Mtc Climate

8/13/2019 Mtc Climate

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Potential Impacts of Climate Change on Cement Industry

PCA MTC Steering Committee, May 2008


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Among other things, we have to face the fact that whether we agree that acrisis of rapid climate change exists, the political drive is pushing this toreality 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

Climate Change Impact


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But first, where is it coming from? Sources of CO2 Emissions

Power Stations

Waste

Disposal

LandUse/BiomassCombustion

Residential,

Commercial,Other

Fossil fuel retrieval,

processing/distribution

Agriculturalbyproducts

20.6%

29.5%

19.2%

19.2%

12.9%

1%

1%

8.4%


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What about my house? Sources of CO2 Emissions

Waste

Vehicles51%

5%

26%

18%


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Definitions

Greenhouse gases (GHG) Not Just CO2 :

Carbon dioxide (CO2), Methane, Nitrous oxide (N2O, not NOx),hydrofluorocarbons, perfluorocarbons and Sulfur hexafluoride

Carbon CreditsTons of carbon emissions granted to each facility,

similar to a permitted emission limit except it decreases over time

What is comingDefinitions and requirements

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


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Definitions

Carbon credit allocation vs. auction

Auction- govt. gets money, consumer pays


Industry (or speculators)

buy CO2 credits atauction


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Definitions

Carbon creditallocation vs. auction

Allocation- Industry is given carbon credits to sell and reinvest


Industry sells CO2credits on market

Industry is given CO2credits

Industry invests $$on CO2 reduction

technology


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Definitions

Cap andtrade

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


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Definitions

Leakageguarantees the export ofbusiness, an increase in global GHGemissions and a life threateningcompetitive disadvantagefor UScement industry

Leakage is a serious concern forthe cement industry!

If not properly legislated, leakage

could give foreign companies aclear competitive advantage



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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 sectorsof our economy :Power Generation

Industry/Manufacturing

Transportation

Oil & gas

Forestry

Agriculture


Requirements - Legislation


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Legislation


Greenhouse Gas Reductions By Proposed Legislation

0

1000

2000

3000

4000

5000

6000

7000

8000

2005 2012 2020 2030 2040 2050

Year of Com pliance

MillionMetricTonsGHGp

eryear

Bingaman/Specter Lieberman/McCain Sanders/Boxer

Feinstein Kerry/Snowe

We are here

Law wants us here!


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What are your emissions ?

Sources of GHGs to be Counted :

Direct Emissions

Mobile combustion (heavy equipment, etc.), stationarycombustion

Non-combustion manufacturing, chemical processes,fugitive releases

Indirect EmissionsEnergy purchased/consumed : electricity, steam,heating/cooling

Other indirect emissions

Business travel, employee commute

Product use


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What are our options ?

More blended cementsType IP, slag blends, other additions

Carbon neutral fuels, renewable fuels (bio mass, bio fuels)

Energy efficiency measuresPyro-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 facilitiesutilization of waste heat

Use of non-cement binders (e.g. geopolymers), with lower specific CO2emissions

Last 3 items are expensive, not practical right nowshort-term measureswill have to be used while new technologies are being developed


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What are our options (contd.)?

Blended cements :

Limestone, Slags, Fly Ash, Silica Fume and other additives

Caution :

DOT / customer acceptance, Consistent product, Addedmetals, Color and quality variations

Carbon dioxide capture and storage (CCS) :

Goodbye CO2, Site considerations based on capability to sequesterCO2, Experience from enhanced oil recovery

Caution :

Co$$$$t to capture, CO2Hello again?, Who owns the rights?, Publicacceptance, Regulations and regulatory authority?


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What are our options (contd.)?

Carbon Neutral and Renewable Fuels: Bio-Fuelsare considered zero or lowCO2 emissionssince all of the carbon in bio-fuels came from the earthsatmosphere

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 upgradesconversions, Grinding and pyro-processing improvements, Technology/software tools,

Building and site energy measures

Caution :

Expen$e, Discard good equipment? Timing,Limitations - equipment and product demand,Regulatorypermit possible in reasonable time?


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Assembly Bill 32 (AB 32) - California Climate Change Regulation

Very Aggressive and Stand Alone

California producers are vulnerable to a competitive disadvantageif 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


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Magnitude of the Challenge For California

Current Trend Versus AB32 Targets

0

100

200

300

400

500

600

700

1990 2000 2004 2020 2050

1990 EmissionsBaseline

~ 173 MMton CO2EQ Reduction

80% reduction,~340 MMTCO2 EQ


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Sectors

Agriculture

Forests

Energy(Electricity/Natural Gas)

Water

California AB 32 - Sectors

Business/Industry

Cement

Semiconductor manufacturing

Oil and Gas/Refining

General Combustion

Sectors

Transportation

Land Use/VMT

Vehicles

Fuels

High GWP Gases

Recycling and WasteManagement

State Govt

Green buildings

State fleet


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2007 2008 2009 2010 2011 2012 2020

AB 32 Timeline

Publish listof earlyactions

Mandatoryreporting &

1990 Baseline

Adoptscoping

plan

Adopt

enforceableearly actionregulations

Early actionregulationsenforceable

Adopt GHGreductionmeasures

GHGreductionmeasures

enforceable

Reduce GHGemissions to1990 levels

Identification/implementation

of furtheremissionreductionstrategies


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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


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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

General Information : Concrete and Cement in California

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


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Cement :

Convert to clean alternative fuels

Improve energy efficiency practices/technology in cement production

Use blending cements

Californias CO2 Reduction Strategy for Cement


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Concrete :

Reduce concrete waste

Use less cement

Universal GHG emission standard

Blend SCM at batch plants

CO2 Reduction Strategy for Concrete


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We have to be preparedDont wait for law, start now!

Get involved and provide input into regulations (PCA, etc.)

Know your emissions

Carbon Inventory, dont stop at the plant

How Will Climate Change Impact The Cement Industry?

Conclusion

Know your options for each facilityfind the best fit

Longrange planning starts now


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Potential Impacts of Climate Change on Our Industry

PCA MTC Steering Committee, May 2008

Mtc Climate

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