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Pitch

Achieving Gigaton-scale reductions within a decade or two requires efforts and optimization over the full life cycle of cement.


Description

Summary

Gigaton-scale reduction of greenhouse gas emissions within the cement sector is very unlikely to be feasible under current economic and regulatory conditions. Furthermore, within its boundaries, isolated analysis of the production of cement might lead to suboptimal results. Therefore, the scope of our proposal expands beyond the actual production of cement to include the full potential overt the full life cycle of cement.

The idea is to stimulate action over the whole value chain, including cement production, concrete formulation, building design, construction technology, use phase, and end-of-life, through a portfolio of services that optimizes the performance at all levels. Key to this proposal is the establishment of a new unit the main function of which is the optimization of the CO2 footprint of cement and concrete along the whole value chain.

This could effectively overcome some of the most important non-financial barriers to the implementation of less GHG-intensive solutions along the full value chain. An integrated approach would impact emissions of GHGs in a number of areas and would use a variety of tools to make use of the most potential levers along the value chain directly.

The proposal has the potential to reduce global emissions by 4.75 – 5.75 Gt a year by 2050 at costs that will actually be negative, i.e. the approach will lead to cost savings. Moreover, although the current conditions (regulatory, cultural, climatic etc.) differ significantly all over the world, there are no geographic limits to the application of this approach.

Through this change of mindset and way of doing things material providers such as CEMEX stand in a unique position to lead efforts that address the potential for emission reductions along the full value chain.


Category of the action

Industrial Efficiency: Cement Industry


What actions do you propose?

When trying to identify emission reductions in the cement sector at Gigaton scale at global level, there are serious doubts about whether such a potential is available within the sector under the conditions of this contest, as well as concerns that an isolated analysis of the production of cement might lead to suboptimal results.

A quick review of the potential within the sector will explain this (this is also illustrated in the following image):

A number of recent analyses have shown that the potential within this sector is quite limited. Both the WBCSD/IEA roadmap (WBCSD/IEA 2009) as probably the most thorough analysis and the cement sector report by the Carbon War Room (Gupta 2011) have identified a reduction potential in the desired range, but there are a number of caveats:

 - the reports quantify the potential under a favorable policy framework; a significant fraction of this may not be implemented under current real conditions;

 - there are non-financial barriers beyond the control of the sector to many of the levers;

 - one of the key levers, the use of granulated blast furnace slag and fly ash from coal combustion as clinker substitutes, depends on the development in other sectors; a successful strategy to mitigate climate change might considerably reduce availability of those materials;

 - some of the options will have to be phased in over a period of several decades; this is particularly true for the optimization of the energy efficiency of cement plants, but also radically different cement types with a smaller carbon footprint – if ever they become competitive, which we doubt, based on current knowledge – will require a lot of time before they represent a noticeable share of the market;

 - finally, the backstop technology, carbon capture and storage, is still far away from being technologically mature, and for very basic reasons it will never be economically viable under the regulatory conditions that currently prevail in most of the world.

 

From this we conclude that a Gigaton-scale reduction of greenhouse gas emissions in the cement sector focusing exclusively on the production phase is very unlikely to be feasible under current economic and regulatory conditions.

 

Another important point that calls for an expansion of the scope beyond the mere production of cement is that some options to reduce specific emissions per ton of cement may have negative impacts on subsequent links in the value chain; in other words: reductions of specific emissions may be offset by higher volumes. For example, lower lime saturation factors in clinker production (LSF; a measure of to what extent the raw meal represents the theoretical ideal composition) will both lower fuel consumption per unit of clinker and process-related emissions from the decomposition of limestone. However, the resulting clinker will be of lower quality, with negative impacts on the possible clinker/cement ratio, the cement demand per unit of concrete, or the quality and durability of the structure produced with that cement. Likewise, the use of low-quality clinker substitutes can have similar effects. On the other hand, advances in the downstream links of the value chain may have a certain impact on net cement demand for a given structure.

 

For these two reasons it seems appropriate to expand the scope of our proposal to the full life cycle of cement. The proposal image (see above) illustrates some of the major levers for emission reductions along this value chain and highlights where the most realistic options are in order to illustrate why the smart use of cement and the main material made out of it, concrete, should be included in a truly complete assessment of the reduction options related to cement.

In a nutshell, the idea of this proposal is to stimulate action over the whole construction value chain, including cement production, concrete formulation, building design, construction technology, use phase, and end-of-life, through a portfolio of services that optimizes the performance at all levels.

It is well known that many of the reduction options along the value chain are actually cost-efficient under current conditions, but are often not implemented due to other barriers, be it lack of know-how or difficult access to financing (see e.g. WBCSD 2009a). We believe that our approach could effectively overcome some of the most important non-financial barriers to the implementation of less GHG-intensive solutions along the full value chain. Through this wider lens, the cement sector could achieve, by both direct and indirect contributions, Gigaton-scale reductions of greenhouse gas emissions.

 

Key to this proposal is the establishment of a new unit the main function of which is the optimization of the CO2 footprint of cement and concrete along the whole value chain.

 

Among the tools that this integrated approach would use are:

  • Consultancy in sustainable construction, using life-cycle assessment methodologies to ensure optimized results over the full life cycle. At the core of the idea is a partnership between a number of different players (construction material producers, architects, engineers, potentially financing institutions) to ensure expert knowledge and other resources are available as well as to guarantee unbiased consultancy.
  • Foster R&D into the full life-cycle benefits of cement- and concrete-based construction and dissemination of the results. This will not only support the consultancy activities, it will also serve to remove regulatory barriers such as composition-based cement standards, outdated frameworks for waste management, and lax energy efficiency standards for buildings. All these regulatory barriers limit the uptake of proven GHG-reducing technologies along the value chain.
  • Feedback loops from clients and end users to the producers of cement to ensure that the products best match actual market requirements.
  • Operation of buildings and structures: It is well known that user behavior contributes significantly to the energy efficiency of buildings; support could take a number of forms, from thorough commissioning and training of operators / users to monitoring systems and awareness concepts to energy contracting.
  • Financing: Sustainable solutions are actually often economically attractive over the full life cycle of a building. Nonetheless, they are still not considered bankable, meaning even solutions with a reasonable payback period are not implemented due to lack of upfront investment. The integrated approach would also work on financing schemes to overcome this barrier; CEMEX, for instance, has had a lot of success with microfinancing schemes to overcome the lack of bankability in low-income housing.

 

This integrated approach would impact emissions of GHGs in a number of areas; the following list highlights what our team believes are the most important ones:

  • Design of energy-efficient buildings. Recent studies that calculate the CO2 emissions impacts of energy savings (McKinsey 2007; IPCC 2007) show that, on a life-cycle basis, energy efficiency in the buildings sector offers substantial low-cost opportunities to reduce CO2 emissions.  Most of those reductions come from electricity savings that could be tackled through key mitigation technologies and practices currently commercially available, such as: passive and active solar design for heating and cooling, efficient lighting and daylighting and improved building envelope: insulation and air sealing. The intelligent use of cement based products such as concrete and its characteristics (thermal mass, durability, versatility, virtually unlimited supply of raw materials, among others) will play a crucial role in this.
  • Design of more efficient infrastructure. As an example, recent work by the MIT (MIT 2012) has shown that every year some 46.5 mln metric tonnes of CO2 could be avoided on US highways alone if the rolling resistance were reduced by use of more appropriate pavement designs (including switch to cement-based pavements).
  • Further vertical integration: By actually covering a larger part of the value chain the problem of split incentives becomes less relevant; cement producers will become real solutions providers that make their money on the value for the customer, not on the volume of cement or concrete sold, thus incentivizing the development of less cement-intensive constructive solutions.
  • New products: By being closer to the final customer producers of cement and concrete will better understand their needs and be able to tailor their products better to the actual requirements; this will enable customers to use more sustainable construction practices; as an example, CEMEX’ new Fortium® concrete type allows to build insulating concrete form walls with significantly reduced use of steel rebar.
  • Consultancy on material selection: Market resistance, based on lack of knowledge and outdated specifications, is still one of the prime reasons why in many countries less GHG-intensive blended cements cannot exploit their full potential. A technology-neutral advice can help resolve this problem.
  • Improved end-of-life technologies: It has been shown that systematic crushing of concrete and exposing it to ambient air leads to an uptake of atmospheric CO2 in quite non-negligible amounts.

 

 

The concept of an integrated approach would address most potential levers along the value chain directly; however, it would also result in indirect effects: as the result of these activities external stakeholders are expected to better understand the role that cement and cement based products such as concrete play and what conditions are required to reduce emissions along the whole value chain.


Who will take these actions?

Cement & Concrete Manufacturers such as CEMEX have a huge opportunity to take a leading role to stimulate action over the whole value chain. They are in a unique position to create the necessary link between industry’s know-how and client’s requirements, and at two different scopes, should take active part and lead efforts:

1. Within their organizations, there has to be a change in the mindset and the way of doing things:

  • Redefining their role from material providers to integrated solution providers.
  • Creating alliances with experts to develop optimal integrated solutions.
  • Migrating from a one-way timely participation to a two-way ongoing collaboration with the rest of construction actors.
  • Establishing a forum from constant and open consultation with all stakeholders.

 

2. In collaboration with the rest of actors of the value chain, among other things, they have to:

  • Incorporate and/or partner with professionals and specialists from different fields (architects, consultants, specialists) to enrich and extend traditional approaches.
  • Support and assist developers and investors to overcome the failure of service fee structures to reflect long-term savings.
  • Work closely with local authorities from early stages of urban planning to benefit from more effective and affordable solutions to manage inter-connected challenges.
  • Collaborate with national authorities to develop and enforce an appropriate set of standards and codes.
  • Strengthen relations with end users, providing education and training, since there is a high agreement and medium evidence that changes in lifestyle and building occupant behavior patterns can contribute to climate change mitigation across the building sector.

 


Where will these actions be taken?

Although the current conditions (regulatory, cultural, climatic etc.) differ significantly all over the world there are no geographic limits to the application of this approach.

As for the organizational “Where?”, actions should be taken at two levels:

Within the sector, cement plants should continue to be the main focus for improvements to reduce emissions and could be tackled using wide-scale strategies (regional, country and/or company level depending on size of company). However, by expanding the scope and using LCA to optimize results over the entire life cycle, all the stages of the product life should be addressed (e.g. raw material extraction, distribution, disposal).

Downstream, constructions where cement is used are conditioned by many specific and local characteristics including cultural, social, economic and climatic factors; and narrower, individual approaches needs to be used. High impact outcomes require tailor-made solutions; one cannot generalize and come up with a one-size-fits-all proposal.

Consultancy services aim to support/complement company’s operations; to generate major impacts, they cannot be disassociated (services from operations). First actions should be coordinated in markets with strong presence by cement companies. Regional initiatives can easily be launched in main markets. Subsequent markets can be extended to progressively.


How much will emissions be reduced or sequestered vs. business as usual levels?

The proposal has the potential to reduce global emissions by 4.75 – 5.75 Gt a year by 2050. The following potential effects have been considered for this estimate:

  • Energy efficiency in buildings: 3.7-4.5 GtCO2e per year by 2030, based on (McKinsey 2007, WBCSD 2009, IPCC 2007).
  • Roads: 400 - 500 Mt /y, based on (MIT 2012); this does not include the direct effect of the higher albedo of cement on the earth’s heat balance.
  • Cement production:
    • Higher market share of blended cements: 150 Mt (half the potential of clk substitutes according to (WBCSD/IEA 2009, Gupta 2011)).
    • Better regulatory framework: some additional 300 Mt (based on (WBCSD/IEA 2009, Carbon War Room)).
  • End-of-life: 200 - 300 Mt, based on (ECRA 2008).

Furthermore, new products which are constantly being developed and incorporated in projects, have an additional impact on this equation that is currently difficult to estimate.

 


What are other key benefits?

Above CO2 reductions, an integrated approach that optimizes the performance over the whole life cycle of constructions would positively impact the three pillars of sustainability, increasing the total value of buildings. Some of the main benefits and advantages would be:

- Social: increased quality of life, improved health and comfort, reduction on impact on local infrastructure, successful synergy between owners, users and community.

- Economic: increased rent rates and selling prices, higher tenant attraction, reduced operational costs, protection against volatile prices of energy, reduced liability, increased productivity of occupants.

- Environmental: improved indoor environmental quality, reduced waste production, conservation and restoration of natural resources, protection and enhancement of biodiversity and ecosystems.


What are the proposal’s costs?

The strength of the proposal is that all resulting activities will actually lead to cost savings. The challenge is not in the amount of money that has to be invested, but rather in the change of the mindset along all the value chain.


Time line

In the short term, the approach has to be tested and refined in pilot markets. A parallel roll-out in markets with different characteristics will enhance the learning experience.

In the medium term, the approach slowly, but steadily becomes mainstream: the success of the first pioneers will attract other players; the improved exchange of information and the focus on sustainability will rise awareness along the value chain for existing regulatory and other non-financial barriers and will trigger activities to remove them.

In the long term, the vision of a fully optimized construction value chain with guaranteed optimal performance over the full life cycle of buildings and infrastructure elements will have become true.


Related proposals

None.


References

ECRA (European Cement Research Academy) 2008: Technical Report TR-ECRA 0004/2008: Release and uptake of carbon dioxide in the life cycle of cement, Düsseldorf.

Gupta A. (2011): Cement. Primer Report, www.carbonwarroom.com/sites/default/files/reports/Carbon%20War%20Room-%20Cement%20Report_1.pdf

Intergovernmental Panel on Climate Change (2007). Climate Change 2007. Mitigation of Climate Change. Working Group III Contribution to the Fourth Assessment Report of the IPCC. www.ipcc.ch/pdf/assessment-report/ar4/wg3/ar4_wg3_full_report.pdf

MIT (Massachusetts Institute of Technology) (2012): Civil engineers find savings where the rubber meets the road, web.mit.edu/press/2012/pavement-savings-tires.html

National Action Plan for Energy Efficiency (2009). Energy Efficiency as a Low-Cost Resource for Achieving Carbon Emissions Reductions. Prepared by William Prindle, ICF International, Inc. www.epa.gov/eeactionplan

McKinsey & Company (2007). Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost? U.S. Greenhouse Gas Abatement Mapping Initiative  www.c2es.org/docUploads/US_ghg_final_report.pdf

McKinsey Quarterly. A cost curve for greenhouse gas reduction. Per-Anders Enkvist, Tomas Nauclér, and Jarker Rosander. February 2007.

WBCSD (World Business Council for Sustainable Development) (2009): Transforming the Market: Energy Efficiency in Buildings, www.wbcsd.org/transformingthemarketeeb.aspx.

WBCSD/IEA (World Business Council for Sustainable Development / International Energy Agency) (2009): Cement Technology Roadmap 2009 – Carbon emissions reductions up to 2050, www.iea.org/publications/freepublications/publication/Cement_Roadmap.pdf.