Cement Industry Decarbonisation Pathways to Meet Paris Agreement Emission Targets

Cement is one of the largest consumed products globally, as it is a key component of concrete, used in every structure. The cement industry is also one of the largest emitters of carbon, accounting for 6-8% of the global total. Decarbonisation in the cement industry is particularly challenging since a major portion of emissions arises from unavoidable calcination chemical processes, which may not have a cleaner, commercially scalable alternative for years. Given the importance of infrastructure-related projects in economic development, cement demand and its significance are expected to grow globally. The industry, thus, needs to embark on a decarbonisation journey in line with the Paris Agreement, which aims to curb global temperatures well below 2ºC of the pre-industrial temperature.

Cement production generates the highest emissions per dollar of revenue (see the figure below), significantly above the levels of related industries, such as chemicals (1/23), mining, oil and gas, and iron and steel (c.1/5). Cement acts as a binder in the formation of concrete, keeping aggregates, which are fine and coarse rocks, glued together. Although it constitutes a small portion of the concrete mix (c.12% by volume), it is the single largest source of the resulting CO2 emissions.

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Similar to other carbon-heavy industries, several pathways can be adopted by cement manufacturers to reduce their carbon footprint. McKinsey has shown that the industry’s carbon emissions could be reduced by 75% by 2050 as compared to 2017 if optimum pathways are pursued. Technology innovation (such as the successful commercialisation

of carbon capture and storage technology alteration) is expected to account for the major portion of this emission reduction. Operational excellence is also expected to play an important role; however, it will have a limited impact on emission volumes and will primarily support technological innovation.

Four broad pathways – clinker substitution, alternate fuels, new technologies, and alternate building materials – are expected to form the pillars of the energy transition for the cement industry. Almost all the initiatives being developed, implemented, or envisioned fall under one of these decarbonisation pillars:

Clinker substitution: Clinker is the key constituent in cement, and clinker amount as a proportion to volume is directly proportional to CO2 emissions in cement manufacturing. Clinker proportion can be reduced by increasing the share of alternate materials, such as slag, fly ash, and pozzolans.

Alternate fuels: Fossil fuels account for the majority of energy needs of the cement sector. New energy sources, such as bioenergy and biomass-based wastes, make up an almost negligible share. This offers a significant growth opportunity for cleaner energy sources, such as renewables and waste-based fuels, to meet the energy demands of the burgeoning cement industry.

New technologies: Technologies currently in the pilot phase or implemented on a small scale, such as carbon capture and storage, have the potential to significantly lower carbon emissions. Hence, companies must continue to invest in lucrative opportunities that can offer long-term upsides, in terms of both carbon footprint and monetisation of carbon emissions reduced.

Alternate building materials: The development of wood- or polymer-based building materials with low carbon footprint could be potential substitutes for cement.

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Operational advancements and energy-efficiency measures, have already been implemented and have little scope for improvement. Since emissions-reduction from alternative fuels and clinker substitution depends on adequate availability of high-quality input materials, new technology adoption and alternative building materials development will be pivotal in achieving the industry’s carbon-reduction targets by 2050.

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