FLSmidth Opinion - 13/October/2021

The revised EU ETS can accelerate the decarbonisation of cement

Facing the prospect of huge bills for emissions allowances by 2030, cement companies must act now to accelerate the decarbonisation of the industry, says Fleming Voetmann at FLSmidth

The views expressed are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy

The cement industry is stepping up to the challenge of providing clean products, additional regulatory support will help real-world adoption

Under its 2030 Climate Target Plan, the European Union (EU) has agreed to accelerate the pace at which the bloc reduces its greenhouse gas emissions.

The new target commits member states to lowering their emissions by at least 55% below 1990 levels by 2030. It is a substantial increase on the previous target of at least 40% and will require the bloc to cut its emissions by more in the next nine years than it has in the previous three decades.

To achieve this ambitious new goal, the European Commission announced the Fit-for-55 package of legislation in July of this year. Its 12 proposals—eight amendments to existing legislation and four new laws—outline the main measures the EU will implement to cut emissions and all sectors are concerned.

Key to meeting the 55% goal is a reform of the EU Emissions Trading System (ETS). The proposed reform includes measures to both reduce the overall availability of emissions allowances and to progressively phase out the free allowances that have been provided to large industrial facilities, including cement plants. According to analysts, these measures could raise the price of emissions allowances to €90 per tonne of CO2 by 2030.

This is a drastic change to the EU cement industry, which is used to receiving CO2 allowances for free but by the end of the decade, it will have to pay for at least half of them. We estimated this could cost €4.7 billion in 2030.

Over the five years between 2026—when the phase-out of free allowances is scheduled to begin—and 2030, the cumulative impact could total €13 billion. This is significant.

Non-EU cement producers that import to the EU will also be hit by the proposals through the implementation of a Carbon Border Adjustment Mechanism (CBAM). This aims to maintain a level playing field between EU and non-EU producers by placing an equivalent carbon price on imports.



Overall, the cement industry should embrace these suggestions as they are providing clear impetus for the sector to meet its climate change obligations. There is now a clear financial imperative—on top of the existing environmental imperative—to decarbonise cement.

This is not about draining the cement industry of money. This is about creating an incentive for producers to invest today in low-carbon technologies. The way forward for the industry is clear; a massive green transition of its own is needed.

The winners will be those that act now to reduce emissions and get prepared to deliver the cement needed with the smallest possible environmental footprint.



The good news is that many of the solutions are already here. At FLSmidth, we want to deliver the technology needed to enable zero CO2 emission cement production by 2030.

We are not alone. We are joined by many other technology providers with equally strong sustainability pledges and ambitions. The engineering and innovative processes are at full speed and new partnerships have formed to support the needed green transition of the industry.

These include a variety of initiatives such as carbon capture, alternative fuels and supplementary cementitious materials (such as calcined clay) as well as advanced digital solutions that optimise the energy and process efficiency.

The industry is also taking the challenge seriously with several innovative low-carbon types of cement and carbon-neutral concrete now on the market from major cement companies.

The European cement association, CEMBUREAU, is also aligned with EU goals, releasing its Carbon Neutrality Roadmap last year that sets out the ambition to achieve net-zero emissions from the cement and concrete value chain by 2050.



It is one thing for the industry to provide green cement. We also need to get it out and onto construction sites—to create a market demand for it or the needle will not budge. Producing “green” cement is not massively more expensive than the traditional process—and the cost of cement in a construction project is often marginal.

But it involves different processes and investments in new equipment that cement producers would not otherwise need to replace or acquire. They will need a return-on-investment on this equipment.

Carbon capture technology, an essential part of getting to zero emissions, is not a current process at many sites and therefore an added cost. On the other hand, electrification, clay calcination and alternative fuel costs will eventually reduce the cost of production.

The construction industry is relatively conservative and the introduction of new construction material is very slow—too slow for the challenges we are facing in terms of reducing emissions.

Here green public procurement, in particular, can play a catalytic role and serve as a driver when it comes to demand for low-carbon cement. One of the biggest purchasers of cement is public bodies.

By having green public procurement policies, you can quickly create a market for low-carbon cement. Public procurement guidelines should specify the use of construction materials with the lowest available environmental footprint and cement is a good place to start.

Construction regulations should also be updated to reflect new and more environmentally friendly alternatives—this is work that needs to be accelerated. It is a point that takes on particular relevance now, as any increase in European cement demand is expected to be driven by public infrastructure spending sparked by pandemic recovery programmes.

Hurdles doubtless remain. Building standards and regulations must keep pace with innovations in low-carbon building materials. New technologies are needed, not least in the area of carbon capture, utilisation and storage. It appears, however, that the Fit-for-55 package gives clear direction and should accelerate action. •

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