EU cement makers begin biodiversity push with eye on Green Deal

European cement makers are stepping up efforts to comply with the aims of the EU's Green Deal, unveiling an industry-wide strategy on 30 May to protect biodiversity and ecosystems that slow the impacts of climate change.

Released by Cembureau, the 2030 Biodiversity Roadmap seeks to limit the impact of limestone quarries on the environment as well as bolstering work to shore up ecosystems that mitigate climate change-fueled devastation.

Limestone quarries provide raw materials for the production of cement. There are 400 such quarries around Europe, Cembureau data show. Quarry rehabilitation can aid ecosystem restoration and enhance biodiversity, according to the pan-European cement industry trade association.

Climate change is one of the main drivers of biodiversity loss, but destruction of ecosystems undermines nature's ability to regulate GHG emissions and protect against extreme weather, accelerating climate change, and increasing vulnerability to it, according to the European Commission (EC).

As a result, halting and reversing the loss of biodiversity and ecosystem services is now a top priority for the EU, next to climate action, the EC said. The bloc's response includes the Biodiversity strategy for 2030 released in 2020. That strategy forms a core part of the Green Deal, which seeks to make Europe the first climate neutral continent by 2050.

The EC sees restoration of coastal ecosystems such as dunes or wetlands as a means to addressing the challenges of rising sea levels, but with a much lower carbon footprint than building concrete breakwater blocks.

Cembureau's roadmap lays out a focus for the industry on rehabilitation of quarries, reversal of the decline of pollinators, reduction of alien plant species, and increased protection of protected species. It sets out targets and demands annual reporting on key performance indicators.

Following the release of the roadmap, Koen Coppenholle, Cembureau Chief Executive, said: "The European cement industry is committed to achieving the goals set in the EU Green Deal. In addition to climate change, one of the key priorities of our industry is to protect and preserve the rich ecosystems thriving in and around our quarries and make a strong contribution to biodiversity across the EU."

Hard to abate

EU cement production is covered by the EU Emissions Trading System (ETS). Traditional cement making using clinker produces significant levels of process emissions and requires a lot of heat. But between 1990 and 2020, European cement makers' emissions fell 15% due to energy efficiency gains, according to Cembureau.

Typically seen as a sector with hard-to-abate emissions, cement makers must extend the reductions. In addition, free ETS allowances for the sector are being phased out under the Green New Deal and July 2021's Fit for 55 set of proposals.

The Fit for 55 package also includes a carbon border adjustment mechanism for the cement industry, among others, that found Council of the EU backing in March to prevent carbon leakage.

FLSmidth Vice President Fleming Voetmann expects the EU cement industry will have to pay for half its emissions by 2030, which could cost at least €4.7 billion ($5.04 billion) based on an ETS price of €90/mt of CO2. Between 2026—when the phasing out of free emissions begins—and 2030, the overall cost to the EU cement industry could total €13 billion, said Voetmann, who heads the Danish engineering company's marketing, communications, and sustainability team.

Cembureau released a carbon neutrality roadmap in 2020 to lay out a path for tackling these expected changes. These include a pan-European CO2 transportation and storage network to facilitate the carbon capture and storage (CCS) needed for 42% of the cement industry's required emissions cuts.

Also, the trade association said it would need increased use of non-recyclable and biomass waste by power generators that generate the heat required for clinker production. The replacement of fossil fuels by these alternative fuels could contribute 15% of the emissions cut cement makers need in a carbon neutral world, it added.

A further 13% of the emissions reductions would arrive as a result of low carbon cement products, according to the roadmap. Holcim, the world's largest cement maker, isn't waiting for low-carbon product demand to arrive though, Vice President of Environment, Land, and Government Affairs Michael LeMonds said. It is forcing customers to choose whether to use its lower-carbon products or to go to a competitor, he added.

In 2020, the demand for Holcim's lower-carbon products was 100,000 mt, which will have risen to 12 million mt in 2022, LeMonds told the Climate Leadership Conference 25 May. From 2023, the company's customers won't have a choice—all of its products will be low carbon. Switzerland-headquartered Holcim's message to customers, he said, was "get on board or get out of the way."

By 2030, Cembureau sees cement production emissions falling by 30%, it said in the climate neutrality plan. But most of the green technologies needed by the cement sector under the ETS in 2030 would only be viable if the carbon price stays well above €90/mt, S&P Global Commodity Insights analysts say. A carbon price of up to €131/mt will be necessary for some technologies, such as the CCS, that are likely needed for most emissions cuts from the cement sector, according to a 2021 report from German thinktank Agora Energiewende.

Not quick enough

Habits are not changing quickly enough on biodiversity though, said Helen O'Shea, director of the protected areas project at US environmental group Natural Resources Defense Council. Speaking at the Politico Sustainability Summit 18 May, O'Shea said corporations are not under the same pressure to deal with biodiversity as they are to reduce their GHG emissions.

However, a global pact at the second part of the COP15 UN Biodiversity Conference in Kunming, China, could be on the cards. The first part of the conference was held 11-15 October 2021. The much delayed second part is currently scheduled to start 1 October. O'Shea said an agreement in Kunming would be biodiversity's equivalent to the Paris Agreement for climate change.

Biodiversity is a growing area of focus for some European executives though. Swedish power giant Vattenfall touted its biodiversity credentials in May, noting it again came top of a rankings table formulated by environmental consulting company Ecogain. Vattenfall has a net-positive biodiversity aim by 2030.

Offshore wind power pioneer Ørsted teamed up with ARK Nature in May to test the potential of rewilding principles in an effort to restore ocean biodiversity. Rewilding refers to restoring an area to its uncultivated state.

An initial focus for their partnership is to restore shellfish reefs. Ørsted says it wants to deliver energy with a net-positive biodiversity impact from all new projects commissioned by 2030.

The top two companies in the Ecogain rankings were both power producers: Vattenfall and France's Engie. Ecogain reviewed 400 of the largest European companies for its rankings, the Swedish firm said, adding that it asked those surveyed 23 questions.

Some 38% of the companies surveyed have a goal regarding biodiversity, but only 14% of the companies have time-bound, measurable, and relevant goals that are also in line with science, Ecogain said, meaning they are on a path to restoring biodiversity by 2030.

Ecogain notes that Holcim has committed to achieving the baseline of the International Union for Conservation of Nature's Biodiversity Indicator and Reporting System in all the company's managed lands by 2024, and having a measurable positive impact on biodiversity by 2030. Holcim was awarded a bronze level rating by Ecogain. The EU's second biggest cement maker, Heidelbergcement, was awarded a silver rating.

Posted 01 June 2022 by Keiron Greenhalgh, Senior Editor

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.