Published on April 23rd, 2018 | by Nicolas Zart0
US Cement Companies Still Lag Far Behind The Paris Climate Goal, Endangering Public Health & Safety
April 23rd, 2018 by Nicolas Zart
A silent, under-reported, highly polluting industry is that of cement factories all over the world. Wherever they are, pollution spikes happen, belching out noxious particulates ill-affecting the health of those who live near their path.
Cement Factories Pollute With Little Public Awareness
I’ve lived in two cities with major cement factories. Both cities suffer the same pollution-associated problems. For instance, Long Beach, California, has children in kindergartens sitting next to the busy 710 highway where trucks pick up cement from the Los Angeles and Long Beach harbor, the second busiest in the nation. The local news has revealed that children’s lung capacity will never fully develop due to dirty particulates from the road. And if you think about it, harbors are places where road vehicles, sea vessels, and trains collide into a cauldron of polluting emissions. These children will live with asthma for the rest of their lives. An exceptionally cruel thing to put on children. Adding a slap to injury, the locals refused a $5 surcharge per container to help those children because it would raise the price of goods. The population was yet again manipulated through advertising and lobbyist campaigns, becoming a population that favors its goods over its children.
The cement industry constantly slips through the nets of the law and enjoys a relatively unscrutinized life away from public attention. Bringing it up to emission standards might not solve everything, but doing so is crucial right now.
Making Cement Pollutes A Ton, And Nothing Much Has Been Done About It
According to a new report from the CDP entitled Building Pressure, an analysis of 13 of the world’s largest publicly listed cement companies show they would need to more than double their emissions reductions in order to align with the global 2°C warming limit. A few companies declined to be included, such as Anhui Conch, Siam Cement, Dangote Cement, and China National Building Materials.
Anything that encourages investors to raise this lack of transparency problem with cement company management is welcome. With all countries having signed the Paris Climate Agreement (and only the US talking about leaving it), this industry is forced to evolve. The US cement companies covered in the report total a market capitalization of $150 billion and represent 16% of global cement production. Overall, the cement sector accounts for 6% of global CO2 emissions.
If you’re not alarmed enough yet, consider these few points:
- Cement is the second most polluting industrial sector. It is used in concrete, it is the second most consumed product in the world after water, and the building industry uses concrete extensively, which accounts for over a third of global emissions.
- Heavy-handed lobbies slow down the light regulations of the sector giving industries carte blanche to dictate their bottom line profits over any other concerns.
- Thankfully, a new trend towards low carbon cities and tightening building regulations is starting to put more pressure on the cement industry.
- Embarrassingly enough for the US, the rest of the world seems to take pollution seriously. For instance, some top Indian companies are reducing their carbon footprint during the cement-making process around the globe with better access to alternative materials.
The trick now is to build newer and more efficient cement plants, something India does well while Europe and the US still lag and rely on older cement plants.
According to Paul Simpson, CEO of CDP, “Cement is a heavy and largely invisible polluter, yet taken for granted as a necessary building block of basic civilization. With potential 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 in order to avoid impending risks to their operations and the wider world. This may seem challenging at first, but every year it is delayed, the cost becomes greater, so management teams, regulators, and investors need to think long-term. There is a solution — cement companies just need to invest properly in finding it.”
Cement companies must reduce costs by making their cement plants more energy efficient. They need to secure a future green position to become global leaders in the low-carbon products. But practically all cement companies share the same tendency of not self-regulating well, inviting government interventions. Laws are created and the maddening cycle continues again. In the end, these companies force governments to develop these markets through regulation and incentives.
Don’t Pass Gas, Capture It!
European players have started using alternative fuel sources, such as organized waste collection for cement production. But the most worrisome aspect of that industry, at least according to the research, is that 5 companies do not use an internal carbon pricing scheme, potentially risking problems in a sector where carbon pricing legislation has a material impact. The EU has its Emissions Trading Scheme (ETS), but lobbying has undermined evolution in the sector. By not incentivizing long-term climate risk management, they drop further behind the future clean race, which will cost a lot of money tomorrow to rectify.
Carbon Capture and Storage (CCS) systems have great potential but have so far been left at the pilot levels and come at too high a cost for broad commercial application. The CDP report assesses the included companies across 4 key areas aligned with the recommendations from Mark Carney’s Task Force on Climate-related Financial Disclosures (TCFD). By making such recommendations public, hopefully investors will demand that cement companies disclose how they are adjusting their business models to meet the challenges of climate change.
Finally, Marco Kisic, Senior Analyst at CDP added, “Cement companies have made some progress towards reducing their emissions, but they need to do a huge amount more. It is clearly a complicated story because of our global reliance on cement, and the inherent emissions of the sector, but there are things that can be done. 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.”
Another White Elephant We Must Deal With
We all know the white elephant in the room, and in the energy and transportation sectors, there sit many white elephants surrounded with 800 lb gorillas, each vying for the biggest piece of the pie and making no qualms lobbying for better results.