Memorandum submitted by the Mineral Products
Association—Cement
EXECUTIVE SUMMARY
— Early action has been taken by the cement
industry to tackle climate change. Between 1990 and 2008, the
MPA Cement member companies have reduced direct CO2
by 38.8%. 2008 emissions were 5.18MtCO2 lower than
1990.
— This substantial reduction is partly
due to rationalisation and investment in new kiln technology and
partly due to reduced output. In 2008 the affect of the recession
meant that GB cement production was 15% lower than in 2007. 2008
production levels were the lowest since 1954.
— The current carbon reduction policy mix
is complex and additional regulation and taxation are not necessary.
Further step change emissions reductions will be delivered by
support rather than regulatory mechanisms.
— Emission trading is needed on a global
scale to avoid imbalance in the market bought about by the asymmetric
carbon tax from emissions trading otherwise investment in new
low carbon technologies will be diverted elsewhere.
— Best practice should be encouraged by
using benchmarking because positive measures are more likely to
be accepted in a globally linked trading system.
— Benchmarking, leading directly to the
setting of standards, would provide the least cost optimal method
for promoting technological change and development of cleaner
technologies within manufacturing industry.
— Carbon capture and storage is a primary
candidate for step change emissions reduction in the cement sector,
however, the technology is in its infancy, even in the power generation
sector, and a great deal of research needs to be carried out.
— Government-funded demonstration projects
in the power generation sector should be designed to deliver widespread
benefits including in industrial sectors such as cement eg proving
links to pipeline transport hubs.
— Government support will also be needed
for CCS projects in the industrial sector. Sectors such as cement
will provide the second wave of CCS deployment but only with the
right support.
THE MINERAL
PRODUCTS ASSOCIATION
1. MPA Cement is part of the Mineral Products
Association (MPA), the trade association for the aggregates, asphalt,
cement, concrete, lime, mortar and silica sand industries. MPA
was formed in March 2009 by the amalgamation of the British Cement
Association, (BCA), Quarry Products Association, (QPA), and The
Concrete Centre, (TCC).
2. The cement manufacturing members of the
MPA (Hanson Cement, Lafarge Cement UK, CEMEX UK and Tarmac Buxton
Lime and Cement), are the major domestic manufacturers. Services
related to climate change issues are also supplied to Quinn Cement.
3. The comments below reflect the collective
views of the above companies whose production accounts for over
90% of the Portland Cement sold in the UK.
INQUIRY QUESTIONS
4. What opportunities exist for the creation
of a green new deal whilst pursuing a low carbon economy? Which
technologies have the biggest potential? Has the Government done
enough in its stimulus package?
4.1 Climate change and CO2 emissions
reduction are vitally important subjects for the cement and concrete
industry for two prime reasons; firstly because cement manufacture
leads to the emission of CO2 directly from the process;
and secondly, because concrete, when used in properly designed
buildings and structures can help to reduce building energy related
emissions far exceeding those generated in production of the constituent
materials. Furthermore, concrete is an essential material which
will be needed to adapt to climate change and the consequential
weather events that may result from a shift in the earth's climate.
4.2 In the cement industry a great deal
of early action has already taken place. Over the last 10-15 years
there has been widespread rationalisation and investment in lower
carbon technology. Between 1990 and 2008, the MPA Cement member
companies have reduced direct CO2 by 38.8% and 2008
emissions were 5.18MtCO2 lower than 1990.
4.3 Only 40% of the CO2 emission
from the clinker (cement intermediate) process results from the
combustion of fuel, the remainder evolves from the "calcination
process" where limestone is heated and drives off 60% of
the CO2 emitted from the process. This means that even
if 100% biomass fuel supply could be sourced, then there would
still remain a significant emission of CO2 from cement
production.
4.4 Cement is an essential material for
the construction and maintenance of a modern society and as such,
low carbon technologies will be needed to further address emissions
in the industry. The most significant of the candidate technologies
is carbon capture and storage (CCS). CCS is in its infancy in
the power generation sector and considerable research is needed
to develop the technologies and expand their applicability beyond
power and into industrial processes such as cement.
4.5 Industrial scale CCS in the UK cement
industry will not take place until there is a fully developed
transport and storage network and the development of this will
depend upon the level of interest that HM Government places in
CCS and the extent to which broader infrastructure requirements
are included in the power generation demonstration projects.
5. How realistic are the Committee on Climate
Change's projections for the use of different types of new technologies?
What is needed to achieve the development and deployment of them?
5.1 MPA Cement believes that the Committee
on Climate Change is overly optimistic in its view on when certain
low carbon technologies will be deployed in industry. The Committee's
first report[50]
stated that carbon capture and storage is clearly feasible
and no fundamental research breakthrough required for the cement
industry. Whilst there is a theoretical opportunity to deploy
CCS in the cement sector, there is a great deal of research needed
to ensure that the product (which is very carefully regulated
by European Standards) is unaffected by the changes to the kiln
system.
5.2 There are two prospective technologies;
post combustion and oxy-combustion. Whilst the "end of pipe"
post-combustion technology is less intrusive in the process, according
to the latest research[51]
it is predicted to be more expensive than oxy- combustion. However,
oxy-combustion is at an earlier stage of development than post-combustion
and its use would require the fundamental re-design of a cement
plant. Many technical issues centre on burning the raw materials
in an oxygen rich environment either in the precalciner or potentially
in the kiln itself. Research on this and how product formation
may be affected by high CO2 concentrations is also
needed. However, the predicted cost per tonne of CO2
emissions avoided is about 40% of that for post-combustion capture.
Retrofitting this technology is not really an option unless the
plant is undergoing a major re-fit.
5.3 The Committee on Climate Change first
report[52]
also suggests that large savings (12%) can be made from switching
from wet process to dry process kiln technology in the cement
industry. Following the recent mothballing of two wet kilns and
the permanent closure of a wet kiln at the end of 2008, at August
2009 there are no fully wet kilns operational in the UK. This
would indicate that the projected saving quoted by the C on CC
is a significant overestimate.
6. What are the most important drivers, nationally
and internationally, for a low carbon economy in the UK? To what
extent do the outcomes of the international negotiations at Copenhagen
matter?
6.1 International emissions trading will
play a significant role in driving down greenhouse gas emissions.
However, whilst there remains an unequal global price for carbon,
sectors such as cement will be vulnerable to carbon leakage whereby
production, jobs, emissions and opportunities for low carbon investment
are lost to overseas competitors in non-carbon constrained economies.
6.2 The outcome of COP-15 will be significant
for cement companies in the UK. The details of the international
agreement will determine the parameters by which the EU ETS Directive[53]
carbon leakage assessment is revisited and thereby the amount
of free allocation these installations will receive for EU ETS
Phase III. If the Copenhagen deal does not lead to equivalent
carbon dioxide regulation in countries that have the ability and
capacity to supply cement to the UK then the consequences could
be catastrophic for UK cement production and the security of supply
of an essential building material will be under threat. The latest
research[54]
confirms that at a carbon price of €25/tCO2, the
use of auctioning to distribute Phase III allowances could leave
100% of the domestic UK cement manufacture vulnerable to carbon
leakage.
6.3 Whilst auctioning potentially damages
the competitiveness of the UK cement industry, benchmarking has
the ability to provide a marker for improvement. Internationally
agreed clinker benchmarks for CO2 emissions will represent
a comment language for the global cement industry. COP 15 is an
ideal opportunity to introduce globally applicable industry benchmarks
that could provide a level playing field in the market place.
7. How important is it to the UK economy
that it becomes a leading developer and exporter of low carbon
technologies? What Government policy needs to be in place to do
this?
7.1 The UK will not become a leader or an
exporter of low carbon technologies in the cement industry unless
significant funds and research commitments are made.
7.2 In terms of CCS, the determination of
what constitutes a "capture ready" cement plant will
not be possible until there is a proven technological route, ie
until there is clarity on what technology is required. Until then
it is not possible to specify how a new plant could be designed,
what size of scrubbing equipment is required &c.
7.3 Grant and funding availability for industrial
CCS will help to promote the construction of pilot plant. Pilot
plants will be crucial to further the knowledge in the cement
sector and ultimately provide evidence for the speed at which
CCS can be universally deployed, if proven to be technically and
economically possible.
7.4 The European Commission non-paper[55]
aimed at the co-financing of 12 CCS demonstration projects has
missed an opportunity in the cement industry. It states in its
eligibility criteria that a cement CCS demonstration project should
be 500kt/y avoided CO2 at 85% capture. This is not
demonstration scale but full scale for many of the UK plants and
the UK Government should aim to approach CCS in the industrial
sectors at a more achievable and realistic level.
8. Are we seeing impacts of a downturn on
demand and investment in low carbon technologies? If so, how can
this be addressed given the need to meet long term targets? What
obstacles to investment are there?
8.1 Exhaust gas from a cement kiln contains
about 25% CO2—appreciably higher than in coal
fired power generation (about 14%). Although the concentration
of CO2 in the exhaust gas makes cement CO2
capture an attractive proposition when compared to power generation,
economies of scale make it more expensive. A single 2GW coal fired
power station emits approximately the same amount of CO2
as the whole of the UK cement industry.
8.2 IEA GHG (2008) have estimated that a
post-combustion capture fitted cement plant could cost around
€558 million (more that twice the cost of a non-CCS equivalent)
but providing a potential emissions avoided efficiency[56]
of 77%. An equivalent output oxy-combustion plant, however, could
cost €327 million (25% more expensive than the non-CCS plant)
but at an emissions avoided rate of 52%.
8.3 Operational costs are potentially considerable
too; they double for the post-combustion option and increase by
25% for oxy-combustion compared to non-CCS plant.
8.4 Although these costs make the oxy-combustion
plant comparatively attractive it must be noted that oxy-combustion
is at a much earlier stage of development compared to post combustion
and for cement making it would radically change the design and
operation of the kiln.
9. What is the potential role for public
procurement and policies such as the 2016 zero carbon homes target
in driving investment, development and job creation?
9.1 Public funding is vital in a period
of recession where in 2008 cement production in the UK reached
its lowest level since 1954. Funding for low carbon technologies
is difficult to source in profitable times as the UK competes
against international business units within the same multinational
cement companies and where investment decisions are made outside
of the UK. Significant funding is needed in both technologies
to further low carbon production in the cement industry and ensure
the cement and concrete products are used in low carbon thermally
efficiency structures.
9.2 There is a significant opportunity for
public sector procurement to stimulate low carbon investment whilst
maintaining jobs in material supply sectors such as the mineral
product industry. Sustainable consumption and production strategies
should be aligned so that locally produced and locally sourced
material can be used to develop renewable (eg tidal) and low carbon
energy (eg nuclear) supply infrastructure. The same policies can
be used to develop road and rail networks, where construction
products from the mineral products industry will be essential
materials. Early commitment from Government regarding public funding
for energy, transport, and public buildings will help to retain
vital jobs in the UK many of which are in vulnerable rural areas.
September 2009
50 9 Page 47 Back
51
IEA GHG (2008) IEA Greenhouse Gas R&D Programme (IEA GHG),
"CO2 Capture in the Cement Industry", 2008/3
July 2008. Back
52
Page 68 Back
53
Directive 2009/29/EC of the European Parliament and of the Council
of 23 April 2009 amending Directive 2003/87/EC so as to improve
and extend the greenhouse gas emission allowance trading scheme
of the Community. Back
54
Assessment of the impact of the 2013-2020 ETS proposal on the
European cement industry. Final Report, November 2008. Boston
Consulting Group. Back
55
Modalities for co-financing of CCS and innovative renewables demonstration
projects under Article 10a paragraph 8 of Directive 2003/87/EC
(Emissions Trading Directive) ("NER 300") Back
56
Based on emissions avoided including power import and exports Back
| 
