulations and own expertise.
ICR: A recent report co-authored by Ecofys and Cembureau has highlighted the potential for far greater levels of co-processing across the EU, where 35 per cent of waste is still landfilled. What is your view on this report’s findings and how much further can Europe go, given that average AF utilisation rates are already high?
BM: We believe that it is crucial to convince European authorities – at all levels – that there is a need to develop appropriate regulations in terms of resource efficiency and waste management. Waste co-processing represents a sustainable waste treatment option for a broad variety of non-recyclable waste streams. Waste co-processing, which we often deliver via our subsidiary Geocycle, feeds alternative fuels into the cement kilns which enhances the overall competitiveness of the European industry. It also reduces its CO2 footprint and helps achieve high environmental performance in terms of material and energy recovery – achieving a much better environmental and social performance than incineration or landfilling.
ICR: Other regions, such as Africa and Asia and even the US, have relatively relaxed regulatory regimes surrounding waste disposal, limiting the potential for co-processing. How will these regions, and specifically a country such as India where LafargeHolcim has a large footprint, move beyond just one per cent thermal substitution rates (TSR) compared to over 36 per cent in Europe?
BM: You are underlining a critical challenge we are facing as a global industry if we want to continue improving our CO2 and resource efficiency performance. We recognise we have an important role to play to help support countries in the development of waste collection and pre-treatment for co-processing in cement kilns and to assist in the development of appropriate regulations to enable this to happen. An interesting approach is to initiate public private partnerships (PPP) to accelerate this development and the establishment of enabling frameworks – on the model of our past partnership on waste co-processing with GTZ (today GiZ), the German Technical Cooperation Agency. We are actively exploring today other practical partnerships with governmental and inter-governmental bodies to build on the momentum created by the COP21 Paris agreement.
ICR: Are we likely to see any breakthrough technologies in the next decade supporting low-CO2 cement production? In addition to cement producers, are equipment suppliers investing enough to drive forward innovation in this area?
BM: When we look back over the past 20 years, the industry has managed to continuously improve and reduce its emissions, but it did not achieve any technological breakthroughs. It is more likely that a range of improvements will result in better performance. It is unlikely that a breakthrough solution will solve the carbon issue for the cement industry.
ICR: The CSI Technology Roadmap stresses the role of carbon capture and sequestration (CCS) as one of the primary means of reducing CO2 emissions from cement plants. How far off are we from seeing LafargeHolcim’s first carbon capture cement plant?
BM: The actual deployment of carbon capture and sequestration techniques will depend on two main factors. Firstly, it will not be applied on an industrial scale before the price of CO2 achieves levels above E75-100/t, which means that all other mitigation levers should have been deployed beforehand.
Secondly, it remains an open question regarding the local acceptance of sequestration and the possibility to obtain permits at local level. At LafargeHolcim, we closely follow technical and social developments in CCS, but we are also exploring opportunities to use CO2 in mineralisation processes. This could represent a more economically-viable and socially-acceptable medium-term option.
ICR: What opportunities is LafargeHolcim pursuing in terms of renewable energies, particularly waste heat recovery technology and solar energy?
BM: At LafargeHolcim, we seize opportunities to generate renewable energy by optimising the use of our land – using biomass residues, using quarries as water reservoirs for hydropower, using land for wind mills or solar panel farms. Waste heat recovery is also a consolidated practice by LafargeHolcim and represents a significant share in our captive power production. We will continue to invest in renewable power and waste heat recovery where it is technically feasible and economically advantageous.
ICR: What progress is being made in terms of developing new cements and clinkers with lower CO2 emissions?
BM: We pursue our work on our low-carbon clinker, Aether, and Solidia™ – our low-carbon cement for precast applications. Tests have been undertaken at an industrial scale and with several of our customers in various regions of the world. We see real opportunities there.
Policy and regulations
ICR: In the markets in which LafargeHolcim operates, is there the political will available to support the ambitions of the LCTPi?
BM: Our firm hope is that the recent agreement achieved at COP21 in Paris will enhance political will and accelerate regulatory developments.
At sector level and at company level, we engage with governments willing to develop climate regulations and advocate for efficient, effective, fair and consistent regulations. We support carbon pricing, we advocate for a long-term, stable and reliable environment that will encourage investments. We advocate for a level-playing field between domestic producers and importers, and among industries. We advocate for comparable and coordinated efforts among countries, and consistent and equally enforced monitoring and reporting rules for carbon emissions.
Looking beyond our ‘fence lines’, we also advocate for a higher share of renewables in the mix of countries’ power generation capacity and higher energy efficiency standards in buildings.
ICR: Is it possible to quantify the anticipated costs associated for LafargeHolcim for all its CO2 reduction initiatives? Will investments be funded internally, via the Clean Development Mechanism or must they all be funded through energy savings?
BM: We do not release investment and cost figures related to our CO2 reduction initiative. But these costs – as well as related operational savings – are being assessed when establishing targets and action plans within each of our countries. The vast majority of these initiatives will be funded internally.
ICR: How successful has the EU Emissions Trading System (EU ETS) been in reducing CO2 emissions, and what role do you see for carbon trading both inside and outside of Europe going forward?
BM: The EU ETS has created a carbon market covering several countries, and clearly succeeded bringing the topic carbon and climate change into companies’ boardrooms. The European Commission has improved the design of the EU ETS over time, and additional changes are necessary to make the EU ETS effective in driving emissions reduction. Outside Europe, we observe and support the emergence of climate regulations in several countries, and we believe that carbon trading is the most efficient mechanism to put a price on carbon. The successful emergence of a Chinese ETS will be a turning-point for carbon trading.
ICR: How optimistic are you that the cement industry can achieve its targets?
BM: The demand for cement and concrete will remain, as needs for better housing and infrastructure are expected to grow and will even be enhanced by the required transition to a low-carbon economy. As the world leader in the construction materials industry, we have to address this exceptional challenge, to develop solutions and to deliver. If the appropriate, consistent regulatory frameworks are established, I am convinced business will be able to deploy its creativity and its unique ability to optimise resource use.
Article first published in International Cement Review, September 2016.