Transcript Slide 1

Potential Impacts of Climate Change on Cement Industry
PCA MTC Steering Committee, May 2008
Climate Change Impact
Among other things, we have to face the fact that whether we agree that a
crisis of rapid climate change exists, the political drive is pushing this to
reality 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
But first, where is it coming from? Sources of CO2 Emissions
Agricultural
byproducts
1%
20.6%
19.2%
Fossil fuel retrieval,
processing/distribution
8.4%
29.5%
12.9%
19.2%
Residential,
Commercial,
Other
1%
Land
Use/Biomass
Combustion
Power Stations
Waste
Disposal
What about my house? Sources of CO2 Emissions
Waste
5%
18%
51%
26%
Vehicles
What is coming – Definitions and requirements
Definitions
•Greenhouse gases (GHG) Not Just CO2 :
•Carbon dioxide (CO2), Methane, Nitrous oxide (N2O, not NOx),
hydrofluorocarbons, perfluorocarbons and Sulfur hexafluoride
•Carbon Credits – Tons of carbon emissions “granted” to each facility,
similar to a permitted emission limit except it decreases over time
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
What is coming – Definitions and requirements
Definitions
•Carbon credit allocation vs. auction
•Auction - govt. gets money, consumer pays
Industry (or speculators)
buy CO2 credits at
auction
What is coming – Definitions and requirements
Definitions
•Carbon credit allocation vs. auction
•Allocation - Industry is given carbon credits to sell and reinvest
Industry is given CO2
credits
Industry sells CO2
credits on market
Industry invests $$
on CO2 reduction
technology
What is coming – Definitions and requirements
Definitions
•Cap and trade
•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
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
What is coming – Definitions and requirements
Definitions
•Leakage – guarantees the export of
business, an increase in global GHG
emissions and a life threatening
competitive disadvantage for US
cement industry
Leakage is a serious concern for
the cement industry!
If not properly legislated, leakage
could give foreign companies a
clear competitive advantage
What is coming – Definitions and requirements
Requirements - Legislation
•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 sectors of our economy :
•Power Generation
•Industry/Manufacturing
•Transportation
•Oil & gas
•Forestry
•Agriculture
What is coming – Definitions and requirements
Legislation
Greenhouse Gas Reductions By Proposed Legislation
Bingaman/Specter
Feinstein
Lieberman/McCain
Kerry/Snowe
Sanders/Boxer
8000
Million Metric Tons GHG per year
7000
6000
5000
4000
3000
2000
We are here
1000
Law wants us here!
0
2005
2012
2020
2030
Year of Com pliance
2040
2050
What are your emissions ?
•Sources of GHG’s to be Counted :
Direct Emissions
•Mobile combustion (heavy equipment, etc.), stationary
combustion
•Non-combustion manufacturing, chemical processes,
fugitive releases
Indirect Emissions
•Energy purchased/consumed : electricity, steam,
heating/cooling
Other indirect emissions
•Business travel, employee commute
•Product use
What are our options ?
•More blended cements – Type IP, slag blends, other additions
•Carbon neutral fuels, renewable fuels (bio mass, bio fuels)
•Energy efficiency measures – Pyro-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 facilities – utilization of waste heat
•Use of non-cement binders (e.g. geopolymers), with lower specific CO2
emissions
Last 3 items are expensive, not practical right now – short-term measures
will have to be used while new technologies are being developed
What are our options (contd.)?
Blended cements :
•
Limestone, Slags, Fly Ash, Silica Fume and other additives
Caution :
•
DOT / customer acceptance, Consistent product, Added
metals, Color and quality variations
Carbon dioxide capture and storage (CCS) :
•Goodbye CO2, Site considerations based on capability to sequester
CO2, Experience from enhanced oil recovery
Caution :
•Co$$$$t to capture, CO2 – Hello again?, Who owns the rights?, Public
acceptance, Regulations and regulatory authority?
What are our options (contd.)?
Carbon Neutral and Renewable Fuels : Bio-Fuels are considered zero or low
CO2 emissions since all of the carbon in bio-fuels came from the earth’s
atmosphere
•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 upgrades – conversions, Grinding and pyroprocessing improvements, Technology/software tools,
Building and site energy measures
Caution :
•Expen$e, Discard good equipment? Timing,
Limitations - equipment and product demand,
Regulatory – permit possible in reasonable time?
Assembly Bill 32 (AB 32) - California Climate Change Regulation
•
Very Aggressive and Stand Alone
•
California producers are vulnerable to a competitive disadvantage
if 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
Magnitude of the Challenge For California
Current Trend Versus AB32 Targets
700
600
1990 Emissions
Baseline
500
~ 173 MMton CO2
EQ Reduction
400
300
80% reduction,
~ 340 MMT
CO2 EQ
200
100
0
1990
2000
2004
2020
2050
California AB 32 - Sectors
Sectors
Sectors
•Agriculture
•Transportation
•Forests
•Land Use/VMT
•Business/Industry
•Vehicles
•Cement
•Fuels
•Semiconductor manufacturing
•High GWP Gases
•Oil and Gas/Refining
•Recycling and Waste
Management
•General Combustion
•Energy (Electricity/Natural Gas)
•Water
•State Gov’t
•Green buildings
•State fleet
AB 32 Timeline
2007
2008
Publish list
of early
actions
2009
2010
Adopt
scoping
plan
Mandatory
reporting &
1990 Baseline
2012
2020
Identification/
implementation
of further
emission
reduction
strategies
Adopt GHG
reduction
measures
Early action
regulations
enforceable
Adopt
enforceable
early action
regulations
2011
GHG
reduction
measures
enforceable
Reduce GHG
emissions to
1990 levels
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
General Information : Concrete and Cement in California
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
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
California’s CO2 Reduction Strategy for Cement
Cement :
• Convert to clean alternative fuels
• Improve energy efficiency practices/technology in cement production
• Use blending cements
CO2 Reduction Strategy for Concrete
Concrete :
• Reduce concrete waste
• Use less cement
• Universal GHG emission standard
• Blend SCM at batch plants
How Will Climate Change Impact The Cement Industry?
Conclusion
•We have to be prepared – Don’t wait for law, start now!
•Get involved and provide input into regulations (PCA, etc.)
•Know your emissions – Carbon Inventory, don’t stop at the plant
•Know your options for each facility
– find the best fit
•Long –range planning starts now
Potential Impacts of Climate Change on Our Industry
PCA MTC Steering Committee, May 2008