UNSUSTAINABLE: Concrete and Cement

Photo by Evan Demicoli on Unsplash
Source: Portland Cement Association (n.d.)
  • When heated to very hot temperatures, limestone — a mix of calcium, carbon, and oxygen — decomposes and releases CO2. These “process emissions” are simply part of the chemical reaction of using limestone to make cement and make up >50% of cement’s overall CO2 footprint.
  • For the kiln to reach such high temperatures, the process is typically powered by fossil fuels, which make up ~40% of cement’s overall CO2 footprint.
  • The remaining <10% of cement’s CO2 footprint comes from other sources such as transportation, grinding, mixing, etc.
Source: BBC (2018)
Source: McKinsey (2019)
Source: Adapted and modified from Chatham House (2018)
Source: IEA (2018)
  • Competition. The cement industry is commoditized and suffers from overcapacity (capacity utilisation globally is <75%). As a result, the market is highly competitive. Costs — including those for decarbonisation innovations — are difficult to pass along.
  • Cost. Even with product differentiation, low carbon cement will still need to be cost competitive. Although sustainability is becoming a growing corporate and societal concern, most businesses are still driven by cost.
  • Capex. Cement is a capex intensive industry. To build an average sized cement plant requires hundreds of millions of dollars. In this context, many solutions are likely to be capex heavy.
  • Regulation. Industry standards and building regulations will need to be revised for novel cements to see widespread adoption. As noted by Chatham House (2018), “Almost all standards, design codes and protocols for testing cement binders and concrete are based on the use of Portland cement.” For example, geopolymer cements are not permitted under building regulations in some countries because of a lack of supporting standards (EC, 2021). However, some regulatory support is emerging, with Sweden, Denmark, France, Finland and the Netherlands having introduced regulation on embodied carbon (see here).
  • Existing infrastructure. The typical lifetime for a cement kiln is 40 years, while the average age of installed cement kilns globally is ~15 years (see below). With relatively young cement kilns globally, the most scalable solutions will either (1) be compatible with existing infrastructure and/or (2) offer significant cost savings relative to existing methods.
Source: IEA (2020)
Source: Logos from company websites



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2150 - Constructive Capital

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