Cement prices may rise steeply with decarbonisation

Cement prices may rise steeply with decarbonisation
29 January 2020

Redburn Research House has downgraded HeidelbergCement and LafargeHolcim having assessed that cement producers will be faced with escalating production costs when having to decarbonise in the middle of the decade.

The European Union’s Emissions Trading Scheme (ETS) is predicted by Redburn to initially benefit European cement manufacturers by encouraging production discipline and industry consolidation in the region. As ETS becomes stricter and a border tax on carbon is introduced for products entering the EU, carbon capture technology will become necessary for cement manufacturers to reduce emissions, the report said.

Mr Messenger of Redburn said that no construction material company has tried to quantify the potential costs of funding carbon capture. “The companies should be helping investors understand the spending that is in front of the industry,” he said.

Redburn removed the 'buy' rating from HeidelbergCement, the German building material company, and downgraded LafargeHolcim, the Swiss construction material company, from 'neutral' to 'sell'.

Published under Cement News