Cement is a key component of concrete, the world’s second most
consumed material, and it is widely used in modern infrastructure.
Cement production is also one of the largest single CO2
emitting industries, making it subject to increasing environmental
pressure as more net-zero pledges are announced.
About half of the CO2 emissions in cement production
are due to the inevitable chemical process of calcination while the
remaining comes from the energy-intensive heat needed for the
process. A recent report by Clean Energy Technology at IHS Markit
benchmarked multiple decarbonization pathways currently available
for the cement industry. Results show that, from all available
options, CCUS is by far the solution with the highest mitigation
potential since this technology significantly and directly reduces
CO2 from the calcination process.
However, adding CCUS to cement production currently more than
doubles the cost of cement; hence, a wide range of capture
technologies, with different degrees of technology readiness, are
being tested globally with the objective to reduce capture cost.
Currently, multiple CO2 capture technologies are planned
to start operations in large-scale projects, including the
relatively developed post-combustion amine scrubbing, oxy-fuel
combustion, and other emerging CCUS options, such as cryogenic,
solid sorbent, membranes. Despite the cost reduction the new
technologies could bring, policy support will still be required to
incentivize these projects. Thus, there is no surprise to see that
regions with defined policy support like Europe are leading the
pipeline of CCUS projects in the cement industry globally.
Europe emerges as a leader for first CCUS projects in
the cement industry
The CCUS pipeline of projects for the cement industry is mainly
a story of European cement manufacturers. Europe not only accounts
for 56% of the CCUS projects in the cement industry, but also two
European players – LafargeHolcim and Heidelberg cement –
are leading 73% of the CCUS projects for the industry
These companies are leading efforts to decarbonize the industry,
anticipating the critical role that CCUS can play in the industry,
and the potential costs associated with untackled emissions that
could lie ahead if they don’t decarbonize their operations. In
fact, the European emissions trading system (EU-ETS) will start the
phase-out of free allowances in 2026 through 2030, which will
represent a significant cost for cement manufacturers going
forward. However, if decarbonization solutions are in place,
producers could significantly reduce the emission cost of their
An analysis from IHS Markit shows that the investment in capture
technologies such as oxy-fuel combustion, calcium looping and amine
scrubbing in Europe could offset the emission costs from EU-ETS
beyond 2035, which could be a significant incentive for cement
manufacturers to implement decarbonization technologies such as
CCUS in their operations.
There is no doubt that policy support is needed to decarbonize
the cement industry, and although Europe seems to be moving in the
right direction, the region only accounts for 4% of the global
cement production. If we want to see a significant change, mainland
China – the main cement producer globally with more than 50% of the
global cement production- will have to put the right policy in
place to accelerate the decarbonization of the Chinese cement
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This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.