Demand for cement has dropped since the outbreak of the COVID-19 pandemic and the slowdown in construction. While the cement industry is expected to recover as economies improve, long-term competitiveness depends on overcoming a more critical challenge: reducing cement’s carbon footprint to achieve environmental sustainability.
Cement, as a main ingredient of concrete, is a critical material in helping countries reach their development objectives, providing the literal building blocks for everything from housing to roads to pipes that bring water to homes. It also accounts for 7 to 8 percent of global greenhouse gas emissions.
With concern growing over climate change, governments, investors and the public are pushing for cement companies to reduce these emissions. The industry is taking steps to do so, but this will require technological upgrades, innovative approaches — and a considerable financial commitment.
Globally, more than 1,000 cement producers operate more than 2,300 integrated cement plants and more than 600 grinding stations, according to Global Cement. Together, these companies produce the 4 billion-plus tons of cement consumed annually. A good part of the output goes towards making concrete, which ranks as the second-most-used product in the world after potable water, with the equivalent of three tons of concrete produced each year per person globally.
With concern growing over climate change, governments, investors and the public are pushing for cement companies to reduce these emissions.
Cement’s carbon footprint is linked to the process of making clinker, an intermediate product in cement production that is ground up to make cement. Clinker is created by fusing limestone and other materials in kilns that operate at extremely high temperatures using both electricity and fuel, such as coal or oil. Carbon gases are emitted into the air from burning the fuel and from decarbonizing the limestone to create a key mineral component needed to produce cement.
The industry has been moving towards decarbonization in line with the global goal to restrict global temperature increases to below 2 degrees Celsius from pre-industrial levels. The European Cement Association has set a target of 2030 for reducing specific greenhouse gas emissions (including from electricity) by about 30 percent from 1990 levels, with the ultimate goal of achieving net-zero carbon emissions across the cement and concrete value chain by 2050. And the U.K. concrete and cement industry has launched a "Road Map to Beyond Net Zero" that would seek to make the industry net-negative in terms of carbon emissions by 2050.
Plants already have begun to reduce emissions by introducing waste-heat recovery technology and adopting renewable fuels. In developing countries, some companies are leapfrogging technology to construct "greener" cement plants. India's cement industry, ranked No. 2 globally after China in terms of production volume, is recognized as one of the most energy-efficient in the world, for example, thanks to its adoption of low-carbon, cost-effective technologies.
The global industry could achieve the 30 percent reduction with more time — perhaps by 2050 — and with significant progress in several areas. This includes:
- decreasing the global average specific-energy consumption to 2.9 gigajoules/ton for clinker production from 3.4 GJ/ton today, and 80 kilowatt-hours/ton for cement, and targeting an average clinker-in-cement ratio of 65 percent;
- rolling out full-scale waste-heat recovery (as in China) and moving towards achieving 100-percent alternative fuel use and over-50-percent renewable energy supply; and
- scaling up innovative, low-carbon cement products and carbon capture, storage and use technologies, which if done correctly could lead to an even bigger reduction.
Speaking at the Global Cement and Concrete Association's annual conference this month, Timur Gül, head of Paris-based International Energy Agency's Energy Technology Policy Division, stressed that "no sector can ignore the need for decarbonization." He said strategies such as efficiency improvements, switches in fuel and carbon capture will play critical roles but added that some technology that will be needed to reach net-zero emissions is not yet commercially available.
To implement all of these reforms will cost money. Private, public and multilateral financing, together with government support, can help foster technology transfer, green construction and adoption of resource- and energy-efficiency measures, among other initiatives.
International Finance Corporation (IFC) is partnering with cement companies to implement such changes. It has invested more than $3 billion in cement projects over the last 15 years across more than 25 countries.
Besides requiring cement companies to meet specific environmental benchmarks as a condition of its investments, IFC advises them on energy-efficient technologies and practices. It extended a loan of $120 million in 2016 to Mexico's CEMEX, a global building materials company with 65 cement plants and mills, to finance a plan to reduce emissions in the company's investments in emerging markets. In India, IFC supported the development of a roadmap to help the country's cement industry work towards global emissions-reduction goals.
Even as the COVID-19 pandemic and ensuing global slowdown have presented new challenges for the cement sector, the crisis can accelerate its transition to greater sustainability by increasing health and environmental awareness. Cement companies that seize the opportunity to reduce emissions and raise their energy efficiency will be in a more competitive position once the market revives.
Indeed, forward-thinking companies that adopt energy-efficient and circular economy practices will be well-placed to outrun their competition.