Cement producers won't ignore climate change
In a week when Donald Trump, a staunch sceptic of climate change, has become the US President-elect, there was better news for environmentalists – not only because the Paris Agreement came into force, but also because the European Commission announced that it would invest some EUR227m in 144 green and low-carbon projects in member states.
While there is no single answer to the challenges presented to the cement industry by climate change and a requirements to reduce the industry's impact on the environment, combined measures currently being undertaken by a growing number of cement producers are expected not only to lower production costs but also help safeguard the planet.
In Egypt, government initiatives to increase alternative fuel usage by 15 per cent before 2030 have in part been driven by the Egyptian cement sector's reliance on fossil fuels, with coal use set to reach 9.7Mta by 2025.
Generating electricity in the Middle East is perhaps an area where cement producers can take advantage of local natural resources. Lafarge Cement Jordan’s Rashadiya cement works has announced plans to build a 15MW solar power plant in the southern governorate of Tafileh.
The strain on natural resources is constantly under review by the industry and the search for alternative raw materials is paying off. Europe has seen investment in incorporating more industrial byproducts into cement production, most recently illustrated by Ecocem France SAS, which is committed to using ground granulated blast-furnace flag (GGBFS) in its cement.
Moreover, multinationals, such as HeidelbergCement, are also attuned to continuous improvement through initiatives like its LEO programme to cut costs for logistics, as stated in its outlook following its 3Q16 results. It is important to remember that many of the multinationals have also set global emission targets to be reached.
Trump card for cement industry
So do US cement producers look despondently upon the election of Donald Trump? Well, some shareholders have reacted positively to the election result, with CRH's shares headed upwards by eight per cent on the Irish Stock Exchange on the back of the Republican outsider's win.
Trump has stated that he wants to inject massive spending into infrastructure projects that would see a vast expansion of roads, bridges and airports – a major boon for US cement producers. While The Economist expects Trump to spend big and increase the national debt substantially, Bernstein Research has reminded people that Congress determines the level of federal infrastructure spending and not the President. But Donald's Trump's election pledge of US$500bn on infrastructure spending would be the signal for cement producers to ramp up capacity considerably.
What Trump's Presidency will mean for US environmental policy is yet to be understood, but the US Environmental Protection Agency and the PCA are firmly set on a course to reduce harmful emissions and protect human health. Meanwhile, all cement producers should strive to increase cement capacity while keeping emissions low.
