Cement cos need to cut emissions aggressively to meet Paris climate accord: Study

Cement companies have to reduce their carbon emissions by more than double to meet the limit prescribed at the Paris climate deal. The cement sector accounts for six per cent of global carbon-dioxide emissions.

Cement, the second most polluting industrial commodity, is used in concrete, which is the most consumed product after water in the world.

Regulation for the cement sector has so far been light but rising ambitions for low carbon cities and tightening building regulations could drive changes up the chain, finds a new report ‘Building Pressure’ by CDP (formerly Carbon Disclosure Project).

CDP is an international non-profit that drives companies and governments to reduce their greenhouse gas emissions, safeguard water resources and protect forests.

The report analysed the world’s top 13 cement companies that command 16 per cent of global cement production and has total market capitalisation of $150 billion.

Newer plants, alternative materials

Indian companies topped the CDP league table thanks to lower carbon footprint during the cement making process, in part due to better access to alternative materials from other carbon intensive sectors. They also benefitted from newer and more efficient cement plants driven by high market growth in the region, in contrast to their European peers that relied on older cement plants.

Dalmia Bharat, Ambuja Cement and Cementos Argos are the best performing companies on climate-related metrics, with Taiheiyo Cement, Cementir Holding and Asia Cement Corporation ranking lowest, said the report.

Paul Simpson, CEO of CDP, said cement is a heavy and largely invisible polluter, yet taken for granted as a necessary building block of basic civilisation.

With pressure coming from multiple sources, including down the value chain in the form of building and city regulation, cement companies need to invest and innovate to avoid impending risks to their operations and the wider world.

At first this may seem challenging, but the cost will increase with every passing year. The management teams, regulators and investors need to think long term. There are solutions; cement companies just need to invest properly in finding it, he added.

However, there are opportunities for companies who act early on climate risk. Companies can reduce costs by making their cement plants more energy-efficient and secure their position in future sustainable cement markets by investing in low-carbon products. Governments can facilitate the development of these markets through regulation and incentives.

New technologies

Carbon Capture and Storage (CCS) is an important technology for creating low-carbon cement yet these projects are still largely at the pilot stage in the sector. Heidelberg shows some investment in CCS across various technologies, but otherwise progress is limited.

Cement companies are not incentivising long-term climate risk management through executive level remuneration, with only Cementos Argos including this, said the report.

Marco Kisic, Senior Analyst, CDP said cement companies should be looking at ways to further use alternative materials and fuels, improve the energy efficiency of their plants and accelerate investments in low-carbon technologies such as carbon capture and storage, which is crucial for their long-term viability.

Regulation may be the key driver for change here, and interestingly this may come from downstream as building regulators and owners shift their focus from operational emissions, to those associated with creating the buildings themselves, he added.

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