Memorandum submitted by the British Cement
Association (CCB 16)
EXECUTIVE SUMMARY
1. Long-term greenhouse gas (not just CO2)
targets are needed to address climate change and give all aspects
of the economy certainty over policy goals.
2. The Climate Change Bill targets should
include aviation and shipping to ensure that all sectors contribute
to climate change mitigation.
3. Significant carbon dioxide reduction
has already been delivered in the UK cement industry and with
its carbon strategy the UK cement industry is aiming for further
savings. Short to medium term CO2 reductions will be
relatively small. Larger savings could only be achieved through
CCS (carbon capture and storage) and this would be dependant on
a pipeline infrastructure being put in place by Government and
the ability to pass the additional cost of capture through customers.
These can only be made with the correct regulatory and market
frameworks where new investment is not penalised or hampered.
4. Carbon budgeting is an appropriate approach
and budget periods should provide clear detail of sectoral contribution
for budget periods and detail should be released providing at
least 15-year horizons.
5. Industries should not be expected to
reduce emissions beyond their abatement potential. Additionally,
product life cycles and whole building performance should be taken
into account when designing schemes and setting targets.
6. International clean development mechanisms
could be supplemented using domestic project mechanisms. There
should not be a limit on the use of flexible mechanism credits,
either in the EU ETS traded sector or for use against the national
target; there should be equivalence between the two systems.
7. Banking is essential in order to manage
any budget correctly. It will also encourage early action and
provide a "buffer" in the following target period. Although,
BCA agree that borrowing should be limited to 1%.
8. The inclusion of enabling powers could
lead to further trading schemes. This could add more complexities
in an already complex legislative framework. In order that the
UK is a model for other Member States the overlapping climate
change policy measures need to be reviewed and rationalised.
9. The UK should also take a lead in developing
a global trading scheme. International agreement to ensure that
UK industry is not unduly affected by the European regional or
national approach is therefore necessary for industries that are
subject to international competition such as cement. A global
CO2 market will ensure that there is a level playing
field and ensure all citizens contribute to address a global problem.
Transitional arrangements could be put in place in the interim
toward a global trading system.
CLIMATE CHANGE
POLICY AND
THE UK CEMENT
INDUSTRY
1. The UK Cement Industry. The British Cement
Association is the trade and research organisation that represents
the interests of the United Kingdom's cement industry in its relations
with Her Majesty's Government, the European Union and relevant
organisations in the United Kingdom. The members of the BCA (Castle
Cement, Lafarge Cement UK, CEMEX UK Cement and Tarmac, Buxton
Lime and Cement) are the major domestic manufacturers of Portland
Cement producing over 90% of the cement sold in the UK. Additionally,
BCA supplies services concerning climate change issues to Quinn
Cement.
2. Energy represents an increasing proportion
of the variable costs of cement manufacture (>35%) and it is
therefore a primary concern of the industry to take all cost effective
measures to improve energy efficiency and thereby reduce its emissions
of carbon dioxide.
3. The cement industry supports the principle
of emissions trading. Through their parent companies, Lafarge
Cement UK, Castle Cement, and CEMEX are committed to carbon reductions
through the World Business Council for Sustainable Development
Cement Sustainability Initiative, (WBCSD CSI). In addition, Tarmac,
Buxton Lime and Cement has undertaken to adopt the commitments
within the WBCSD CSI.
4. SPECIFIC INQUIRY
ISSUES
4.1 Targets
4.2 Importantly, recently published emissions
projections recognise that the UK is well on target to meet its
Kyoto commitment and as such does not need to take drastic measures
in order to show leadership on climate change. However, long-term
climate change targets are necessary in order to address the most
important environmental issue facing society. Unilateral action
by the UK Government will damage the UK economy in the long term
and as such multilateral long-term action is required so that
all contributors to climate change form part of its mitigation.
Government should commit to regular review of its "go it
alone" policy on climate change targets to ensure that UK
businesses, which operate in internationally competitive markets,
are not unduly affected by UK climate change policy.
4.3 Although the UK contribution to global
GHG reduction is important, it is also critical for business certainty
that long term targets are established with interim goals. However,
care should be taken not to damage the UK economy in the short
term. Ironically, the UK could achieve many of its climate change
targets by displacing manufacturing industry to non-carbon constrained
economies. For example third party imports of cement have been
steadily increasing over recent years; Cembureau (European Cement
Association) has calculated that the transport of cement imported
into Europe can add 10% additional carbon dioxide to one tonne
of cement. These additional emissions would not appear in the
UK National Greenhouse Gas Inventory showing domestic targets
are being met but the environment as a whole would be worse.
4.4 The Government proposed targets are
ambitious and will need action from all sectors of UK society.
For this reason it does not follow that aviation and shipping
emissions should be excluded from the targets in the draft Climate
Change Bill because "limited action" will only result
in `limited success.
4.5 It is also important to point out that
emissions from the UK Cement Industry are already more than 28%
below the 1990 level and that in accordance with the CCA agreements
the industry has already committed to meeting targets on fuel
efficiency and waste derived fuel use, demonstrating the cement
industry's commitment to climate change and waste recovery targets.
This early action should be noted when the consideration is given
to the areas of the economy that can potentially contribute to
the savings needed by 2020 and 2050.
4.6 Global warming is a function of all
greenhouse gases. Critically, the UK should not only focus its
attention on CO2 because there is the danger of ignoring
other, more damaging, gases. The conversion of GHG (greenhouse
gas) releases into CO2e (CO2equivalent) is well understood and
as such the Government should base its climate change targets
on all GHGs. The draft climate change bill should be amended to
consider all GHGs.
4.7 Carbon budgeting
4.8 Five-year carbon budgets are useful
for management purposes, but for industrial certainty longer term
planning is needed. In an industry such as cement five years is
very short, where it takes around seven years to design, build
and gain the necessary permits for a kiln that will then operate
for around 30 years. Consequently three budget periods of five
years each should be the minimum horizon for the climate change
bill.
4.9 For effective carbon budgeting and to
provide sufficient certainty for industry and other sectors of
the economy, the carbon budgets should not just exist as a national
cap/target, rather they should include a breakdown of where the
emissions reductions are expected to come from ie it is important
to know the contribution by the traded (EU ETS)/non-traded sectors
in sufficient detail that industrial sectors such as steel, cement,
glass etc can effectively plan.
4.10 Consequently the climate change bill
should place a requirement on Government to update annually projections/targets
for the emissions from all sectors of the economy, through to
the 2020 and 2050 time horizons.
4.11 However, flexibility in the system
is essential in order to adapt to an environmental issue that
will demand significant adaptation in future years. As such the
budgets should be subject to regular review and adjustment.
4.12 Climate change is a global issue and
the use of flexible mechanisms will allow the climate change challenge
to be addressed in the most cost effective areas. There should
not be a limit on the use of flexible mechanism credits, either
in the EU ETS traded sector or for use against the national target;
there should be equivalence between the two systems.
4.13 However, domestic action is also necessary
and domestic projects should be promoted. In the cement sector
the climate change agreements promote the use of alternative waste
derived fuels, but the CCAs have a limited life and new systems
are needed to promote alternative fuel use. Domestic projects
could be one way of helping to shift the use away from fossil
fuels toward alternatives. In doing so, the emissions from landfill
sites and incinerators, which are not part of the EU ETS, will
be avoided.
4.14 Banking is essential in order to manage
any budget correctly. It will also encourage early action and
provide a "buffer" in the following target period. Although,
BCA agree that borrowing should be limited to 1%. This will ensure
that the budget cannot be exploited for party political reasons
and allow time for policy adjustment.
4.15 Adaptation
4.16 All countries and all industries will
need to adapt to climate change. The cement industry has good
potential for the development of low carbon technologies but will
need Governmental assistance. There is a role for government in
supporting research to accelerate the development of new carbon
abatement technologies, whether in research institutions or private
industry. The cement industry is committed to a clear path of
carbon dioxide reduction[7]
and has begun to investigate the opportunity for Carbon Capture
and Storage (CCS). At present research into CCS is dominated by
the Electricity Supply Industry (ESI) and oil companies. As one
of the largest single point emitters of carbon dioxide with a
higher carbon dioxide concentration in the exhaust gasses than
other industries the cement industry provides an ideal opportunity
for CCS research. Government should do more collaborative research
to investigate CCS options for industrial emitters such as the
cement industry and not concentrate its research funding on the
ESI and oil sectors. The value of this work would be to ensure
that the UK becomes a world leader in CCS. This would allow the
export of technologies and knowledge to assist developing countries
adapt to climate change.
4.17 In addition to encouraging the use
of novel technologies such as CCS and promoting a greater use
of renewable and waste derived energy sources, there is still
plenty of scope for the Government to capitalise on energy saving
improvements in buildings, especially in the field of thermal
mass. Thermal mass is a term used to describe the ability of a
material to absorb and retain heat. It can be used to good effect
in the fabric of a building by allowing it to absorb excess heat
gains during the day and subsequently releasing them at night
with the aid of natural or mechanical ventilation, this is particularly
relevant in a warming climate. This process has the effect of
moderating the temperature swing within the building and lowering
the peak temperatures experienced during the summer by approximately
3°C.[8]
The use of thermal mass techniques can mitigate the use of energy
consuming techniques such as air conditioning.
4.18 Traditional masonry built houses and
larger buildings incorporating concrete elements provide a high
a level of thermal mass and perform particularly well. For example,
the energy consumption of a naturally ventilated high thermal
mass office is typically about half that associated with a modern,
good practice air conditioned office such as Building Type Three
described in Econ 19.[9]
This is particularly important given the recent findings of research
undertaken by Arup and commissioned by DTI, which highlights the
key role that thermal mass is set to play in minimising overheating
and helping avoid air conditioning as climate change drives up
temperatures. Predicted changes in the UK climate, indicate that
average annual temperatures are likely to increase by 2°C
to 3.5°C this century.[10]
This will result in warmer summers and increase the demand for
energy intensive air conditioning systems. To counter this, the
exploitation of thermal mass in building design could make a useful
contribution in preventing growth in this area. As the operation
of buildings account for a large proportion of UK energy use,
even a small improvement in this sector will translate into significant
savings in both energy and CO2 emissions.
4.19. As the largest procurer of construction
industry services, Government is in a privileged position to set
the benchmark for sustainable construction projects for schools,
hospitals, other public buildings, as well as transport infrastructure
projects. Setting benchmarks in the built environment that can
be exported to developing nations will signal the UK as a leader
in climate change issues. These too should not be short term solutions,
but look to the longer term and be based on whole life performance
not just initial or lowest cost. The same principles should be
extended to local government. The climate change bill could include
measures for Government to address the whole life performance
of buildings.
4.20 Committee on climate change
4.21 BCA agrees that an independent body
should be set up to oversee the carbon budget. The independent
committee on climate change should include a range of representatives
of stakeholder groups and experts. Industry should be well represented
because industry experts will be able to provide crucial information
on abatement potential of industrial sectors that will be contributing
significantly to the reduction targets.
4.22 To ensure that the Committee can function
effectively its tenure must last at least one or two budget periods
five to 10 years. This will make sure that a level of consistency
is delivered within the longer term target horizons.
4.23 In devising emission reduction targets
the Committee will need to consider the balance of effort carefully.
Industry has made significant advances in the area of CO2
reduction and as such greater emphasis now needs to be placed
upon the domestic and transport sectors.
4.24 Enabling powers
4.25 The enabling powers that allow the
Secretary of State to establish greenhouse gas emission trading
schemes by means of secondary legislation should be used with
caution. At present the CCA and EU ETS are directed towards the
same goals and provide a clear example of the "double banking",
contrary to the EU and UK aim of "Better Regulation".
This was highlighted by BCA in its response to the Hampton and
Davison enquiries. These two trading schemes are incompatible,
place burden on industry, and generate carbon credits that require
unnecessary double accounting arrangements. The advent of additional
GHG trading schemes, such as the proposed Energy Performance Commitment
could further add complexities in an already complex legislative
framework. It is particularly important that the proposed EPC,
that is intended to capture emissions from non-energy intensive
commercial uses, does actually target them specifically and avoids
capture of energy intensives already contributing significantly
to climate change mitigation. In order that the UK is a model
for other Member States the overlapping climate change policy
measures need to be reviewed and rationalised.
4.26 International implications
4.27 The UK should also take a lead in developing
a global trading scheme. International agreement is necessary
to ensure that UK industry is not unduly affected by the European
regional approach particularly for industries that are subject
to international competition such as cement. A global CO2
market will ensure that there is a level playing field and ensure
all citizens contribute to address a global problem.
4.28 Until the arrival of a global scheme
the UK should protect the interests of the UK economy by advocating
EU border tax adjustments on products arriving from non-carbon
constrained economies. Border tax adjustment will propagate the
transition to a global trading system more quickly in a field
of the environment where speed of action is vitally important.
Border tax adjustment will also minimise the amount of "carbon
leakage" due to production shifts from the UK to other countries.
4.29 The UK cement industry is mainly owned
by large multinational companies and key investment decisions
in the cement industry are generally taken outside of the UK.
If the supply of cement from developing countries is not subject
to the same pressures to address climate change as the UK then
investment (and emissions) will be displaced. This is one example
counter to the validity of the Government's view that the Bill
will act as an effective example to drive international climate
change policy post-2012.
British Cement Association
May 2007
7 Working Towards Sustainability-a report
from the UK cement industry on its progress towards sustainability. Back
8
Building Research Establishment. Information paper IP6/01. Modelling
the performance of thermal mass. N Barnard, P Concannon, Denice
Jaunzens. April 2001. 12 pp. Back
9
Energy Consumption Guide 19. Energy Use in Offices. Best Practice
Programme. 2003. Back
10
Climate Change Scenarios for the United Kingdom. The UKCIP02
Briefing Report. April 2002. Back
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