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Delivering decarbonisation with demand-side initiatives

Published by
World Cement,

Adam Auer and Sarah Petrevan, Cement Association of Canada (CAC), explore an industry-wide project to decarbonise cement and discuss the role of demand-side initiatives in this process.

Canada’s cement industry is charting a course to reduce its carbon emissions by up to 40% by 2030 and deliver net zero concrete by 2050. It is essential that all major emitters do their part, not just to contribute to the health and well-being of the environment, but also to ensure the industry’s future economic competitiveness in a rapidly decarbonising world.

Globally, the cement industry is responsible for approximately 7% of carbon emissions with the highest carbon intensity of any industry per unit of revenue.1 In Canada, the manufacture of cement accounted for 1.5% of the country’s emissions in 2019. Given that the use of cement is fundamental to economic development with a projected global market size of US$463 billion in 2026,2,3 reducing its embodied emissions is essential.

Approximately 60% of the cement industry’s emissions are process-inherent, resulting from the calcination reaction of limestone, and 40% are from the fossil-fuel emissions generated to produce the high temperatures (approximately 1450°C) required to achieve that process. Process emissions are particularly challenging to mitigate since net zero requires that either the entire process must be replaced by low emission alternatives, or the emissions must be captured from the process and permanently stored.

While the scale and scope of the challenge cannot be understated, the hard work has already begun. In addition to supporting carbon pricing and other regulatory approaches to reduce emissions, the cement industry is at the centre of a growing incubator for industrial decarbonisation in Canada. Launched with a partnership between the Government of Canada and the Canadian cement sector, the collaborative effort to support the development and implementation of a ‘Roadmap to Net Zero-Carbon Concrete’ is underway in earnest. This work will provide the Canadian cement and concrete industry with the technologies, tools, and policies needed to achieve net zero carbon concrete by 2050.

Canada’s cement industry was also the first industry-wide participant in the federal government’s ‘Net Zero Challenge’ – a voluntary initiative that encourages Canadian businesses to develop and implement credible and effective plans to transition their facilities and operations to net zero emissions by 2050.

But what will it take to accomplish these targets? Much has been stated in recent literature about the cement industry’s challenges as a ‘hard-to-abate’ sector. Along with steel, chemicals, and heavy-duty transportation (aviation, trucking, shipping), cement’s transition to net zero is not nearly so straightforward, because the technology is lacking, or it is cost prohibitive. This is especially true when considering the ‘first-in-kind’ or ‘first commercialisation’ technologies that the cement industry will require to increase the supply of net zero cement and concrete, namely carbon, capture utilisation and storage (CCUS).

That is just the tip of the iceberg. In addition to the need to scale up the technologies required to decarbonise cement products, there also needs to be a similar increase in the demand for the lower-carbon and net zero products. Those products must not only emerge but diffuse through the construction market until they become the new normal.

Less has been said about how to support the uptake of lower-carbon or net zero cement and concrete. How will these be pulled into the market? Experience shows that even the adoption of simple solutions, such as Portland-limestone cement and blended Portland-limestone cements can be a challenge for the construction sector which sees risk in novelty and tends to resist change in favour of ‘tried and true’ methods.

A business case for deploying net zero technologies such as CCUS requires a high certainty that there will be a buyer for the materials produced and that the carbon reduction will have a market value in either a regulated market (e.g., carbon credits, offsets, etc.) and/or in private markets willing to pay a premium for lower-carbon products. While there remain underutilised opportunities to reduce emissions at little to no cost, in nearly all cases, the cost of producing materials with net zero technologies will be higher than production with conventional technologies. This poses a challenge in a competitive marketplace. Higher production costs are to be expected, at least in the initial stages of deployment, until full-scale deployment of the technology reduces costs, and a broader economic transition takes hold. The cost of materials production depends on capital expenditures as well as operating expenditures – the latter including costs for energy, raw materials, and for transporting and storing carbon, if applicable. Though capital costs can be supported through government programmes such as Canada’s Strategic Innovation Fund-Net Zero Accelerator, or the proposed CCUS Investment Tax Credit – high operating costs still leave net zero emission technologies at a competitive disadvantage. Dramatically scaling up demand-side policies will help to secure the business case for investment and operation.

Two key demand-side strategies being developed in Canada with the support of the Canadian cement and concrete industry include procurement policies and the codes, standards, and specifications needed to support them, and targeted market price assurance mechanisms, such as Carbon Contracts for Difference (CCfD).


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