charting a carbon strategy in an age of populism · • trend for green building customers to...

Charting a Carbon Strategy in an age of Populism

Lafarge CanadaRob Cumming

© 2018 – Figures as of December 31, 2017


About cement and concrete

Cement is• A very fine, dry powder• Manufactured and shipped globally• Sold in bulk or bags• 7% - 11% of a concrete mix• The glue that holds concrete together

Concrete is• Created by mixing cement, aggregate (sand & gravel), water• Produced locally, mixed and hauled over short distances• The 2nd most used construction product on the planet, after water

Aggregate is • generally consisting of crushed stone, gravel, and sand, are

mainly used in the construction of roads, rail track beds, the manufacturing of concrete, concrete products, and asphalt.

Environmental Science & Chemistry Building University of Toronto

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Five megatrends driving our market

Global population growth

Urbanization and megacities

Increased demand for better living standards

Digitalization Increased demand for sustainable construction solutions

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The sixth megatrend is action on climate change – carbon pricing, resilience


Charting a Carbon Strategy – Threats & Opportunities• Why should corporations care?• Climate change is real and is from human activity

• 12 years to make changes

• The political tide is changing in multiple ways

• Opportunity to reinvent business to a low carbon economy model

• Age of populism• We are now negotiating our 7th and 8th Carbon Pricing

system – with only 5 plants in Canada

• Carbon prices are evolving as are the benchmarks

• $ millions in value can be wiped out at the stroke of a pen

• Investment decisions are made off shore and competition for capital is extreme

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Climate Policy and Cement & Concrete – the Duality

• Cement represents 5% of the world’s CO2 emissions• This is primarily due to high volumes of sales• More concrete sold than all other building materials combined

• Industry is a leader in responding to the challenge

• Rapid deployment of solutions possible

•Our customer’s customer’s emissions can be reduced• Near net zero homes, heated concrete floors, thermal mass

• Goal of 10 million tonnes of carbon savings per year

Did you know? Lafarge Canada (East) is on track to reduce our CO2 emissions by 40% this year over 1990 emissions per tonne of cement products.


Climate Change - Resilience

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Building Material Sector – Carbon Intensity

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Threefold “No Regrets” Carbon Strategy1. Take actions now that lower costs• Brainstorm solutions

• Price out capital, operating costs, savings

• Determine total GHG savings

• Apply any carbon pricing applicable (optional)

2. Identify sustainable products for customers• Provide environmental data to support claims

• Trend for green building customers to factor embodied carbon into purchases

• Advocate for government procurement policy support

3. Monitor state of R&D, Carbon Pricing, and Provide Leadership• Do pilots with partners, support research

• Partner with governments of all stripes to achieve a lower carbon economy8


Cement & Concrete Industry Solutions

Category Examples

Concretewithlesscement SCMs, CarbonCure,HighStrengthConcrete

Cementwithlessclinker Contempra

Clinkerwithlessenergy EnergyEfficiency

Non-fossilenergy Lowcarbonfuels

ClinkerMfg Solidia, RecycledRM

Carboncapture&use Algae,Solidia, Carbon Cure

IndirectPeakmanagement,efficiency,

timeofuse,HybridReadyMixTrucks

From a cement perspective


Final Thoughts for Carbon Pricing Policy

• Complementary policies are needed• Procurement: Buy low carbon products

• Expedite technical and quality standards

• Reward action• More carrot than stick for energy intensive, trade exposed sectors

• System Design• Recognize early action (ensure no regrets)

• Provide certainty, common & predictable benchmarks

• Encourage R&D in the pricing systems• Robust and flexible offset program

• Price in GHG savings for renewable electricity

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