Examination of Witnesses (Questions 397
- 399)
TUESDAY 2 JULY 2002
MR MIKE
GILBERT, MR
RICHARD BOARDER
AND MR
ROBERT DAVIES
Chairman
397. We have the pleasure of the British Cement
Association before us; but the one nice thing, from sitting here,
is, you can see which members of the audience are really enjoying
the evidence of the previous witnesses, and you can give marks
out of ten for body language, in terms of their general agreement
and awareness, one way or the other. I have to say that the Cement
Association were all awake and alert, and certainly fully participating,
in body language terms, with the previous evidence, so we will
be very interested to hear what you have to say. Now, for the
record, I wonder, Mr Gilbert, if you would be kind enough to introduce
yourself and your colleagues?
(Mr Gilbert) Thank you, Chairman. I thought
you were concentrating on the questions and the answers, not the
audience. I am Mike Gilbert. I am the Chief Executive of the British
Cement Association. And on my right here is Dick Boarder, who
is the Fuel and Energy Manager of Castle Cement, one of the cement
companies in the UK, it is actually a part of the Heidelberg Cement
Group around the world. And on my left Rob Davies, who is Operations
Director for Lafarge Cement (UK), they recently bought out the
Blue Circle company, and Lafarge is now one of the largest global
cement players, and a French-based company, as you are aware.
398. Thank you very much. I must say, the thought
of you coming today was in my mind as I came down from Preston
on the train, and we got to Rugby, and I looked across at this
vast cement plant, which has now been transformed into a wonderful,
modern piece of equipment, and I was thinking, what is going on
in there, what should I ask them about. You have been quite insistent,
and I think with justification, as to wanting to give evidence
to the Committee, so just tell us, in a few minutes, what role
the cement industry can play, in your judgement, in dealing with
hazardous wastes in the United Kingdom?
(Mr Gilbert) I think the key point for us is that
we believe the cement industry can provide part of the waste solution
to the problems that we are all facing, and the challenge. It
is important, therefore, and an opportunity for us, we are at
a crossroads, we do have new regulations come in and new regulations
coming in; and we have just heard, from evidence already, that
there is still some confusion over some of the strategies, and
the hazardous waste list itself is not fully bedded down, but
when it does come in it will redefine new lists and new hazards,
and probably put something like 600,000 tonnes worth of additional
hazardous waste up for grabs, as it were. What are we going to
do about it? We see it as an opportunity, and, in fact, in a way,
some of the comments that were made, and I am glad you noticed
our body language, yes, for us there are opportunities to reduce
our costs by burning waste as fuel; but we always try to presage
that by saying that we make cement, that is our job, and we use
fuel to do that, and a certain quality of waste can be used as
fuels, and we can provide a significant solution to solving some
of those problems. There is one inhibitor I will come back to,
if I may, and talk about later on, which is the Substitute Fuels
Protocol, which is, we believe, now, a supplementary regulation
that supports the existing regulation established in the 1990s,
which has now been superseded by IPPC, the Waste Incineration
Directive and some work we have been doing with the Agency on
improved stakeholder dialogue, particularly over tyres and the
Tyres Protocol, which we have just agreed with them. So we believe
we would like this Committee, in its report, to encourage the
Agency to review the operation of the Substitute Fuels Protocol
and speed up the adoption of alternative fuels in our industry.
It is a non-statutory document and regulation, but DEFRA and the
Agency work very closely to it and it does provide a significant
inhibitor to the industry, in terms of the speed with which we
can adopt new fuels. And also we believe, a sort of slightly backward
step, that once we have demonstrated a fuel does provide a significant
environmental improvement, we have to stop using it while there
is a consultation process, before we can agree to restart using
it, which seems slightly backwards, to us. So we think there is
opportunity there. It is against the background, in addition to
that regulation, of course, of the Climate Change Levy, where
we have a three-way agreement with the BCA, the member companies
and the Government, to, over ten years, significantly improve
our energy efficiency, something like 25.6 per cent improvement
over ten years; and that is linked to two things which are significant.
One is the £500 million investment by the industry, or half
a billion, we have been talking about billions, so perhaps we
should talk about half a billion, which is based on new plant,
and new Rugby is part of that equation, so is a new plant for
Lafarge, so is a significant investment in Padeswood for Castle,
and so is a new plant that is being built up in Buxton, for the
fourth company that are involved. But also there is a significant
assumption that we will grow our use of substitute fuels, from
6 per cent, at the moment, in the UK, to something like 12 to
15 per cent; but, of course, that is not really comparable with
what is going on in Europe, where in France and Germany it is
30 to 40 per cent of the fuels that are used, and in Belgium almost
50 per cent. And we believe, as an industry, that there is a significant
opportunity for us to embrace these solutions, and, at the moment,
it is disappointing that the UK is lagging in its use of substitute
fuels, and we believe possibly we should be leading, and that
is something we would do. We know, from our experience, too, now,
particularly in tyres, which are a quite well-matured fuel, but
also in some of the liquid fuels we use, there is no loss of environmental
rigour, the Agency police us extremely rigorously, and we have
stepped up our response to that, as you would imagine we would
do. And the net effect in every case is that we improve our CO2
performance, our overall environmental emissions performance,
and, of course, we do actually improve the competitiveness of
the cement industry in the UK. And that is important, particularly
now that three-quarters of the industry is actually owned overseas,
it is very important that when these investment decisions are
made and taken the UK is seen as a place where it is sensible
to invest because we get a good return on investment and we can
compete; 90 per cent of the cement that is used in the UK is made
here, and we would like it to stay that way, we think it is good
for the UK to do that, it is certainly good for the companies
and, of course, for the BCA. So we believe we offer a waste solution,
and that is really why we are here today, we wanted to make that
clear. We would like to improve the speed with which we can adopt
alternative fuels, while maintaining the environmental rigour.
We would like to operate the 16 plants we have got in the UK,
creating solutions where they exist for wastes and waste streams,
and we know we can deliver on that. We have four plant currently
using liquid fuels, six using tyres, there are more consents and
applications in the pipeline, some of them are taking some time
to come through, but when they do come through we will be able
to raise that again. In terms of our commitments to the other
issues that surround it, sustainable development and our environmental
improvement, every plant in the UK has registration to ISO 14001,
which provides the environmental management infrastructure for
us; 11 of the 16 have EMAS, and three of the member companies
in the UK, which covers 15 of the 16 plants, have signed up to
a new international agreement. Under the auspices of the World
Business Council for Sustainable Development, the Cement Industry
Programme is actually going to be launched in Paris tomorrow,
and that is going to provide a 10- to 15-year significant investment
programme for the industry. I put that in the context, because,
if it costs £100 million to build one of these plants, we
are talking about long-term strategic decisions which companies
have to make, and clearly that is what we are after. The three
key messages, I think. We believe we should be seen as a waste
solution, and part of the solution and not part of the problem.
We believe that if you look at what happened in Belgium, with
their animal meals, they went to the cement plant as soon as they
had a major plant problem and asked them to help them resolve
the issue, which they did. Bone-meal in France is now about a
quarter of a million tonnes, being burned regularly and without
any issue. We currently use, globally, in the UK, 150,000 tonnes
of alternative fuels; we have done a calculation that says, if
you take into account other fuels and other problems that are
likely to be defined as hazardous waste, including waste oils,
we could be using between 1.2 million and 1.5 million tonnes.
We do not believe it is a significant problem for other industries,
because we believe, if there are six million tonnes of hazardous
waste out there, us taking a million tonnes of it is only going
to be a help and not a hindrance.
399. Can I just pick you up on that point. Thank
you for those very helpful opening comments, to put in perspective
the cement industry. You heard earlier, from Ms Weeks, the importance
which her company, and indeed, if you like, her part of the specialist
waste industry, attach to being able to use fuels of a high calorific
value, in terms of their process; and one could almost turn round
to hear what you have said, for obvious and understandable reasons
of enlightened self-interest, you said that there are certain
wastes that you can use. Is not there an element that the kind
of cherry-picking that goes on, in satisfying that criterion,
makes it more difficult for other parts of the waste industry
to do their job, because quite clearly they feel that there are
only certain amounts of material which they can use as a fuel,
and if you provide a very attractive option for that it does have
a fundamental effect on the service that they can offer? In your
taking-in policy of fuel, do you have any regard to the impact
you have on their industry?
(Mr Gilbert) I have to say, we tend to look at our
fuel as, as I said, quite a specific process. We select our fuels
on the basis of their ability to provide, if you like, the right
qualifications to contribute to the kiln-burning, and certainly
I am not saying that they do not provide that, we maintain the
quality of the cement, obviously, and the environmental performance,
and management of our staff. I will ask Dick Boarder in a minute
actually to come in and just talk a little about those technical
points. But I think the answer lies almost within the answer that
the ESA gave, I think they gave evidence that there are more high
temperature incineration kilns in Europe Member States than there
are here, and yet Europe uses far more waste fuels in cement kilns;
so the two things do not seem, to me, to be a problem, or a contradiction.
It just seems that we have got to get better at playing the game.
(Mr Boarder) The selection criteria for materials
that go into fuel are based on three fundamental concepts. Firstly,
we look at the health and safety aspects for our employees, and
that means, for example, that we do not get involved in medical
wastes, and things like that, we leave that to the specialists.
We look at the effect on our neighbours, which means that we are
very conscious of the potential for emissions; and that immediately
means we do not take in highly volatile materials, metals, such
as mercury, thallium and cadmium, we restrict them, we have very
strict limits. And then the product quality is very important
to us. In the cement industry, we make a product which people
are going to expect to last for hundreds of years; the building
we are in at the moment is based on cement, even the foundations
are always there, whatever there is above ground, and the architects
would not select our product if there were any question about
quality, so quality is, again, paramount. Having said that then
the Environment Agency step in and control the specification of
the fuel we use; we have long discussions about it. The actual
limits that get set within the specification for the fuel, and
the emissions for the cement kilns, are, to some extent, based
on the health effects of emissions; what we do is, we model mathematically
the dispersion from our chimneys, and, as you came past Rugby,
you would see they have a chimney, we do recognise that we need
to take great care there, so the perception issues are very important.
So we model that very thoroughly, and we make sure, and the Environment
Agency follow these calculations with us, that we do not impinge
on any of the maximum exposure limits set by the World Health
Organisation, and people like that. So we believe we are very
tightly specified. That means that there are materials which we
cannot take in our kilns, clearly we accept that, and so we do
see there is a need for high temperature incineration; and the
companies who make our fuels work fairly closely, in fact, with
the waste companies who can take those materials, so that there
are appropriate disposal routes for them. So we are fairly comfortable
with the position at the moment; but, as Mike Gilbert said, the
quantity of waste that is going to be becoming available, and
particularly if waste oils, and things like that, become classed
as `hazardous' by the Environment Agency, then we believe there
is plenty of material there for all existing incinerators, as
well as a lot more cement kilns.
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