1 DEDICATED TO MAKING A DIFFERENCE Vincent Mages Climate Change Initiatives VP Lafarge [email protected] Greenhouse gas mitigation in the cement

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DEDICATED TO MAKING A DIFFERENCE

Vincent MagesClimate Change Initiatives VP

Lafarge

[email protected]

Greenhouse gas mitigation in the cement industry: a sectoral approach

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Some global convictions

Whatever Copenhagen concludes, CO2 is on top of the agenda, worldwide

Climate change first visible impacts Health /water management issues Energy security and access

No country will escape!

CO2 has a value CO2 emissions rights in EU now, in US soon Carbon taxes projects Incentives to improve energy efficiency CDMs …

CO2 has also a growing “marketing” value Carbon footprint becomes a selling point Energy efficient buildings Etc.

What does it mean in our industry?

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CO2: an environmental issue anda double business challenge

Clinker

Cements

Concretes

Other Building Materials

Construction modes

Building and Civil Engineering

CO2

CO2

CO2 reduction regulatory framework

Energy efficiency regulatory framework

““Carbon footprint”Carbon footprint”““Life Cycle Analysis” Life Cycle Analysis”

InnovationInnovationSolutionsSolutions

Illustrative

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• We cannot hide and expect regulations not to come: let’s be proactive!

• Potential international regulatory frameworks (CO2 reduction) will be combined with national regulatory frameworks (energy efficiency): we must work at international and national levels!

• CO2 regulations could impact our ability to meet, business wise, new downstream demand and needs in Buildings and Infrastructures: we must have our voice heard at UNFCCC negotiations level to have the most efficient “CO2 reduction regulatory framework” put in place!

First conclusions

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We, CSI members, have achieved a tremendous work, very positively considered,…

WRI/CSI CO2 protocol

GNR data base

Sectoral Approach Modeling

IEA

/ CS

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Sectoral Approach - What is it?

A combination of policies and measures, developed to enhance efficient, sector-by-sector, greenhouse gas mitigation, addressing data, policy, technology and capacity building within each sector.

1. International Cooperation with major sector actors to develop and share: appropriate sector tools, systems, data, best practices, UNFCCC crediting policies, benchmarking and technology development

2. Nationally Appropriate Mitigation Actions (NAMAs) ‘tuned’ to sector.Emission goals and policies could differ depending on national ambition, common

but differentiated responsibilities, and local circumstances

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Sectoral Approach - CSI Key Principles

A sectoral approach to GhG management must:

Work within the UNFCCC, compatible with existing and future mechanisms (e.g. ETS,CDM/JI);

Include key developed and developing economies;

Use simple metrics and standardized methodologies;

Use verified emissions data to track compliance;

Involve government to help set, monitor and enforce agreed goals;

Enhance new technology development, especially CCS

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Transport & Trade

CO2 Prices, Policies

Emissions Factors,Materials

Availability

Abatement Options

Model Global trade flows

CementDemand

Sector CO2 abatement

Sector CO2 emissions

Regional cement production

Distributional cost impacts

CO2 leakage effects

Transport CO2

Modeling Policy Options:from Principles to Practicalities

Caution: most models are false, some are useful

Results

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Policy scenarios evaluated:

Scenarios involve different mixes of carbon prices, mitigation options, national or regional carbon policies and commitments, etc.

Scope of international commitment post Kyoto

8 world regionsNo commitments Europe cap only Annex I caps Global goals Sectoral approach Global caps

Europe

Japan/Aus/NZ

North America

CIS

China

Asia excl China

Latin America

Africa/Middle East

Absolute CO 2 targets --

Emissions efficiency goals --

No commitments --


Europe

Japan/Aus/NZ

North America

CIS

China

Asia excl China

Latin America

Africa/Middle East



No commitments --


Europe

Japan/Aus/NZ

North America

CIS

China

Asia excl China

Latin America

Africa/Middle East



No commitments --


Europe

Japan/Aus/NZ

North America

CIS

China

Asia excl China

Latin America

Africa/Middle East



No commitments --


Europe

Japan/Aus/NZ

North America

CIS

China

Asia excl China

Latin America

Africa/Middle East



No commitments --


Europe

Japan/Aus/NZ

North America

CIS

China

Asia excl China

Latin America

Africa/Middle East



No commitments --


Europe

Japan/Aus/NZ

North America

CIS

China

Asia excl China

Latin America

Africa/Middle East



No commitments --

Scenarios involve different combinations of carbon prices, mitigation options, national or regional carbon policies and commitments. Many other policy combinations are possible.

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Model reviewed by IEA, LBNL and RITE

Comparison of scenario outputs: CO2 emissions projections

• Emissions increase in all cases from 2005-2030• Impacts occur late in the scenarios, if at all• Only ‘Global caps’ ‘Global goals’ & ‘a sectoral approach’ show impact on emissions

Cement demand forecast from International Cement Review and JP Morgan

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4 Levers for CO2 Reduction

Quantities shown are relative to the “no-commitments” baseline scenario in 2030

Global Caps Sectoral Approach(high CO2 price) (lower CO2 price)

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Trade and Carbon Leakage impacts

Changes in trade patterns, production location and CO2 emissions can occur when different carbon policies in different regions cause significant price differences for the same product.

Policy options are available to help reduce these market distortions

An effective sectoral approach should include specific policies to address this issue

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1. ‘Sectoral approach’ shows real impact from 2020 onwards, and seems to be the most practical to implement;

2. Greater worldwide sector CO2 abatement is possible under scenarios which include non-Annex I actions;

3. Abatement potential varies by region: hence nationally tailored approaches are key.

Energy efficiency lever is weak in cement industry. Alternative fuels and blending options are powerful but require national

policies

5. Risk of leakage (trade and CO2) exists where emissions are capped in one region and not in others.

Key conclusions from Model Studies

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Sectoral Approach: summary

Shows promise to help address climate mitigation with greater speed and scale.

Retains ability for growth If well designed, can permit different national carbon policies with

minimum distortion of trade flows Is a practical approach to engage business and key economies in

mitigation action. Needs national government policies and measures to help deliver

applied technology at national level. Requires good coordination with cement trade associations to

develop local and regional action.

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We, CSI members, have achieved a tremendous work, very positively considered,…

WRI/CSI CO2 protocol

GNR data base

Sectoral Approach Modeling

IEA

/ CS

I

Tech

no

log

y Ro

adm

ap

CD

M n

ew m

etho

dolo

gy

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… but

• The debates in Copenhagen will not end in December 2009: we must stay mobilized again in 2010 to promote, refine and adapt the Sectoral Approach proposition to NAMAs.

• As CSI, in cooperation with Trade Associations, throughout our international and national contacts, we have to be proactive and solution oriented

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You want to find out more details and discuss further sectoral approaches?

Let’s meet at 3:15 in the Zirconium room!!

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www.wbcsdcement.org

Thank you!

Documents

1 DEDICATED TO MAKING A DIFFERENCE Vincent Mages Climate Change Initiatives VP Lafarge [email protected] Greenhouse gas mitigation in the cement