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Potential Impacts of Climate Change on Cement Industry
PCA MTC Steering Committee, May 2008
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Among other things, we have to face the fact that whether we agree that acrisis of rapid climate change exists, the political drive is pushing this toreality and regulation is eminent.
We have to be prepared!
What do we need to Know?
What is coming - requirements
What are our emissions
What are our options, specific to our operations and location
How much will it cost
Which is the best application
How easy is implementation
Climate Change Impact
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But first, where is it coming from? Sources of CO2 Emissions
Power Stations
Waste
Disposal
LandUse/BiomassCombustion
Residential,
Commercial,Other
Fossil fuel retrieval,
processing/distribution
Agriculturalbyproducts
20.6%
29.5%
19.2%
19.2%
12.9%
1%
1%
8.4%
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What about my house? Sources of CO2 Emissions
Waste
Vehicles51%
5%
26%
18%
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Definitions
Greenhouse gases (GHG) Not Just CO2 :
Carbon dioxide (CO2), Methane, Nitrous oxide (N2O, not NOx),hydrofluorocarbons, perfluorocarbons and Sulfur hexafluoride
Carbon CreditsTons of carbon emissions granted to each facility,
similar to a permitted emission limit except it decreases over time
What is comingDefinitions and requirements
Carbon Credits Example :
A Cement operation emits 2,000,000 tons of carbon Dioxide per year
If the law says they will reduce CO2 by 25% over time :
Plant receives 1,500,000 carbon credits -
2,000,000 tons CO2 per year X 75% = 1,500,000 carbon credits
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Definitions
Carbon credit allocation vs. auction
Auction- govt. gets money, consumer pays
What is comingDefinitions and requirements
Industry (or speculators)
buy CO2 credits atauction
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Definitions
Carbon creditallocation vs. auction
Allocation- Industry is given carbon credits to sell and reinvest
What is comingDefinitions and requirements
Industry sells CO2credits on market
Industry is given CO2credits
Industry invests $$on CO2 reduction
technology
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Definitions
Cap andtrade
Maximum emissions (cap) set for facilities with reductions over time
Carbon credits granted (or auctioned) to company to be sold as commodity(trade). Seller uses money to invest in CO2 reduction technology
What is comingDefinitions and requirements
Carbon Trade Example :
Brand X receives 1,500,000 carbon credits can reduce CO2 by 30%.
The Market price is $30 per carbon credit when Brand X sells :
1,500,000 carbon credits X 30% reduction = 450,000 credits for sale
$30 per credit X 450,000 x 3 years = $40,500,000
$40.5 Million to invest in CO2 reduction technology
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Definitions
Leakageguarantees the export ofbusiness, an increase in global GHGemissions and a life threateningcompetitive disadvantagefor UScement industry
Leakage is a serious concern forthe cement industry!
If not properly legislated, leakage
could give foreign companies aclear competitive advantage
What is comingDefinitions and requirements
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Currently there are over twelve proposed bills in Congress
Most will be Cap and Trade type legislation, some with
auctioning of carbon credits, some with allocation, some a combo
Progressive GHG emission reductions from 2012 to 2050
Most will regulate 6 specific sectorsof our economy :Power Generation
Industry/Manufacturing
Transportation
Oil & gas
Forestry
Agriculture
What is comingDefinitions and requirements
Requirements - Legislation
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Legislation
What is comingDefinitions and requirements
Greenhouse Gas Reductions By Proposed Legislation
0
1000
2000
3000
4000
5000
6000
7000
8000
2005 2012 2020 2030 2040 2050
Year of Com pliance
MillionMetricTonsGHGp
eryear
Bingaman/Specter Lieberman/McCain Sanders/Boxer
Feinstein Kerry/Snowe
We are here
Law wants us here!
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What are your emissions ?
Sources of GHGs to be Counted :
Direct Emissions
Mobile combustion (heavy equipment, etc.), stationarycombustion
Non-combustion manufacturing, chemical processes,fugitive releases
Indirect EmissionsEnergy purchased/consumed : electricity, steam,heating/cooling
Other indirect emissions
Business travel, employee commute
Product use
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What are our options ?
More blended cementsType IP, slag blends, other additions
Carbon neutral fuels, renewable fuels (bio mass, bio fuels)
Energy efficiency measuresPyro-process and electrical efficiencies
Carbon dioxide capture and storage (CCS)complex process to capture CO2
from fuel process or stack and put it underground
Hybrid cement energy facilitiesutilization of waste heat
Use of non-cement binders (e.g. geopolymers), with lower specific CO2emissions
Last 3 items are expensive, not practical right nowshort-term measureswill have to be used while new technologies are being developed
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What are our options (contd.)?
Blended cements :
Limestone, Slags, Fly Ash, Silica Fume and other additives
Caution :
DOT / customer acceptance, Consistent product, Addedmetals, Color and quality variations
Carbon dioxide capture and storage (CCS) :
Goodbye CO2, Site considerations based on capability to sequesterCO2, Experience from enhanced oil recovery
Caution :
Co$$$$t to capture, CO2Hello again?, Who owns the rights?, Publicacceptance, Regulations and regulatory authority?
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What are our options (contd.)?
Carbon Neutral and Renewable Fuels: Bio-Fuelsare considered zero or lowCO2 emissionssince all of the carbon in bio-fuels came from the earthsatmosphere
Fuel crops, Bio mass, Wood wastes, Refuse derived fuels
Caution :
High moisture or low BTU content, Consistency of fuels,Special handling - low bulk density, Hurdles for feeding
and transport
Energy efficiency measures :
Plant upgradesconversions, Grinding and pyro-processing improvements, Technology/software tools,
Building and site energy measures
Caution :
Expen$e, Discard good equipment? Timing,Limitations - equipment and product demand,Regulatorypermit possible in reasonable time?
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Assembly Bill 32 (AB 32) - California Climate Change Regulation
Very Aggressive and Stand Alone
California producers are vulnerable to a competitive disadvantageif implemented before other states are under similar regulation
Preventing leakage difficult or impossible with international law
Goals :
Reduce GHG emissions to 1990 levels by 2020 (25% reduction)
80 % reduction below 1990 levels by 2050
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Magnitude of the Challenge For California
Current Trend Versus AB32 Targets
0
100
200
300
400
500
600
700
1990 2000 2004 2020 2050
1990 EmissionsBaseline
~ 173 MMton CO2EQ Reduction
80% reduction,~340 MMTCO2 EQ
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Sectors
Agriculture
Forests
Energy(Electricity/Natural Gas)
Water
California AB 32 - Sectors
Business/Industry
Cement
Semiconductor manufacturing
Oil and Gas/Refining
General Combustion
Sectors
Transportation
Land Use/VMT
Vehicles
Fuels
High GWP Gases
Recycling and WasteManagement
State Govt
Green buildings
State fleet
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2007 2008 2009 2010 2011 2012 2020
AB 32 Timeline
Publish listof earlyactions
Mandatoryreporting &
1990 Baseline
Adoptscoping
plan
Adopt
enforceableearly actionregulations
Early actionregulationsenforceable
Adopt GHGreductionmeasures
GHGreductionmeasures
enforceable
Reduce GHGemissions to1990 levels
Identification/implementation
of furtheremissionreductionstrategies
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CO2 Evaluation : Cement and Concrete
Both cement and concrete operations considered
Energy use
Fuel types and efficiencies
Transportation and material use
Product waste
End of life consideration
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Cement operations :
11 cement plants, cement 14 kilns in CA
3 in Northern CA, 8 in Southern CA
Over 1,700 employees
11.3 MMT Clinker, 11.6 MMT Cement
General Information : Concrete and Cement in California
Concrete Operations :
Over 400 - 500 established concrete batch plants in CA
Many more temporary batch plants
75% of cement distributed to concrete batch plants
25% distributed to other businesses
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Cement :
Convert to clean alternative fuels
Improve energy efficiency practices/technology in cement production
Use blending cements
Californias CO2 Reduction Strategy for Cement
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Concrete :
Reduce concrete waste
Use less cement
Universal GHG emission standard
Blend SCM at batch plants
CO2 Reduction Strategy for Concrete
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We have to be preparedDont wait for law, start now!
Get involved and provide input into regulations (PCA, etc.)
Know your emissions
Carbon Inventory, dont stop at the plant
How Will Climate Change Impact The Cement Industry?
Conclusion
Know your options for each facilityfind the best fit
Longrange planning starts now
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Potential Impacts of Climate Change on Our Industry
PCA MTC Steering Committee, May 2008
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