Chatham House argues more is needed from the cement industry to reach Paris Agreement level emissions

Cement is responsible for roughly 8% of global CO2 emissions and is used to make concrete, and worryingly, global cement production is predicted to increase from 4 to over 5 billion t by 2050 as cities continue to rapidly expand and government and businesses worldwide invest in major new infrastructure projects.

However, reducing cement sector emissions is more challenging than it is for other sectors. More than 50% of emissions are inherently linked to the cement production process. Emissions cannot be reduced simply by changing fuels or increasing the efficiency of plants and instead require the transformation of cement itself either by blending it with alternative materials or by developing novel low-carbon cements.

"If we are to achieve the Paris climate goal of keeping global warming to well below two degrees, there can be no sectoral exceptions," said report author Johanna Lehne. "Regulation of the industrial sectors has so far been light but as confidence grows around decarbonisation of power and mobility, cement companies should expect that regulatory frameworks for reducing emissions will come under greater scrutiny from investors, civil society, and policy-makers.”

The report finds that the development and deployment of lower carbon cements needs to be stepped up, disruptive trends in the broader construction sector could unlock new opportunities to reduce emissions more quickly, and that there are significant opportunities for companies that align their strategies with decarbonisation, and growing risks for those that are unable to do so.

 

 

 

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As a recent report by CDP revealed, investors are increasingly expecting cement companies to be transparent about their exposure to climate change risk and how they manage these. Cement companies are also facing growing challenges from local communities: concerns over environmental impacts of limestone mining have led to quarry closures in the Netherlands and have halted new quarry developments in Switzerland.

These trends are forcing cement companies to re-examine their business models. The largest firms are already looking to offer a growing range of services, from speciality cements to intricate delivery services tailored to complex projects. A shift towards a more service-oriented business model might offer new possibilities for value creation during a period in which market conditions have been challenging and financial performance has been mixed.

“Cement companies are reducing their emissions in two key ways: by using more alternative fuels and deploying alternative materials," said Carole Ferguson, Head of Investor Research at CDP. "Shifting away from fossil fuels, and using less carbon-intensive materials, will help these companies decarbonise in the short to medium-term, but this is not enough for the sector to be in line with two degrees as outlined in the Paris Agreement. It is very encouraging to see that companies are investing in R&D, especially in China, which is such an important cement-producing market, but we need to see much more innovation and investment from the cement industry globally.”

 

Read the article online at: https://www.worldcement.com/special-reports/13062018/chatham-house-argues-more-is-needed-from-the-cement-industry-to-reach-paris-agreement-level-emissions/