The Cement Industry, EUETS and SRF

Iain Walpole Hanson UK 21 February 2017

Hanson UK Part of HeidelbergCement GroupNumber 1 in aggregates, number 2 in cement,and number 3 in ready-mixed concrete

HeidelbergCementItalcementiHeidelbergCement and Italcementi

HeidelbergCement Group in figures

63,000 employees Core business

– Aggregates– Cement– Downstream activities: ready-mixed concrete and asphalt

3,030 locations in around 60 countries (incl. joint ventures)– 620 production sites for sand, gravel, and crushed rock– 161 cement and grinding plants – 1,740 ready-mixed concrete plants– 114 asphalt plants

Cement capacity 197 million tonnes (incl. joint ventures) Aggregates reserves 19 billion tonnes

Carbon Policy Landscape EU Emission trading scheme revision currently going through EU

Parliament for 2021 to 2030 COP21 Paris agreement sets same targets Brexit - Current UK policy has all the same objectives as EU UK climate Change Act Objective to reduce emissions by 80% from 1990 to 2050 CCC 5th carbon budget 2028 -2032, 57% CO2 reduction from 1990

Brexit and carbon policy – some of the options

Stay in EUETS phase 4 UK only emission trading scheme UK emission trading scheme linked to other schemes Climate Change Agreements Regulation – Through UK successor to IED Something else

Carbon Pressures on cement making

EUETS phase 4 Directive still being negotiated between EU institutions Reduced free allocation is inevitable Cost of carbon is expected to increase

Cement production has high process emissions from our raw materials which cannot be reduced without breakthrough technology such as carbon capture and storage(CCS)

CCS unlikely to be available before 2035 Carbon Leakage - cost of carbon cannot be passed on to customers

as domestic production will be replaced by imports

A 10% reduction target is equivalent to a 33% reduction requirement

Calcination (Process) CO2 = 64%

Combustion (Fuel) CO2 = 30%

Electricity (CO2 delivered basis) = 6%

Process emissions are irreducible.

A 10% reduction on direct emissions = 33% effort because emissions reduction is only possible on the 30% fuel element of the direct emission.

Future cost of carbon ETS – DECC forecast 2015

0

20

40

60

80

100

120

140

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

£/al

low

ance

high

Central

low

Opportunities to reduce carbon between 2020 and 2030

2050 carbon road map– Process technology – very limited– Novel cements - small improvements on small volumes– Further reduction in clinker content of cement - needs work on concrete

standards, market acceptability and long term product testing– Increased use of biomass fuels

SRF is part of the solution – The current SRF we are using cannot meet all our fuel requirements

SRF - For the next decade cement industry requirements Most SRF is currently used in the calciner this is more tolerant of

low fuel quality– Operating temperature 900°C– Consumes around 60% of kiln fuel

Most SRF is not currently suitable for use at the main burner – Flame temperature 2000°C– Consumes around 40% of kiln fuel

High Biomass content – reduced CO2 emissions High CV/ low moisture

– high moisture increases gas flow through the kiln process making the process less energy efficient and higher carbon emissions

How much SRF is needed?

SRF is in competition with other biomass and partial biomass fuels UK annual cement production is around 10,000,000 tonnes Typical Energy consumption is 3.5GJ/t clinker– about 1.5Mt fuel at

20GJ/t We need some “high quality” fuel to maintain the flame temperature

and burning conditions to produce a quality product High CV Small particle size High specific surface area

SRF for the next decade - Particle Size and composition

Typical SRF specification “flakes” no bigger than 50 mm in 2 dimensions

Specific surface area about 25 m2/kg Specific surface area of pulverised coal over 300 m2/kg Not all kilns can cope with Chlorides Can a lower Chloride SRF be produced?

All other controls same as today Metals, sulfur, halides and exclusions

Current SRF used in Cement Manufacture

CV

10 MJ/kg

30 MJ/kg

Moisture0% 30%

Biomass

20%

80%

20 MJ/kg

Typical SRFCV 15-19 MJ/kgMoisture 15-22%Biomass 15-50%

The SRF we want to use in Cement Manufacture

CV

10 MJ/kg

30 MJ/kg

Moisture

0% 30%

Biomass

20%

80%

20 MJ/kg

Future SpecificationCV 22-26MJ/kgMoisture <7%Biomass >50%

50%

15%

How do we get to what we need for the future?

CV

10 MJ/kg

30 MJ/kg

Moisture

0% 30%

Biomass

20%

80%

20 MJ/kg

Future SpecificationCV 22-26MJ/kgMoisture <7%Biomass >50%

50%

15%

How do we get to what we need for the future?

Processing SRF at the producers site? Change the economics? Change the waste input? Changing consumer behaviour, changes to door step collections? Incentivise collection of high quality raw materials? Does the technology/equipment exist?

Processing the SRF at the Cement Plant? Plenty of waste heat for drying Odour management, waste gas cleaning? Further size reduction?

Summary

Carbon policy will drive lower CO2 emissions from cement production To achieve carbon targets without CCS will require cement kiln fuels

to be almost 100% biomass SRF will remain a key source of energy for the cement industry To increase SRF use in cement kilns will require the production of a

high CV, high biomass, low moisture and small particle size SRF