Reduction objectives for 2030 are now 37% over cement and 50% down the value chain. By 2040, we aim for 78% reduction of CO₂ emissions over cement and 93% down the value chain. By 2050, the ambition has now been set for net zero emissions over cement by 2050. This would create the potential for the sector to become carbon negative over the value chain.
Koen Coppenholle
CEMBUREAU CEO
How do you define your role as the representative of the cement industry in Europe and how do you assess the impact of this important role on the cement industry and sustainability issues?
Representing the cement industry in Europe has both an inwardlooking aspect, towards the industry, and an outward-looking aspect, towards the EU and national policymakers. It is essential to analyze and understand the main policy initiatives that will drive change for the industry. One of the major roles for an association is to convey the potential business impact of these policies and how to anticipate these in the business processes. The objective of the European Union to reach carbon neutrality by 2050, set out in the Green Deal and in the range of legislative initiatives adopted under the “Fit for 55” package, have created a positive momentum in our industry and led to the publication of the cement industry’s Roadmap to carbon neutrality over the value chain by 2050. The development of a wide range of projects by our Members since then has now brought us to publish an updated version of the Roadmap where we set out an increased ambition and aim for net zero emissions over cement by 2050, opening the potential for the sector to be carbon negative over the value chain. The approach taken by the Association increases awareness of sustainability issues with the companies. It is also an opportunity for the Association to learn from its Members first-hand about the regulatory, infrastructure and financing imperatives for an economically viable business case. Conveying these messages back to the policymakers has turned our Association into a trusted partner that can provide accurate and useful data and information.
Could you inform us about the main goals set by Cembureau in its updated Net Zero Roadmap and the strategies it follows to achieve these goals?
Also, could you summarize the strategies you have planned for sustainability in the cement value chain until 2050? CEMBUREAU published its carbon neutrality Roadmap in 2020. The evolution of technology and a strong boost in projects developed by the cement companies, have allowed CEMBUREAU to scale up its climate ambition level in an update of its 2020 Roadmap.
Reduction objectives for 2030 are now 37% over cement (compared to 30% in the 2020 Roadmap) and 50% down the value chain (compared to 40% in the 2020 Roadmap). By 2040, we aim for 78% reduction of CO₂ emissions over cement and 93% down the value chain. By 2050, the ambition has now been set for net zero emissions over cement by 2050. This would create the potential for the sector to become carbon negative over the value chain.
CEMBUREAU has identified three decarbonisation levers where progress can be accelerated and which have allowed to increase the ambition level. First, the development of alternative fuel use, including biomass, which already today reaches a level of 53% (from 2% in 1990) and is now projected to reach 95% by 2050 (compared to 90% in the 2020 Roadmap). Second, provided there is sufficient availability of clinker substituting materials that can safeguard the durability of the end-product, the ambition is to lower the clinker-to-cement ratio to 60% by 2050 (compared to 65% in the 2020 Roadmap). This requires an increase in volume of clinker substituting materials from 38 million tonnes today to 66 million tones by 2050. Lastly, remarkable progress on the development of CCUS projects has resulted in an increased ambition aiming for a capture of up to 62 Mt of CO₂ annually by 2050.
An investment that pursues environmental goals will only be sustainable when it is also embedded in an economically sound business case and pays due attention to the social aspects which do not only include employment and reskilling/upskilling of the workforce but also the benefit of society at large.
The ambition set out in the roadmap update requires the market to develop –including for the uptake of low carbon products – but crucially, the ambition can only be turned into reality when the adequate enabling regulatory framework is in place. The further development and roll-out of technologies requires a significant ramping up, better coordination and simplification of public funding tools, including the design of contracts for difference. Successful CCUS projects depend on a coordinated regulatory and financing approach along the value chain where by CO₂ pipeline and transport operators as well as storage operators work together with the emitting plants to build a viable business case for all. An increased ambition in alternative fuel use, including biomass, heavily depends on availability of waste materials across the EU and the continued zero-rated stats for bio-waste.
As an overall condition for a sound investment case in Europe, an effective and watertight Carbon Border Adjustment Mechanism which creates a level playing field with third country operators is essential, as well as access to low carbon electricity at affordable prices. Electricity prices in Europe are still significantly higher than in competing jurisdictions and this heavily impacts OPEX costs as decarbonization will, depending on the technology used, increase electricity demand from the cement sector from 20 TWh in 2021 to a range 47 TWH and 113 TWh in 2050.
The cement industry has been continuing preparations in line with the Zero Carbon Policy goals. Do you think all stakeholders of the industry, such as equipment and service providers, are adequately prepared for these new conditions? Are they making the same effort?
There is no secret in stating that the decarbonization initiative on which the European Union has embarked will require significant efforts from all operators along the value chain. We do note, however, an increased responsibility and awareness with all players in these, often new, value chains. Taking the example of carbon capture and storage (CCS), all actors in the value chain, from CO₂ emitting entities over CO₂ transport companies to storage operators value the need for a close cooperation and understanding of what it takes for each one of them to proceed with an economically viable investment. Equipment and service providers will need to be fast on their feet to deploy technology solutions at scale in a limited timespan but most actors in the value chain do have their own decarbonization ambition set out. This is equally true for the downstream players in the construction sector. It is precisely the interaction and mutual dependencies between players along the value chain that creates a sense of urgency for all.
It is known that the innovative approaches in the Net Zero Roadmap require some differentiation in the conventional cement industry. What are the most important challenges expected in this process and what measures should be taken to overcome them?
When an innovative approach involves the development of breakthrough technologies, there is a degree of technological and financial risk involved. In this context, the role of public funding and targeted financial instruments such as contracts for difference, are essential to de-risk these operations. In addition, a successful deployment of some of these large-scale projects depends on the availability and build-up of large-scale infrastructure, be it an energy network or, in the case of CCS, transport and storage infrastructure. A public-private cooperation model including for facilitating cross-border and transregional networks will be a key enabling tool for the transformation of the industry.
How do you think policies such as the EU’s Carbon Border Adjustment Mechanism (CBAM) and the EU Emissions Trading Scheme (ETS) will contribute to the decarbonization goals of the cement industry? How do you plan to strengthen financial support mechanisms for investments in key technologies?
The objective of the Carbon Border Adjustment Mechanism (CBAM) is twofold. On the one hand, it aims to ensure a level playing field on carbon between EU operators and operators in third countries. On the other hand, its goal is to incentivize third countries to reduce emissions from their operators. An exemption from the obligations under CBAM is only possible when third countries are linked to the EU ETS, whilst CBAM also allows to take into account carbon pricing schemes that would be set up abroad. The ETS is indeed the cap-and-trade ETS system that has incentivized European operators to decarbonize.
In terms of strengthening the financial support mechanisms, we turn our attention to a combination of public funding schemes and the development of carbon contracts for difference. A proper financial construction for investments requires a coordinated and simple application procedure in terms of eligibility requirements, timing, and combination between different funding sources. In addition, there needs to be increased transparency in the way payments by the cement industry into the EU ETS are used for the decarbonization of the sector. In this context, CEMBUREAU proposes the setting up of a dedicated cement fund which captures 75% of the industry’s future payments into the EU ETS.
What will be the possible changes in the carbon price over the years according to the European Emissions Trading Scheme? Are there any simulation studies you have conducted on this?
We do not have a crystal ball when it comes to the future of the carbon price nor did we ask for external studies to make such forecasts. In making assumptions and calculations, we use a mix of external sources, including the impact assessments carried out by the European Commission for the legislative proposals under the “Fit for 55” package as well as forecasts given by the International Energy Agency (IEA), the World Energy Outlook and organizations such as BloombergNEF, ENERDATA etc. Even amongst those sources, we note a rather wide divergence in the forecast range.
How do you cooperate with international organizations outside Europe and sister associations in other regions? What efforts are you making for the sustainable development of the global cement industry?
CEMBUREAU is an Affiliate Member of the Global Cement and Concrete Association (GCCA), along with sister associations in other parts of the world. All Affiliates meet twice a year and exchange views on a wide range of topics. Most of the Affiliates have elaborated or are in the process of elaborating a decarbonization Roadmap and all of the Affiliates are guided by the roadmap that the GCCA has put forward for the global cement industry.
If the EU’s environmentalist approach does not resonate in different geographies of the world, what challenges do exist preventing them from decisive and sustainable implementation? What measures can be taken in response to this?
The answer to this question is true for all jurisdictions around the world, including the EU: an environmental approach can only be sustainable when the three essential pillars of that sustainability receive an equal weight. An investment that pursues environmental goals will only be sustainable when it is also embedded in an economically sound business case and pays due attention to the social aspects which do not only include employment and reskilling/ upskilling of the workforce but also the benefit of society at large. It is precisely in this context that discussions in Europe are now ongoing, emphasizing the need to complement the Green Deal with an Industrial Deal. Increasing environmental performance needs to be accompanied by an enabling legal framework in terms of access to financing, necessary infrastructure (electricity; energy; CO₂ pipelines and storage sites; hydrogen), development of lead markets for low carbon products through standardization and public procurement and the creation of a globally competitive level playing field.
New cement types are likely to emerge in this process. Could you share us your opinions and suggestions on standardizing these new types?
As for any other policy initiative, it is equally important for the standardization process to be an enabler in bringing low carbon products to market. This requires an efficient standardization process that adequately balances speed in decision-making with the imperative of safety and technical soundness of solutions proposed. In the European Union, low carbon cements are currently being standardized under the existing composition-based standards system but there is a call by different market operators and governments for a stronger focus on a performance-based system. CEMBUREAU has suggested a dual approach whereby the composition-based standardisation system would be kept in place while a parallel, more performance-based system would be introduced in parallel. Such a dual approach should facilitate the standardisation of new lowcarbon products whilst ensuring the safety and reliability of cement and concrete put on the European market.
Using the link the updated CEMBUREAU Net Zero Roadmap and its Executive Summary.
https://cembureau.eu/library/reports/cembureau-s-net-zero-roadmap/
