MEXICO CITY, July 1 (Reuters) – Cemex, North America’s largest concrete producer, has pledged to cut carbon dioxide emissions by 40% by 2030 and eliminate them by 2050, ambitious targets reflecting increasing pressure on the industry from regulators and investors.

But significant challenges in technology, cost control, environmental regulations and building code compliance could slow the effort, underscoring the difficulty of cleaning up an industry that is among the largest emitters of greenhouse gases. greenhouse in the world, according to interviews with officials of Cemex, cement and concrete industrial groups and specialists in industrial emissions.

Cement, a key ingredient in concrete, contributes around 8% of global carbon dioxide (CO2) emissions, according to Chatham House, a London think tank. It’s much more than global aviation, according to data from the Air Transport Action Group, an industry group. The cement industry produces more CO2 than any country except the United States, China and India, according to the International Energy Agency. (See graphic.)

Industry emits carbon dioxide at every step of the manufacturing and supply chain, making it particularly difficult to reduce emissions. CO2 pollution begins with the extraction of limestone and continues with the chemical process used to turn it into cement, the energy for factories and kilns, and the fuels to ship it around the world for projects. ranging from patios to skyscrapers.

The challenges facing Cemex (CEMEXCPO.MX) are common to the entire industry, and other major cement and concrete manufacturers – including Breedon Group (BREE.L), Asia Cement (0743.HK) and UltraTech Cement (ULTC.NS) – have set similar targets for the production of “carbon neutral” concrete. However, Cemex might have a harder time than some companies, as building codes in the United States – one of its most important markets – do not allow many alternative cement ingredients that could reduce manufacturing emissions. .

Skeptics of the industry’s promises say companies rely heavily on carbon capture technology that has yet to be proven and is unprofitable. Moreover, they argue, companies cannot meet their climate goals without the cooperation of regulators, architects, builders and consumers, all enabling the shift to low-carbon processes and materials.

“We’re talking about really, really ambitious goals for what is arguably the hardest industrial sector to decarbonize,” said Gaurav Sant, professor of engineering at UCLA and director of its Institute for Carbon Management. “While waiting for major technological breakthroughs, this is not the case. Clear to me how they are going to be met.

Cemex’s commitment only applies to its concrete and not to its cement. But meeting concrete targets will necessarily imply significant emission reductions in the manufacture of cement, which produces the bulk of the industry’s CO2 emissions.

Cemex and other companies also plan to use compensation programs to achieve their goals. This involves separate investments in projects that reduce emissions – such as massive tree planting or solar farms – to offset the carbon produced by polluting industries. Cemex, however, said the compensation will only represent a small part of its planned reductions.

The central challenge facing the cement industry mirrors that faced by all polluters: reducing emissions without reducing profits. Cement sells so well, after all, because it’s relatively cheap. The growth of the sector also depends on demand from developing countries, where builders can hardly afford more expensive materials.

CEMEX has a new concrete, the Vertua brand, which is made with low emission products and processes which is sold mainly in Europe. But it costs up to 50% more, a premium that the company says may be justified by faster drying times that speed up construction.

Cemex says it can meet its climate goals by using renewable energy, carbon capture technology and alternative fuels in the kilns used to make cement. Davide Zampini, director of research and development at Cemex, said the company is “fairly confident” that it can meet or exceed its environmental goals “if we apply certain technologies correctly and really get a home run. “.

This confidence prompted the company in June to raise its emission reduction target by 2030 to 40% from 35%. Cemex said he plans to spend $ 60 million per year on this effort.

Cemex officials, however, recognize that success hinges on further development of carbon capture technology and favorable regulatory regimes in the countries where it operates to encourage recycling of waste, alternative fuels and greener cement ingredients. and concrete.

“We will actively advocate in our markets” for such regulatory changes, Cemex Managing Director Fernando González said in a virtual presentation in June.

MOUNTING PRESSURE

Governments and investors around the world are pressuring companies to reduce greenhouse gas emissions. Billionaire climate activist Bill Gates recently put the cement in the spotlight when he called it the area of ​​most concern in the effort to reduce greenhouse gas emissions.

Concrete is the world’s most popular synthetic building material. Cement makes up between 10 and 15% of the typical concrete mix, but produces a large part of its CO2 emissions.

Emissions begin with the extraction of raw materials such as limestone and crushing it to prepare for a process called calcination. This process – a huge source of CO2 – involves heating raw materials in massive furnaces, often fired with coal or natural gas, to temperatures up to 1450C (2642F). Heating produces marble-sized beads called clinker, which are then crushed and mixed with other ingredients to make cement.

Cemex officials said the company plans to cut emissions in part by using clinker substitutes that are by-products of other industrial processes, such as burnt shale oil or glass kiln slag.

It plans to eventually equip factories with carbon capture technology, which aims to capture emissions from industrial activity and store CO2 underground. Oil companies also use the captured carbon by injecting it into wells to release the oil.

Cement and concrete companies sometimes receive help from governments as well as pressure to reduce emissions. Cemex, for example, recently received $ 6.5 million in US federal grants to develop carbon capture technology.

Other times, governments put up obstacles to cleaning up the concrete industry. In Mexico, where Cemex is based, President Andes Manuel Lopez Obrador has other priorities. The administration encourages the use of oil and gas from the state oil company Pemex. The administration does not specifically oppose renewable energy, but its policies favor domestic companies over foreign companies, which has slowed the development of renewable energy.

This makes it unlikely that more renewable energy will be available or affordable for companies like Cemex under administration, said Vicente Saisó, the company’s director of sustainability.

“It is a very difficult situation that we are facing,” said Saisó.

Lopez Obrador’s office declined to comment.

RESTRICTIVE AMERICAN CONSTRUCTION CODES

Cemex officials said their climate-friendly concrete projects would also require major regulatory changes to building codes in the United States, which accounts for about 22% of its sales. Building standards and codes for some US projects can be “completely restrictive,” Saisó said.

The ingredients in American concrete are generally prescribed by local building codes and are based on Portland cement, a variety that has been common since the 19th century. Often they don’t adapt to the new low-carbon blends that companies, including Cemex, are developing, Saisó said.

Officials from the US-based Portland Cement Association (PCA) said they supported more climate-friendly products, but cited liability fears as a barrier for architects and engineers to adopt them. Industry experts say concrete products made from more environmentally friendly ingredients are able to provide the same strength and safety as those using Portland cement.

Cemex has an easier time producing and selling greener concrete products in Europe, where the taxation of energy and pollution under the EU’s new Green Deal encourages a shift to cleaner alternatives. The EU also has an emissions trading system that basically charges installations for the emission of specific amounts of carbon dioxide.

This kind of regulation has resulted in updates to Cemex’s European operations, including a more efficient furnace at its plant in Rudniki, Poland, resulting in a 16% drop in carbon dioxide emissions since 2018. The company’s A higher bar is also set in the region, targeting a 55% reduction in emissions by 2030.

“Good regulation that prompts us to both remain competitive in Europe and drive our carbon reductions is welcome,” said Andrew Spencer, vice president of corporate affairs, CEMEX Europe.

Reporting by Cassandra Garrison; edited by Frank Jack Daniel and Brian Thevenot

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