Decarbonised cement production is expected to lift clinker production costs three- to seven-fold, the latter when green hydrogen is used. This Insight sets out that none of the options discussed can lead to complete decarbonisation, although the use of hydrogen, with oxyfuel combustion and CCS, can reduce emissions by up to ~93%.
When comparing decarbonisation options, thermal coal oxyfuel combustion with CCS provides the most favourable mix of emission reductions while limiting the cost uplift. The least favoured option would be directly replacing thermal coal with green hydrogen, as the cost uplift is the most significant, yet shows the least emission reductions.
The significant cost increase for cement decarbonisation partly explains the greater emphasis on the steel sector to decarbonise, where the cost increase is likely only 30–40%.
The cement sector is on a +3.0°C temperature pathway
Cement production accounts for ~8% of global emissions of CO2, mainly from two sources:
- Mineral emissions of CO2 from limestone when it is heated in a kiln to form clinker;
- Fuel emissions, primarily thermal coal used to heat the kiln.
Substitute fuels may be used to lower overall emissions, costs or for other factors.
Clinker makes up the majority of standard Portland cement but substitutes – such as calcinated clays, power station fly ash and blast furnace slag – are also used in some circumstances for cost, quality or emission reduction purposes. Additives such as clay, sand and iron ore are also used to adjust final cement properties.
Decarbonising cement presents significant challenges. Firstly, regardless of the fuel, most clinker production CO2 emissions are the result of limestone mineral emissions. Secondly, key substitutes such as fly ash and blast furnace slag are expected to decrease as the power and steel sectors decarbonise. Given this, cement is usually classified as a hard-to-abate sector because even a technological change would not eliminate mineral emissions.
With cement production increasing out to 2050, emissions from the sector are expected to rise. Indeed, our forecast puts the cement sector well above a 3.0°C temperature pathway out to 2050 (use CRU’s Sustainability and Emissions Service to find out more).
As a result, carbon capture and storage (CCS) is seen as a potential solution, though progress has been slow to date. In this Insight, we set out to explore why this is the case.
CCS is not an easy technology to transfer
Carbon capture solutions have been around for decades, with varying success, and due to this we know CCS costs are closely tied to the concentration and pressure of CO2 in the off gas being processed. These factors affect the partial pressure of the CO2 that impacts absorption efficacy and the amount of gas that needs to be processed and, consequently, the size of the equipment that needs to be installed. CRU has a database of over 300 CCS projects dating back to 1972 and including proposed, future installations. Where available, this database includes information on capture capacity, technology and costs (e.g. capex. and opex.) among other project characteristics. The chart below illustrates the relationship between upfront capex. for a CCS installation and the CO2 concentration in the off-gas stream.
Natural gas processing and hydrogen production benefit from high CO2 concentrations and/or high pressures (i.e. lower volumes) in the off gas, along with relatively clean, consistent gas streams, reducing upfront costs and improving operational effectiveness. Challenges arise when applying CCS to processes that have gas streams with one or more of the following:
- Low CO2 concentration
- Low pressure
- Contaminants (i.e. SO2, NOx, particulate etc.)
- Inconsistent properties
A coal-fired power station, especially one operating on a dispatchable basis, might be considered one of the least CCS-ready processes, with cement plants similarly challenged.
We have analysed several cement decarbonisation options. Each option has different capex. and opex. assumptions based on the technology adopted and the material and energy balance of each process. Assumptions include CCS capex. that is influenced by volume and % of CO2 in the off gas and further influenced by the choice of oxyfuel or hydrogen configurations. Further assumptions consider the size of the combined heat and power (CHP) plant needed for the CCS unit and the size of the air separation unit (ASU) when using oxyfuel.
For all options, we assume a typical, post-combustion CCS system using an amine-based absorbent. Higher CO2 concentration processes might use pressure/vacuum swing adsorption or liquefaction to capture CO2. However, our analysis suggests that cement production will not reach high enough CO2 concentrations for these to be viable, without significant redesign.
These technologies may be more suitable for hydrogen-based options using oxyfuel, assuming cement plants are redesigned to minimise false air. False air can be from leaks within equipment or a purposeful ingress of air to reduce pressure.
Reducing this can be an expensive undertaking as the cement kilns need to be redesigned, sealed and this sealing must be maintained. Reducing false air does, however, have the advantage of increasing CO2 concentration that reduces CCS cost. Therefore, reducing false air would be a balance between lower CCS costs and the costs associated with redesigning and sealing a kiln.
The table below gives a brief overview of each option that was analysed. Use CRU’s Sustainability and Emissions Service to find a complete breakdown of each option.
Decarbonisation will increase clinker production costs up to seven-fold
The chart below sets out clinker costs for each configuration and the carbon price needed to incentivise each option, assuming carbon price is the main driver of the decision. This latter calculation has a slightly different approach as both the base case and options emit CO2 (i.e. none are CO2-free) and so costs of both will change under different carbon prices.
Excluding the simple replacement of thermal coal with natural gas, the technological decarbonisation options studied here lead to a clinker costs increase of at least three-fold. The CCS and Oxyfuel & CCS options raise clinker costs to >$192 /tclinker from our base case of $53 /tclinker. Green hydrogen options lift costs to >$280 /tclinker, while natural gas, oxyfuel and CCS fare best, with costs starting at ~$166 /tclinker. The carbon price required to incentivise a switch to low carbon cement starts at ~$166 /tCO2 rising to over $800 /tCO2 for green hydrogen as a fuel without CCS or oxyfuel. While we based these options on estimated costs, it should be noted that we have not conducted a detailed technical/operational viability assessment.
The technological decarbonisation of clinker production will increase cement costs by at least three-fold, with the green hydrogen + CCS option potentially raising costs seven-fold. We believe this is the key reason why the focus on cement decarbonisation is less than steel for example.
Our analysis suggests steel costs would lift by 30–40% under decarbonisation, assuming the successful implementation of hydrogen steelmaking. Separately, we have built an abatement curve for the aluminium sector that suggests costs may double under full decarbonisation, highlighting cement’s higher cost impact.
Given cement’s ubiquity and significant cost increase, decarbonising cement is less attractive in the near term, thereby shifting focus onto the steel sector, the second most consumed material globally.
CRU is respected for its technical and economic understanding of commodity supply chains. Our analysis is rigorous, unbiased and fact-led. If you want an honest and realistic analysis of your options for decarbonisation, get in touch – we’d be more than happy to talk about our work in CRU’s Sustainability and Emissions Service. You can request a demo for it here.
