2003 cement best practices

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There exist two very different marketsbulk sales for large infrastructure projects (airports,roads, buildings, etc.) to governments and companies; and bagged products sold toindividuals for personal use in homes, churches and local structures. Bagged cementsaccount for an estimated 65% of the worlds production. The worldwide market for cementhas grown an average of about 4.4% annually for the last 70 years. However, the growthrates, closely tied to the construction cycle, vary significantly in different parts of the world.

In China and Latin America growth rates are high, ranging from 5 to 15% per year. InWestern Europe and the US the growth rate is close to zero. As a consequence of Chinasrapid industrialization in the last 20 years, the Chinese market is approximately one-third ofthe worlds total today.

ProductsWhile a number of different kinds of cement can be produced, the most common product isOrdinary Portland Cement (OPC), named after the white color of stone quarried on the Isleof Portland in the United Kingdom. In Western Europe, nearly half the cement producedconsists of OPC. Other products such as blended cements (containing other cementitiousmaterials) constitute most of the rest. In the United States, more than 90% of the cementproduced is OPC. Cement standards developed by a variety of national and international

standard-setting organizations (CEM in Europe, ASTM in the United States, for example)generally define the acceptable composition and/or properties of different cement products.Performance-based standards are preferable, but not always available. In most cases thestandards were designed to assure customers that cement which meets particularspecifications will perform as needed.

International TradeCement is essentially a local product. With the exception of certain specialty materials,cement is a fungible, commodity productcement produced in one location is the same ascement produced at another. But, because of its weight, cement supply via landtransportation is expensive, and generally limited to an area within about 200-300 km of anyone plant site. Long distance transport via water is becoming more common. It is less

expensive per ton to cross the Atlantic Ocean with a 35,000-ton cargo of cement than tomove a truck full 300 km on land. The United States imported 28 million tonnes of cementin 2000, nearly 25% of its consumption. Worldwide, slightly more than 100 million tonnes ofcement were moved for international trade by sea, approximately 6% of the total produced.4

OwnershipThe cement industry operates in about 150 of the worlds 1925 countries. The industry isconsolidating globally, but the ten largest international firms only account for about one-thirdof the worldwide market. (Compare this to the automobile sector where the largest eightmanufacturers produce nearly 90% of the worlds cars.) Thousands of smaller cement firmsremain in the ownership of their founder families. Some national industries are primarilystate-owned, such as China's. Others, such as Egypts were nationalized, but now are

moving toward private ownership.

Manufacturing TechnologyMaking cement consumes a great deal of energy, material and capital. The cement industryis one of the most capital-intensive industries: the cost of a new cement plant can beequivalent to about 3 years of revenue. Modern cement plants have capacities well inexcess of 1 million tonnes per year. Once built, facilities may last for 50 years.

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depending, of course, on market demand and other commercial factors. The average plantproduction across the US, France and Germany is 675,000 tonnes/day. Large plants canonly be constructed with horizontal rotary kilns. Industry growth is in developing economies.Consequently, plants in the developing world, where the industry continues to expand anddevelop new sites, may be larger, cleaner and more efficient than those in the developedworld, which were built 10, 20 or even 30 years earlier.

In China and other countries where there is a lower level of foreign investment in the cementindustry, plant sizes are small. In China in 1999 the average size plant was less than one-tenth the average European-US size, and less than 1/20th a modern world scale facility.

EmploymentThe cement industry is a relatively small employer. Modern cement plants are highlyautomated; less than 200 people can staff a large plant. Worldwide, the industry employsabout 850,000 people. There is a multiplier effect on direct employment indicating that theindustry provides direct and indirect employment for nearly 1,000,000 people who work inthe supply chain as suppliers, transporters and other roles. Labor productivity hasincreased substantially since the 1980s: employment per million tonnes of product (outside

of China) has dropped from 555 in 1980 to 272 in 2000.88

Impacts of Cement ProductionEmissions, discharges and wastes9

Major emissions from cement manufacturing are traditional airborne pollutants, primarily asexhaust gases from the kiln and fugitive dust. Pollutants include oxides of sulfur andnitrogen (SOx and NOx) and particulates from a variety of solids processing and handlingoperations. In addition there may be a variety of micro-pollutants from the combustion oftrace materials in fuels or feedstocks. See Table 1, below for typical emissions limits (notoperations) in several regions of the world. In relative terms, the cement industry is a smallcontributor to SOx and NOx emissionsless than 2% of the total in the US and UK, forexample. Other major sources include iron & steel mills, refineries, and power plants.

Particulate emissions (dust) are closely associated with cement manufacture. Significantprogress has been made in reducing airborne emissions. As emissions control technologyevolved it has been adapted to cement manufacturing equipment. A new plant today hasemissions that are at least 90% less than those from typical facilities built 30-40 years ago.

Table 1. Representative Emissions limits for Cement Kilns

Emission Item mg per standard cubic meter [mg/Nm3], 10 vol% O2 , except as noted

Region or Country EU USA Australia Brazil China

Dust30

0.15kg/Mg dry

feed100 77 100

NOx 800 (existing plant)500 (new plant)

- 940 - -

Mercury 0.05 0.12 3 0.04 -

HCl 10130

ppm(v)200 1.8 kg/h -

Dioxin like cmpds,[ng/Nm

3]PCDD/F

0.1 0.2 0.11 - -

Source:Battelle, 2002

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Water pollution is generally not a significant issue for the industry. Solid wastes, particularlycement kiln dust (CKD) must be handled carefully. In some circumstances they are recycledinto the kiln as feed. In other circumstances, it has been necessary to adopt specific wastemanagement practices for proper disposal.

Micro-pollutants (so called because of the extremely small quantities emitted) have beenmeasured in cement kiln stacks. These include metals (Vanadium from fuel oil is the mostcommon), dioxins, and poylaromatic hydrocarbons (PAHs). In the last five years, extensivemeasurements have been made at cement facilities in Switzerland, Australia, the UnitedStates, United Kingdom, Germany and Japan. These measurements are both difficult andexpensive, with a relatively wide range of results. In many cases, the substances measuredare below the analytical detection limits with current equipment. Despite the generally lowlevels, these materials remain a significant problem for the industry, as discussed in thesection on Critical Issues, below.

CO2 EmissionsThe cement industry produces 5% of global man-made CO2, a major greenhouse gas

contributing to climate change. CO2 comes both from burning fossil fuel, and from thecalcination (chemical) reactions converting limestone into clinker. Today, approximately oneton of CO2 is produced for each ton of clinker. As concerns have grown about manscontribution to global warming, many countries have adopted limits on CO2 emissions. Thisis also discussed in the Critical Issues section below.

Land UseLimestone, the primary raw material for cement, is abundant and widely available.Quarrying activities associated with limestone are significant in terms of size and impact onbiodiversity and the surrounding communities. In many countries, environmentalassessments (sometimes combined with social assessments) are required before newquarrying operations can begin. However, the quality of the assessments, and the

enforcement of any provisions for remediation and rehabilitation vary significantly. Thereare no universal standards for quarry operation, maintenance, closure, and rehabilitation.

Health and SafetyIn places where performance information is available (and it is generally difficult to find), thecement industry has a relatively weak employee safety record, with higher incident rates andfatalities than a number of other industries. In the UK and US, accident rates in the cementindustry are three times the average rate for all heavy industry. Preliminary analysis bymembers of the Cement Sustainability Initiative indicates that nearly half of all incidents aretransportation relatedmoving raw materials or finished product.

Critical Industry Issues

The cement industry provides a key product used in developing infrastructure to serve socialneeds such as shelter, roadways, water and sanitation services. In addition, it disposes ofunwanted waste materials in an environmentally responsible way. The recent Battelleresearch combined with stakeholder dialogues, identified six critical issues for the industryas it strives to integrate sustainability concerns into its normal business practices. Theseare:

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1. Climate Protection: Managing the industrys CO2 emissions to reduce impactson climate change, and optimize financial impacts of various CO2 controlschemes.

As noted earlier, cement is a low value product, with a world-wide average price of$52/tonne in 2000. As the industry produces an equal weight of CO2 and clinker, any costs

associated with CO2 management could have significant impacts on the industrys financialperformance. Many current CO2 management schemes envision market prices for CO2 of$5-25/tonne. While prices are at the low end of this range now, they are expected to rise associety deals more actively with a carbon-constrained world.

2. Responsible use of fuels and raw materials: increasing the use of alternativefuels, including wastes, and alternative materials can reduce the use of virginmaterials, including limestone and petroleum products, reduce CO2 emissionsand reduce costs.

Alternative materials such as fly ash from power plants, slag from steel mills, and otherpozzolanic materials, can be substituted for limestone in cement. The resulting blended

cement can be equally suitable for many applications to pure OPC, but uses substantiallyless limestone and fuel. Yet many cement standards set by national standard-settingorganizations inhibit the more widespread use of blended cements, by specifying cementcomposition criteria instead of cement performance criteria.

Burning alternative fuels, such as used tires, provides society with an environmentallyresponsible disposal option, compared to landfill or open disposal (dumping). And, unlikeincineration, where no value is recovered, the recovered energy in the cement kiln reducesthe need for other hydrocarbon fuels. Using alternative materials offers similar benefits.The material recovered (from slag and fly ash for example) is contained in the cementmatrix, and reduces the need for virgin sources of iron. The public is concerned aboutemissions from burning these waste materials in other than specially designed incinerators.

Consequently, many cement plants are prevented by local and/or national authority fromburning these materials.

Many NGOs argue that using cement kilns for waste disposal, even if safe, iscounterproductive because it offers a low cost disposal option and thus encourages wastegeneration. Following the waste hierarchy, they argue, requires considering reduction,reuse, and recycling before disposal.

3. Improving employee health and safety: the industry can and must reduce thenumber of injuries and fatalities, striving for performance at least as good as thepetroleum and chemical sectors.

4. Reducing emissions: the industry must continue to monitor and reducetraditional emissions and deal more effectively with the concerns about micro-pollutants, such as metals, PAHs, and dioxins.

In most developed countries emissions of SOx , NOx and particulates have been reducedsubstantially through a combination of improved technology and specific regulatorystandards. This is not true in many developing countries where missing or laxenvironmental standards, coupled with poor enforcement mechanisms and limited capitalleaves unacceptably high emission levels. In China, for example, particulate emissions from

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cement plants accounted for 40% of the countrys estimated 25 million tonnes of particulateemissions in 1998. In the publics mind, the industry everywhere continues to be associatedwith high levels of dust.

Alternative fuels are successfully used in many countriesFrance, Germany, the UnitedStates, Japan, and many others. However, emissions from burning alternative fuels have

raised deep concerns for the public in many situations. The industry needs an effective wayof monitoring and reporting emissions that will address plant safety and product qualityconcerns. Despite many past measurements, the industry has not yet made a convincingcase that emissions from kilns using alternative fuels are no different than from kilns usingnormal fuels. Similarly, concerns about product quality and safety continue to be raised bythose opposed to alternative fuel use.

5. Managing impacts of cement facilities on land use and local communities:Initial efforts to make and use environmental and social impact assessmentsneed to be strengthened, including publishing quarry management plans, dealingwith biodiversity protection, and handling plant and quarry closures inenvironmentally and socially responsible ways.

6. Communicating more effectively with stakeholders about facility operations,emissions, and management plans.

The cement industry has a low public profile, and a history of limited engagement withstakeholders outside the industry. In many cases this reflects the tradition of long-established businesses, and the family-dominated ownership (at least initially) of many.During the seven stakeholder dialogues held as part of the WBCSD cement sector study,many participants remarked that this was their first opportunity to interact with the industry.They were pleased with what they learned, but wanted opportunities to hear and learn more.

Industry response to Critical Issues

The Cement Sustainability Initiative was begun both to identify these critical issues, and toformulate appropriate, actionable responses to them. Through case studies, the researchfound that many of the problems described above had been addressed successfully, albeitnot universally and not in a systematic way. The research identified pockets of excellencewithin individual companies, accompanied by pockets of poor performance, sometimeswithin the same company.

The Initiative is working to develop consistent and widely applicable guidelines andprotocols for dealing with these issues. As a group, the companies (now 13) engaged in theInitiative will address guidelines for CO2 management, responsible use of fuels and rawmaterials, an emissions monitoring and reporting protocol, and environmental and socialimpact assessment. As individual companies (representing more than 1/3 of the worlds

capacity), each company has agreed to implement the protocols and guidelines developedat their operating facilities.

Of course, companies and groups of companies cannot solve these problems in isolation.There are clear needs for cooperative efforts by policy makers, labor, professionalassociations, and others in devising, testing and communicating effective solutions.

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Current Best International PracticeClimate Change Management

Today, even leading companies are struggling to understand, keep up with, and ultimately

succeed in managing climate change issues. Information and requirements are rapidlyevolving, as is the participation of others. (See discussion below under Policy Trends.) Keyfactors for success will be:(1) A complete inventory of CO2 (the only significant greenhouse gas for the cement

industry) emissions, on a facility basis and for the corporation.(2) An understanding of each facilitys individual CO2 cost control curve. How much will it

cost to control the next ton of CO2?.(3) Development of CO2 trading, offset, and other management strategies. Define the

options and costs for each.(4) Integrating CO2 costs into corporate financial decision-making using probabilistic

modeling with a range of CO2 prices.

Responsible Use of Fuels and Raw MaterialsAlternative fuels and raw materials offer substantial benefits to both industry and society.They can reduce virgin material use (including energy), quarrying activities, CO2 emissions,and potential waste disposal problems associated with landfills and incinerators. Manycompanies have incorporated some use of AFR into their strategic business planning. Keybest practices are:(1) A well-defined and carefully communicated policy on use of these materials, including

what will and what will not be used.(2) Effective systems for emissions monitoring and reporting, including materials of public

concern, even in the absence of regulatory requirements. This may require externalauditing and verification from time to time.

(3) Effective processes for engagement with local stakeholders as a normal business

process.(4) Well-defined processes and procedures for handling AFR materials, including adequate

health and safety systems to ensure that employees and neighbors are not exposed.

Employee Health and SafetyTechniques for improving health and safety performance are well known, and have beenapplied successfully by a number of organizations. Key features of best-in-classperformance include:(1) Incorporating safety into the working culture of the organization though continuous

reinforcement of safe working practices, use of safety awards, and senior executiveattention.

(2) A systematic program for tracking, reporting, and analyzing all safety related incidents,

including near-misses.(3) Communications systems within the company or group to quickly share all safety related

information so that problems are not repeated multiple times before institutional learningoccurs.

(4) Ongoing analysis of incidents, responses and progress to provide information and focuson continuous improvement.

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Emissions ReductionSome of the same techniques required for successful use of AFR materials are alsorequired as part of an effective emissions management system. Key elements are:(1) A well defined emissions inventory and reporting process, including an understanding of

emission reduction costs(2) A program for effective engagement with local stakeholders including regulatory

personnel. Public reporting of emissions and emissions reduction progress is animportant part of the engagement program.

(3) A process for defining emission reduction targets that accounts for public concerns, planteconomics and current and pending regulatory requirements.

Local impacts on land and communitiesIn most developed countries, there are recommended (if not mandatory) programs fordealing with local impact issues. These are not necessarily well entrenched in developingcountry markets, where regulatory programs may be less developed, and/or enforcementand follow-up lacking. Key elements of best practice include:(1) Apply environmental and social impact assessment tools to all new projects.(2) Develop land use management plans for all operating facilities, in consultation with local

communities.(3) Provide written quarry rehabilitation and share with local communities. Update plans as

needed, reflecting then current technology and community needs.(4) Develop adequate advance planning for plant closure, and other significant changes with

major community impacts in consultation with community leaders. Communicatefrequently in times of change.

Effective CommunicationsMany of the best-practice items above included a strong communications component.Indeed, stakeholders again and again indicated the need for communications as a keyingredient in retaining a plants license to operate. Effective communications is necessarilytailored to the target audience. Different societies deal with issues concerning business,

environment, employment, and social responsibility in different ways and in differentorganizations. The items below have been effective in Western (US, Europe, Canada,Australia) locations. At a local level, good communications must:(1) Identify what needs to be communicated, and the existing level of local understanding,

biases, and opinions on these issues.(2) Identify and work with decision maker that affect the local facility.(3) Understand local circumstances, environment, critical issues.(4) Engage with the community on a regular, on-going basis, both from a business

perspective and via more personal contacts through individual employee interactions.

Policy approachesPublic policy approaches to the cement industry have followed the traditional lines of

regulating emissions from many large industries: media specific programs dealingseparately with air, water, and waste management. These have included:

Command and control regulations (technology mandates, emission limits, productcomposition regulation, etc.)

Enforcement and fines Criminal sanctions including prison Information disclosure (emission reports) Voluntary programs (CO2 limits and voluntary reductions) Incentives (fuel or carbon taxes, carbon trading schemes, design contests)

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There are few instances where policy has been successfully designed or implemented todeal with cross-media issues and pollution movement crossing regional and nationalboundaries. Why? Enabling legislation frequently failed to consider these broader, moreintegrated problems. In addition, more flexible approaches, such as setting performancestandards instead of equipment requirements, can be more difficult to monitor and enforce.

In many cases these policy approaches involve specific, complex rules defining emissionslimitations (permits), equipment requirements (technology mandates), measurementprotocols, management standards, and reporting procedures. In many cases theseprograms have effectively reduced traditional emissions, although many have argued thatthe reductions have come at a higher cost and with greater complexity than necessary.

The United States in particular has developed a highly complex environmental regulatorysystem, with both State and Federal regulations and authority. To choose just one simpleexample, the Clean Air Act renewal of 1990, reauthorized legislation of the first Clean Air Actin 1974. The renewal ran to some 300 pages, and instructed the Environmental ProtectionAgency to develop specific regulatory programs for its implementation. Some dozen years

later, the Agency is still at work writing the required regulations. It recently issued theNational Emission Standards for Hazardous Air Pollutants (NESHAP) for Paper and WebCoating Facilities, as part of this process.10

Many other countries have adopted this model. It has the advantage of detailed rules whichattempt to provide clear instructions, public participation in the rule-making process, andopportunities for judicial appeal. However, to function effectively, this, or any other system,requires a fully functioning enforcement system, clear legal procedures, and transparentdecision-making processes.

While some baseline level of performance is absolutely necessary (including strong, uniformenforcement), more successful policy approaches deal with setting overall goals and

performance objectives, while permitting innovation and latitude in how these objectives areachieved; providing incentives for early action; and recognition for leadership activities.

Policy TrendsClimate Change complexity. Many countries have already adopted climate changemitigation strategies which will require significant reductions in energy use and greenhousegas emissions, despite the uncertain outcome of the Kyoto Protocol. Such programs areheavily concentrated in Europe at this time. These will have many business impacts. At aninternational level, there is not yet a consistent framework for managing climate issues. TheUnited States has declined to participate in Kyoto, although voluntary programs are beingpromoted. Individual US States are developing individual climate mitigation programswithout the benefit of a national framework. Europeans are moving aggressively ahead with

emission limits, trading programs, and industry-by-industry agreements.

Business will have the increasingly difficult challenge of understanding the specific goalsand processes of these evolving, and varying programs. Absent a unifying framework, andmutual recognition of different trading regimes, climate change programs of increasingcomplexity and high transaction costs appear unavoidable.

Industrial Ecology and Sustainable Development. There is increasing interest in promotingan ecosystem or industrial ecology approach to managing industrial emissions. The most

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widely quoted example in Kalundborg, Denmark is viewed as a model, even though itevolved without regulation in response to market-driven material and energy availabilitiesand exchanges. To date, however, these efforts have been limited to some demonstrationprograms. It is difficult for regulatory agencies to reach across the dividing lines of differentregulatory programs and adopt a systems or ecosystem approach to problem solving.

The cement industry would benefit greatly from a more inclusive, systems approach tomanaging the issues of CO2 reductions, alternative fuels/materials, product standards, andemissions reporting and monitoring. Increased use of other materials will allow lesslimestone to be mined and used, provides an environmentally sound disposal option forwastes which are difficult or ineffectively managed, and is a critical factor in a successfulindustry response to CO2 limitations. If these issues are handled on a traditional,segregated basis there are likely to be contradictory requirements, and significant expense.

Land Use and Landscape Managementmanaging restricted areasThe value of ecosystems is increasingly recognized, as demonstrated by the well-publicizedlists of endangered places and species, and ecologies. As ecosystems frequently cutacross political boundaries, policy in the international arena has been set by treaty and

convention. The United Nations has adopted a number of conventions related toenvironmental management.11 More recently there have been efforts to regulate bywatershed region, rather that by geographic boundaries. Increasingly, access to naturalresources will be made contingent on firm agreements to manage impacts effectively.Where some developing national governments have difficulty with enforcement, internationalNGOs are playing an increasingly effective role in designing programs, and monitoringimplementation.

More public disclosureMandating public disclosure has become one of the most successful approaches toimproving environmental quality, since the US EPA first began publishing reports of theToxics Release Inventory (TRI) in 1988.12 The European Union has adopted similar

legislation, which comes into effect in 2003. Public disclosure requires little in the way ofregulatory expertise. Yet disclosure almost always leads to public scrutiny, demands forimprovement, and peer group competition between businesses in similar industrial sectors.The NGO community has begun to adopt publicly reported information into ranking andcommunity information networks.13 When focused on local issues, this kind of informationcan have dramatic impacts on community response to environmental and social matters.

1 See Battelle, Toward a Sustainable Cement Industry, commissioned by the World BusinessCouncil for Sustainable Development, Geneva, Switzerland, March 2002.

2 See The Cement Sustainability Initiative Our Agenda for Action, World Business Council forSustainable Development, Geneva, Switzerland, July 2002.

3See also web materials at www.wbcsdcement.org

4 Source: OneStone Intelligence GmBH, Germany, Cement Project Focus 2005, a private clientsurvey, published 2001.

5 As of July 2002.

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6 See USGS Minerals Yearbook, 2001, Cement, p. 12.

7 International Energy Agency, The Reduction of Greenhouse Gas Emissions from the CementIndustry, Report No. PH3/7, May, 1999, Paris.

8 Time series data are not available for China, but Battelle estimated approximately 1000 persons permillion tons of product in 2000

9 AEA Technology, Environment Health and Safety Performance Improvement in the CementIndustry, part of the Cement Sector study of the WBCSD, December, 2002, Geneva.

10 See United States Federal Register, December 4, 2002, pp. 72329-72362

11 The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes andtheir Disposal, the Convention Concerning the Protection of the World Cultural and Natural Heritage,the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), andthe 1987 Montreal Protocol on Substances that Deplete the Ozone Layer are examples.

12Under the Emergency Planning and Community Right to Know Act (EPCRA). See, for example,

http://www.epa.gov/tri/. Similar pollutant release and transfer registry (PRTR) programs have been orare being developed for use in the United Kingdom, Japan, Australia, Mexico, Norway, Canada andthe Czech Republic.

13 See for example, Environmental Defense, Scorecard at www.scorecard.org, which allows privatecitizens to access environmental data about specific facilities in their community, communicate withregulators and with plant management.

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2003 cement best practices

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