Increasing Sustainability in Cement Production and Construction Sector

LafargeHolcim: Endeavor to Transform Cement Manufacturing Business and Promote Sustainability in Construction Sector

Changing Landscape of Cement Industry in Light of Climate Change

The continued expansion of global economies leads to a rising demand for construction materials. Driven by increasing cement consumption, the global production of cement is projected to grow to over 5 billion tonnes worldwide by 2030[1]. This has a profound impact on the overall level of greenhouse gas emissions, as the production of each tonne of cement results in emissions of roughly 0. 9 tonnes of carbon dioxide (CO2).

Given the carbon-intensive nature of business, cement manufacturers are under the increasing pressure to modify their business strategies and production process to foster a long-term, sustainable environment. Governments around the world are making a concerted effort to encourage such change, as highlighted in the Paris Agreement on Climate Change in December 2015, in which 179 countries and the EU pledged to keep global temperature increase well below 2C by significantly reducing emission of greenhouse gases[2]. The scrutiny of public eyes on cement manufacturing process and strict government regulations on CO2 emissions globally will likely impact the overall direction of business planning and growth strategies of cement manufacturers.

l1

 

LafargeHolcim – Strong Advocate of Sustainability and Leader to Set New Standards  

LafargeHolcim, the largest cement manufacturer in the world, is an excellent example of a responsible player who embraces these principles and uses sustainability as a driver for differentiation and growth. The company has recently rolled out its Sustainability Strategy – the 2030 Plan – which defines the next required steps for the company to follow. Through this plan, the Company seeks to encourage the entire construction sector to play its part in addressing the issue of climate change and focus on shared value creation for the company, society, communities, and the environment[3].

Figure 1: Outline of the LafargeHolcim 2030 Plan

l3

Based on the above, LafargeHolcim has actively implemented changes in its business model to increase its operational efficiency and make the cement production process more sustainable. As a result, the company has become the most carbon-efficient cement company among international peers. For example, according to the company, its cements contains an average of 71% clinker, and net CO2 emissions per tonne of cement in 2015 were 573Kg/tonne, a reduction of 26% against the 1990 benchmark.

There are three major operational levers the company has pulled to achieve such outcome: replacement of clinker with alternative mineral components, increased use of waster-derived fuels, and investment in energy efficiency.

Production of clinker, a major ingredient needed to produce cement, accounts for the majority of emissions from cement, and therefore reducing the amount of clinker in blended cements can have a significant impact on CO2 emissions intensity[4]. LafargeHolcim, through its proprietary research and years of testing, successfully identified alternative mineral components and decreased clinker intensity by 15% since 1990. LafargeHolcim plans to utilize innovative clinker types and develop new low CO2 binders with a potential CO2 reduction of 30-70%.

The Company also increased its use of alternative fuels and decreased usage of coal and petcoke, two of the most carbon-intensive fuels. LafareHolcim currently uses socially responsible biomass from agricultural waste that does not compete with food production. While the Company has increased its use of biomass waste fuels more than six times over the past 25 years, it aims to double its current offer of waste treatment solutions in the medium term.

Furthermore, LafargeHolcim has invested in modification of its least energy-efficient production facilities to increase energy efficiency. By changing the plant design through careful planning and capital expenditure, the company improved thermal and electric efficiency, achieving 22% reduction of thermal consumption and decreasing both operating costs and greenhouse gas emissions.

 

How to Tackle Challenges Ahead

Despite LafargeHolcim’s success in increasing energy efficiency and making its production process more sustainable from emissions standpoint, the company is facing challenging circumstances as it approached the limits in many of the known improvement levers. While the company can strive to extract more improvement potential from the existing levers, it should also focus on finding new channels of improvement and start building an ecosystem that can guide the entire value chain in the direction towards sustainability and efficiency.

That said, the company, as part of its ongoing effort, has established the LafargeHolcim Foundation for Sustainable Construction, designed to promote collaboration across all fronts of the construction industry. The endeavor has brought various players together to provide pragmatic solutions and establish sustainable industry best practices. LafargeHolcim should continue to raise awareness of the climate change challenge and work with the whole value chain to maintain the positive momentum in the right direction. (Word count: 789)

[1] European Cement Association

[2] World Economic Forum (https://www.weforum.org/agenda/2016/09/what-is-the-paris-agreement-on-climate-change/)

[3] LafargeHolcim Sustainability Report 2015

[4] “How to Turn Around the Trend of Cement Related Emissions into the Developing World” – WWF International

Previous:

Your daily jolt: Global coffee production can’t keep up with demand

Next:

Are Coffee Beans in Hot Water? How Starbucks can mitigate the effects of a warming world

3 thoughts on “Increasing Sustainability in Cement Production and Construction Sector

  1. That LafargeHolcim would transition from coal to renewable energy sources such as biomass, and redesign its facilities to reduce thermal consumption, seems foreseeable given how energy-consuming cement production is and how much that process contributes to greenhouse gas emissions. I was surprised, though, to learn that the company has found ways to reduce the amount of clinker, a major raw material, required in manufacturing cement. I had assumed that cement production, having existed for so long, had run out of ways to innovate, but even in this industry there remain technological improvements to reduce the carbon output for the process.

    Seeing the company with the largest market share pursuing sustainable practices signals to the industry that addressing climate change is paramount, but I wonder how these operational changes affect the viability of the business. In particular, how does the use of alternative mineral components instead of clinker change the product? The new blended cement is greener, but can it provide the same level of mechanical support and resistance to erosion from harsh elements? To what extent do these changes compromise quality, and in turn, price? Perhaps these changes make the process more costly, and LafargeHolcim can some of absorb it by finding other cost savings — which they have done by making their facilities more energy efficient — but if the company has to pass on some of that cost to customers, then it may rethink how much of its operations it is willing to change.

  2. Very insightful article Ryan! I was curious to understand more ways that LafargeHolcim could reduce C02 emission. I found this article which talks about more ways to reduce C02 emission ( http://blogs.ei.columbia.edu/2012/05/09/emissions-from-the-cement-industry/ ). One way to reduce CO2, could be capturing and storing it (Carbon Capture and Storage – CCS). By passing CO2 through concrete, CO2 could be made to react with calcium hydroxide in a water medium to form calcium carbonate. Then it could be careful stored. With more advances in technology, there may be better ways to efficiently store C02.

  3. The cement industry is known for its damage of the environment so it is good to know that the industry is changing. I was curious to learn how is it changing on the developed countries and how has the lead player influenced the others in the market. The value chain in this industry is fairly complex and with misaligned incentives for making an change, the Paris Agreement was indeed a great step forward.
    I found the following channel to be quite insightful about the evolution of the industry globally: http://www.globalcement.com/

Leave a comment