Decarbonising cement and concrete used in the built environment is vital to reducing global greenhouse-gas emissions.
Reaching net-zero emissions by 2050 will require the rapid decarbonisation of the cement and concrete industry. Although many companies in the industry have committed to decarbonisation, no individual organisation can achieve this goal without buy-in from across the ecosystem, according to a new report from McKinsey.
The built environment accounts for approximately 40 per cent of global CO2 emissions from fuel combustion and 25 percent of global greenhouse-gas emissions. As a part of these totals, cement production is one of the highest-emitting industries, accounting for seven per cent of global CO2 emissions.
Given its major emissions, cement manufacturing is a vital area of interest for decarbonisation efforts. Beyond the environmental costs of CO2 emissions, monetary costs are increasing because of carbon-pricing systems, which could reach up to €180 billion globally by 2050. Cement remains the number-one building material: four billion metric tons, as much as 50,000 fully loaded airplanes, are produced annually.
To meet growing demand for sustainably produced materials, cement and concrete manufacturers can decarbonise the value chain by reducing the amount of clinker in cement. Clinker accounts for approximately 90 per cent of the emissions released in cement production, Cement producers can consider substituting clinker with alternative materials such as fly ash, metal slag, or calcined clay. They can also reduce the amount of clinker needed through innovations in construction, design and material mixes and by developing low-binder cements and reusable concrete modules.
Reducing the CO2 from energy used in the production process. To reduce energy-related emissions, players are exploring alternative fuels and newer technologies such as kiln electrification. In addition, cement and concrete producers are developing proprietary waste-recycling businesses that target the use of industrial and municipal waste in their kilns.
Storing or utilising remaining CO2 emissions. One major topic of interest for all stakeholders, including manufacturers of cement and concrete, building-materials offtakers and investors, is the storage and reuse of CO2. For instance, CO2 can be stored in concrete aggregates when construction and demolition waste is recycled. Investors have highlighted their specific appetite for businesses that aim to capture and utilise industrial carbon emissions.
Circularity is key to decarbonisation as recycled cement and concrete materials can be utilised in new buildings and construction, either as reusable modules or as materials that can be broken down and incorporated into new building materials.
Although most of these technologies are relatively new and have not yet been deployed at scale, the interest and action of players in this field is growing. It is estimated that roughly 2.6 billion metric tons of CO2 emissions could be avoided or mitigated by applying circular solutions for cement and concrete by 2050. These economic and CO2 savings could potentially contribute up to €110 billion in EBITDA annually to the built environment by 2050.
The incentives for the industry to move toward circularity are strong, but stakeholders will need to navigate several challenges. For instance, circular solutions require the industry to adapt and build new supply chains and technologies. And achieving circularity in the built environment will require supportive regulations and industry-wide standards.