Assisting Developing Country Climate Negotiators through ...ccap.org/assets/Energy-Saving-and-CO2-Emission...The total value of industry-wide investment in fixed assets reached 65.4

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Assisting Developing Country Climate Negotiators through Analysis and Dialogue: Report of Energy Saving and CO2 Emission Reduction Analysis in China Cement Industry

Tsinghua University of China

November 13, 2008

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Contents I. Sector Overview ...................................................................................... 4

I.A Current State................................................................................................ 4 I.B Cement Production ...................................................................................... 6 I.C Emission...................................................................................................... 7 I.D Characteristics of energy used...................................................................... 8

I.D.1 Energy consumption varieties............................................................ 8 I.D.2 Energy efficiency .............................................................................. 8

I.E Technology and facility levels ...................................................................... 9 I.F Concentration level .................................................................................... 10

II. Data gaps ................................................................................................ 11 II.A The proportion of different facilities in every production link ....................11 II.B The energy consumption indicators of kiln types....................................... 12

III. Annual BAU estimates of key parameters through 2025.............. 12 III.A Production/output forecast....................................................................... 12 III.B Change in industry structure and scale..................................................... 13 III.C Energy and fossil fuel consumption (by type) forecast............................. 14 III.D CO2 emissions and intensity forecast ...................................................... 15

IV. Analysis of the potential mitigation options ................................... 16 IV.A Technologies required and availability ..................................................... 16

IV.A.1 Grinding technologies................................................................... 17 IV.A.2 Clinker burning technologies ........................................................ 18 IV.A.3 General measures.......................................................................... 20

IV.B Energy saving and emission reduction potential....................................... 21 IV.C Marginal abatement cost curve ................................................................ 29

IV.C.1 2010.............................................................................................. 30 IV.C.2 2015.............................................................................................. 31 IV.C.3 2020.............................................................................................. 33 IV.C.4 2025.............................................................................................. 35

IV.D Analysis of mitigation scenarios .............................................................. 36 IV.D.1 Scenario description...................................................................... 36 IV.D.2 Results.......................................................................................... 37

IV.E Barriers.................................................................................................... 39 IV.E.1 Policy barriers ............................................................................... 39 IV.E.2 Market barriers.............................................................................. 39 IV.E.3 Financial barriers........................................................................... 39 IV.E.4 Technical barriers .......................................................................... 40

V. Impact on international trade ............................................................. 40 VI. Potential government and private sector policies to implement mitigation options and sectoral programs.................................................... 41 VII. Observations.......................................................................................... 42

VII.A Popular use of low-grade cement resulting in serious waste of resources 42 VII.B Weak comparability of the integrated energy consumption of varieties of

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cement............................................................................................................. 43 VII.C Production affected by coal of low-quality............................................. 43 VII.D Self-solving the surplus labor force generated from structure adjustment44 VII.E Different education levels of labor in enterprises of different scales ....... 44

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I. Sector Overview

I.A Current State1

In 2007, the overall operation and development of the cement industry is good. A. the production and operation situation a) Cement production and sales boom. National cement production reaches 1.36

billion tons, representing a 9.9 percent growth than last year. The sales output value is 410.4 billion yuan, increasing 23.1 percent, and the increase in output growth is 6.6 percentage points higher than that in production. From January to November, cement industrial enterprises made the main business income 350.4 billion, an increase of 22.8 percent from the same period in 2006. The average cement production and sales rate is 98.3 percent which is basically the same as the previous year.

b) Price level steadily increased. Despite the price fall in early beginning of 2007, annual cement price steadily rose.. Especially after November, in large and medium-sized cities such as Haikou, Changsha, Nanchang, Zhengzhou, Urumqi, Chengdu, etc,, cement prices revealed short-term rapid rise up to 600 yuan or so. The average ex-factory price of China's major cement companies increased nearly 10 yuan in 2007 than that in 2006.

c) Substantial improvement in economic efficiency. From January to November

2007, cement industrial enterprises made net profits of 20.7 billion yuan, up 64.7 percents compared with the same period of last year.

d) Significantly enhanced international competitiveness. In 2007 the total export of

cement and cement clinker reached 33 million tons, an 8.6 percent decrease from last year. This shows that cement export tax rebate adjustment policy from July 1st has begun to show effects. However, with a large number of the cement technologies and equipments transplanted to other countries, China's cement industry increased its international competitiveness. China now shares about 30% of global cement equipment market.

e) The resumption of growth in cement investment. In 2007, investment in fixed

assets resumed growth in general after declining for two consecutive years, with the growth in the first half of the year up to 54.3 percent, followed by a decline. The total value of industry-wide investment in fixed assets reached 65.4 billion yuan. During 2006 and 2007, in provinces in east China with rapid development of NSP, the growth rate of investment decreased, and some even ended up with

1 Guixin Lv. The development trend of cement industry-2007 Review and 2008 Outlook. China Cement, 2008, 05: 19-21.

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negative growth. On the contrary, in the mid-south, southwest and northeast regions where the development of cement is slow in last two years, the investment increased considerably, and some provinces showed double-digit increase. Meanwhile, investment focus exhibited a trend of transfer from the eastern part of the mainland to the inland. In 2007, 88 new large-scale New Suspension Pre-heated Dry Process (NSP) production lines were built and the additional cement clinker production capacity reached 89.4 million tons.

B. the implementation effect of macro-control measures a) Implementing the control measures to expedite structural adjustment. In 2007,

under the guidance from the State Council and other relevant departments on Accelerating the adjustment of industry overcapacity notice, seriously implemented The views on structural adjustment of cement industry, The industrial policy for the development of cement industry and Special plan for the development of cement industry and other important governmental polices, China’s cement industry enforced price differential policy for out-of-date technologies, abolished the tax rebate rate for export, amended and issued The implementation rules for the cement production permit and intensify the implementation of The cement industry emission standards. Industry structure was further optimized. The proportion of large scale NSP increased to 55%, 5 percentage points higher than last year. Large enterprise groups through market merges and acquisitions of small ones has grown in strength and speeded up the process of other mergers and acquisitions which resulted in increased industry concentration. The top ten largest cement production enterprise groups accounted for 23% of the national cement production, comparing to 20% in 2006.

b) Phasing out out-dated production capacity. Early in 2007, the National

Development and Reform Commission (NDRC) specifically issued the notice to do a good job on the elimination of outdated production capacity of cement work to make a comprehensive plan. In 2007 China has dismantled out-dated shaft kiln production lines with total installed capacity of more than 52 million tons, accomplishing the goal made in the beginning of the year. Zhejiang, Henan, Beijing, Shanghai stepped forward and had shut down or dismantled all shaft kiln lines.

c) Promoting mergers and acquisitions. In 2007, the NDRC and the industry

associations jointly held a forum of large enterprises to promote better implementation of the differential treatment policy for large-scale enterprises (groups), showing the state's strong support for industrial restructuring. These business gained priorities in investment, mergers, the project approval, land examination and approval, credit and other areas. At the same time, great attention was paid to strengthen corporate social responsibility, helping local government to phase out outdated production capacity.

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d) Promoting energy conservation and emission reduction. The NDRC in 2007 continued to allocate appropriate amount of financial support from the energy conservation and emission reduction special funds for cement waste heat cogeneration which involved 121 projects with total capital subsidies up to 670 million yuan. The NDRC also released cement energy consumption limit standards and clean production rules, held the circular economy on-site experience-sharing sessions, summed up the advanced technologies and experiences in energy-saving and emission reduction, and so on. As a result, the total energy consumption per ton cement was 115 kilograms (kg) standard coal, representing a decrease of 4% from last year; comprehensive utilization of a variety of solid waste reached more than 400 million tons, also a significant increase over last year.

However, the performance of cement industry in 2008 may have instability potential in four major aspects as follows: Firstly, the structure adjustment and phasing out of outdated production capacity is imbalanced. At present, the average ratio of NSP reaches 55%; for Zhejiang Province this ratio went as high as 100%. However, there are still a small number of provinces with a NSP ratio less than 30%. Secondly, the current prices of external raw materials add more pressure to cement industry. Coal, electricity, oil, transportation prices are continually increasing. Cement companies in East China have begun to reflect that coal prices had increased 100 to 200 yuan from earlier this year. Finally, the cement market is volatile. Due to strong demand and greater commitment to phase out the backwards, some local markets didn’t follow the principle of large on and small out very well, causing fluctuating regional prices at certain periods.

I.B Cement Production

The nation-wide production of China’s cement sector from 2000-2007 is detailed in table 1-1. It is obvious that there exists an increasing trend in the period, rising from 597MT in 2000 to 1360MT in 2007, expanding 2.3 times. The growth rate is shown in Figure 4-1.

Table 1-1 The cement production from 2000 to 2007(MT)

Year Cement Production

2000 597 2001 640

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2002 725 2003 863

2004 970 20052 1064

2006 1237

20073 1360

Figure 1-1 The cement production and annual growth rate

I.C Emission

Based on statistical analysis, the production of every 1 ton of cement will generate 0.815 ton of CO2, 0.390 ton of which is due to fuel combustion, and 0.425 ton is due to the decomposition of raw materials.4 Based on annual production data, the cement industry-wide emissions can be estimated and the results are presented in table 1-2. Due to the fact that the emission calculation uses a fixed CO2 emission factor (0.815tCO2/t-cement), the result is linear with the cement production, generally presenting the same trend. Table 1-2 CO2 emissions in cement sector

Year Emission/Mt Annual growth rate 2000 486.6 2001 521.6 7.20% 2002 590.9 13.28%

2 Data of 2000-2005 from Chinese Cement Yearbook 2007. 3 Data source: Guixin Lv. The development trend of cement industry-2007 Review and 2008 Outlook. China Cement, 2008, 05:19-21. Data of 2006 are calculated from 2007. 4 Lan Wang. Research on the CO2 emission reduction of China cement industry, 2006, 04:34-35.

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2003 703.3 19.03% 2004 790.6 12.40% 2005 867.2 9.69% 2006 1008.6 16.31% 2007 1108.4 9.90%

Figure 1-2 CO2 emission trend in cement sector

I.D Characteristics of energy used

I.D.1 Energy consumption varieties

The primary energy sources of Chinese cement industry is coal: rotary kilns mainly use bituminous coal; while shaft kilns typically use anthracite.5 As technology advances, low-volatile coal and anthracite have also been used for calcining cement clinker in rotary kilns in recent years. Cement production consumes fuels in the process of ignition. A small number of white cement plants use heavy oil or residue oil. Self-owned mines use cars for the transportation of oil. This part of the energy consumption is excluded in the statistics of energy consumption in our estimate of the production of cement.6

I.D.2 Energy efficiency

Compared with national and international advanced numbers, the national average level of energy efficiency still needs significant improvement. Seen from the table 1-3, the national advanced level of the heat consumption of clinker-producing is almost close to the international advanced one, but the national average level is about 1.15 higher. Considering the emissions generated from cement production, such as 5 http://www.dcement.com/Article/200505/30778.html 6 Chinese Cement Yearbook 2007:105.

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SO2,NOX, dust, the relative efficiency indicators are 2 to 4 times as international advanced levels. On the other hand, the products quality can’t reach the same standard of international advanced level either. Table 1-3 The energy efficiency of cement sector

Columns International Advanced

National Advanced

National Average

Heat consumption per

clinker（Kj/Kg） 2900 2950 3344

Total consumption per

cement（kWh/t） 85 90 110

Kiln dust emission concentration

（mg/Nm3） 15 50 100

Kiln smoke NOX emission concentration

（ mg/Nm3） 200 500 1200

Kiln smoke SO2 emission concentration

（mg/Nm3） 50 200 400

Clinker Intensity

（MPa） 70 62 58

I.E Technology and facility levels

The decomposition process out of the kiln in NSP is currently the most advanced technology in the cement production, representing the future of the industry. As 100%, 97%, 94% and 90% of South Korea, Thailand, Japan, Germany’s cement industry are equipped with NSP, China's NSP lines only account for 45% of the industry. By the end of 2007, 7 according to the China Cement Association statistics, there were 798 NSP production lines nation-wide with annual capacity of clinker up to 607.042 million tons8. Waste heat cogeneration is the key technology in cement industry to reduce energy consumption. However, the combustible waste replacement ratio of China's NSP cement plants and self-production of electricity level are very low, comparing to the developed countries’ standard. It is reported that by June 2007, the waste heat boiler combustion power generation system has been equipped with the NSP lines, but only 7 Xiangzhong Kong. The development of China cement and outlook of market. Liaoning Building Materials, 2008,04:6. 8 This is based on the production run of 310 days of their operational lives.

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less than 10 have been installed. And only 3 NSP lines have pure low-temperature waste heat cogeneration system. In addition, the research on using cement kiln for the disposal of urban industrial waste in China started relatively late. The Beijing Cement Plant developed the first domestically designed set of such line. This so-called environmental protection line aims to realize improvements related to industrial waste transportation, pretreatment, mechanization and automation of burning disposal. A vertical kiln can reduce 30% of energy consumption comparing to traditional tube kiln and thus became the key equipment that China’s cement industry intends to develop. The domestic design and development of vertical kiln reducer succeeded in 1989. With the number of NSP cement production lines with installed capacity of 3000 to 5000 tons per day increasing, high-power vertical kilns were also successfully designed. The domestically designed vertical kiln reducers have been exported to other countries, signifying that China has entered the international market of raw materials production lines of 5,000 tons per day.9

I.F Concentration level

At present, the NSP lines with production capacity of 2000-5000 tons account for 43% of China’s total cement production lines, while more than 5,000 tons ones share 17%, those less than 2,000 tons take 40%. According to preliminary statistics in 2007, 88 newly-built production lines were put into operation. 5,000-ton production lines accounted for 46%, 2000-5000 ton production lines accounted for 49%, less than 2,000-ton production lines accounted for only 5%, which can be a trend that we focus on large-scale enterprises in the NSP development. According to preliminary statistics, M & A and restructuring brought about rapid expansion of production capacity in large groups in 2007. Before 2007 the cement clinker production capacity of the nationwide top 10 major groups had reached 24% of the total amount of clinker, an increase of 60%.10 According to figures tracked by Digital Cement (website), 11in August 2008 China's cement production reached 887.867 million tons, up 7.35 percent, while clinker production reached 585.986 million tons, an increase of 6.35 percent. According to incomplete statistics, the clinker and cement productions of the top 16 large enterprise groups have accounted for 20% and 26% of the national output, respectively, which demonstrates that the industrial structure has been changing at a rapid rate. Industrial concentration has substantially increased (due to changes in the

9 Qinghao Zhou, Xiangzhong Kong. China annual report of the cement technology in 2007. China Cement, 2008, 02: 34-35. 10 Xiangzhong Kong. The development of China cement and outlook of market. Liaoning Building Materials, 2008,04:6. 11 http://www.dcement.com/Article/200809/68608.html.

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relationship between enterprises due to various mergers and acquisitions, statistics are chronically incomplete, for example, the South Group is not included because the relationship is very complicated. If combined with the South China Cement, the concentration level will increase further.).Changes in industrial structure and increased corporate concentration are bound to influence the market. Judging from the current available information and data, the cost of coal this year has risen substantially, in the transfer of cost; large enterprise groups play a leading role to ensure the normal operation of the industry.

II. Data gaps

In the following calculation, more data is needed. China has a large number of very old facilities, and as such, it is very difficult to collect most of the data demanded. As a result, a big data gap exists in the front.

II.A The proportion of different facilities in every production link

Table 2-1 Data gaps of facilities applied in every production link

Data gaps of facilities exist in every production link. Listed below are the different production

links with appropriate facilities and technologies.

Grinding Technology

- High- efficient cage- shaped separator

- Pre-broken

- Pre-grinding

- End-bed grinding

- Cement grinding aids

Clinker burning technology

- Six pre-heater pre- calciner system

- Short rotary with two supports

- Fourth- generation seamless Cooler

- Refractories

Waste as alternative fuels and raw materials (AFR)

- Materials replaced by waste

- Fuels replaced by waste

Self Generation

- Waste heat cogeneration

General Equipment

- Fan frequency

- Air frequency

- Gas analyzer

- The film of low resistance as a bag filter material

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Electric

- Low-loss energy- saving transformer

- High-performance motor

- Low-voltage motor

- Efficient lighting

In order to know how much more energy can be saved and CO2 be reduced, we have to get the information of every technology or equipment applied in each step of production, that is the proportion of their application, then it is possible to learn about how big the rest part to be improved. Seen from the table above, we can see there is a lot of missing data needed to calculate out the energy saving and emission reduction potentials of every advanced technology.

II.B The energy consumption indicators of kiln types

Table 2-2 Energy consumption indicators of different kilns Fuel types Coal Electricity Gasoline

NSP Wet kiln

Lepol kiln Hollow dry kiln

Other Rotary Kiln Shaft Kiln

For the table above, the data is from 199012. In order to make the results more reasonable, the values of these indicators are assumed to be at the level of 2007. In the later calculation, we make some assumptions according to the technology growth rate to get the current data.

III. Annual BAU estimates of key parameters through 2025

III.A Production/output forecast

China’s per capita GDP in 2020 will be more than four times greater than 2000 per capita GDP according to the Report of 17th Party Congress. China’s GDP growth will slow down after 2008, 13 but the growth rate is high from 2006 to the first half of 2008. The annual growth rate is set to be 10% during 2006 to 2010. Then the growth rate will slow to 8.4% from 2010 to 2015, 7.8% from 2015 to 2020, and 7.0% from 2020 to 2025. Cement sectoral production is projected to be consistent with economic development (till now no quantified research has been done

12 Xiulian Hu, Kejun Jiang. Chinese greenhouse gas emission reduction technology choice and evaluation of the response. China Environmental Science Press. 13 Macroeconomic Research Group of National Development and Reform Commission. Study on the economic development potential and prospects of China in 12th five-year period to 2030. Dynamic Economy, 2008, 03:19-25.

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of the relationship between cement production and GDP, here we apply the elastic coefficient is 1.0), see Table 3-1. The projection trend is shown in Figure 3-1. Table 3-1 China’s GDP and Cement Production Assumptions in the Analysis14

Year 2007 2010 2015 2020 2025 Annual growth rate/% 10 8.4 7.8 7

GDP/billion yuan 24662 32825 49130 71523 100315 Production/billion ton 1.36 1.81 2.71 3.94 5.53

Figure 3-1 Output projection for cement sector in the analysis

III.B Change in industry structure and scale

According to literature15 and interview with experts, the proportion of NSP is projected to reach 70% till 2010, stabilizing at 80% as there still need room for shaft kiln of small scale to exist considering the concrete situation of China. With the technology improvement of shaft kiln, its energy consumption will be lowered to the same level as that of large-scale NSP. The changing trend is as follows: Table 3-2 Change in cement industrial structure and scale (%)

Year 2005 2006 2007 2010 2015 2020 2025 NSP 40.02 46.19 57.75 70.00 80.00 80.00 80.00

Wet kiln 2.62 2.21 1.80 0.60 0.40 0.00 0.00 Lepol kiln 0.32 0.12 0.11 0.08 0.05 0.02 0.00

Hollow dry kiln 1.43 1.30 1.12 0.70 0.00 0.00 0.00 Other Rotary Kiln 4.01 3.34 3.11 2.50 2.00 1.50 0.00

Shaft Kiln 51.61 46.85 36.09 26.12 17.55 18.48 20.00

Note: It is assumed there are no differences in kiln types between BAU and the other scenarios

14 Macroeconomic Research Group of National Development and Reform Commission, 2008 15 Cement industry development plan

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Figure 3-2 Change in cement industrial structure and scale

III.C Energy and fossil fuel consumption (by type) forecast

Based on the relative coal, electricity and gasoline consumptions of every type of kilns, based on the structure forecast above, we can calculate out the energy and fossil fuel consumption (by type) in the future as follows: Table 3-3 Energy consumption baseline scenario (Unit: PJ)

Total Fuel Consumption(PJ) Year

Coal Electricity Gasoline All Fuels

Energy Intensity(GJ/metric

ton)

2005 3862.4 420.5 106.3 4389.2 4.98 2010 7570.1 872.8 215.0 8657.9 4.78 2015 10924.9 1306.4 313.6 12544.9 4.63 2020 15310.2 1901.5 444.4 17656.1 4.48 2025 20951.4 2888.0 650.4 24489.8 4.43

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Figure 3-3 Energy consumption and relative intensity in baseline scenario

III.D CO2 emissions and intensity forecast

As we know the relative fuel consumptions respectively, it is easy to work out the CO2 emissions of every year by CO2 emission factor related to every type of fuel. Table 3-4 CO2 emission for China’s cement sector by fuel type in baseline scenario (MtCO2)

2005 2010 2015 2020 2025 Gasoline 5.2 10.6 15.5 22.0 30.1

Electricity 44.7 92.7 138.9 201.9 283.8 Coal 352.5 691.0 997.1 1397.3 1912.4

Subtotal 402.4 794.3 1151.5 1621.2 2226.3 Process 398.5 774.0 1142.8 1606.3 2197.0 Total 800.9 1568.3 2294.3 3227.5 4423.3

Emission Intensity(kgCO2/kg) 0.909 0.866 0.847 0.818 0.800

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Figure 3-4 CO2 emission by fuel type in baseline scenario and emission intensity

IV. Analysis of the potential mitigation options

IV.A Technologies required and availability

Several technologies and measures exist that can reduce the energy intensity (i.e. the electricity or fuel consumption per unit of output) of the various process stages of cement production. This section provides more detailed estimates on the technologies and measures, their costs, and potential for implementation. Table 4-1 lists the technologies and measures that we consider in our analysis. Below we will describe selected technologies. A complete technical description of all measures is beyond the scope of this report. A summary of the measures evaluated in this report is presented below. Table 4-1 Energy-efficient practices and technologies in China’s cement sector Raw materials preparation (wet process) Raw materials preparation (dry process)

Mechanical transport systems Mechanical transport system

Raw meal blending system

High efficiency roller mills

High efficiency classifiers

Clinker production (wet process) Clinker production (dry process)

Kiln combustion systems Kiln combustion systems

Kiln shell heat loss reduction Kiln shell heat loss reduction Use of waste fuels Use of waste fuels Conversion to grate cooler Conversion to grate cooler

Conversion to semi-wet process Low pressure-drop cyclones

Optimize heat recovery(grate cooler) Heat recovery for power generation

Conversion to precalciner kiln Conversion to multi-stage preheating

Conversion to pre-calciner kiln

Conversion to PH/PC-kiln

Optimize heat recovery(grate cooler)

Finish grinding

Improved grinding media

High-pressure roller press

Roller press/Horomill


General measures

Variable speed drives

High-efficiency motors

Process control systems

Product changes

Blended cement

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IV.A.1 Grinding technologies

The implementation of energy-saving measures in the grinding process is an important part of energy-saving during the cement production. The cement grinding system mainly includes the grinding of raw materials, coal and cement. The energy-saving of grinding system are mainly associated with the following technologies and equipment. High-efficiency classifiers. The separator is the main auxiliary of loop flow milling system. The high efficiency cage-shaped separator is developed based on the first generation of centrifugal separator and the second generation of Tornado separator, to be known as the third generation of the separator. For cement milling, if high efficiency cage-shaped separators replace centrifugal separator system, the output capacity will be increased by 12% to 18%, and the energy consumption will be reduced about 2 to 4kWh/t. If Tornado replacement separators are replaced, the output will increase by a factor of 6% to 10%, and the consumption is to be reduced about 1 to 2kWh/t. For milling raw materials, if centrifugal separators and Tornado separators were replaced, the output can be increased about 10% or 5%, saving around 1kWh/t. However, the fineness of raw materials is rougher than that of the cement, coarse powder election is not the strengths of high efficiency cage-shaped separator. Therefore, energy-saving effects are below those of cement milling. High-efficiency roller mills. In the early stage of the application of roller mill in cement producing, it encountered the problems of strong powder gasification and fast flow in the process of grinding, and therefore it was difficult to form a material bed, which led to mill vibration. The distribution of particle sizes of the cement products was too homogeneous, resulting in a low early intensity, increasing water demand for normal consistency. These problems have been resolved after more than a decade of research. At present, the cement roller mill has entered a substantive development stage, comprising a quarter of the new plants. Cement roller mill has been successful in the production of most general types of cement including ordinary cement, slag, slag cement, ash cement, mixed cement limestone, tuff mixed cement, and fly ash cement. Cement roller mill has substantial energy saving potential compared with ball mill. Take PO42.5 cement as an example, the consumption of ball milli system is about 39 to 41kWh/t, while that of the roller mill system is just about 26 to 28kWh/t, about 32% to be reduced by the roller mill system. Improved grinding media. Cement grinding aids are kinds of high surface active chemicals, which can increase the dispersion of fine particles, so that the fragile nature of particles is strengthened. Therefore, the appropriate addition of grinding aids can increase mill production from 10% to 25%, and lower the power consumption of grinding about 25%, at the same time enhance the strength of cement by 3~5 Mpa, reaching the goal of increasing mixed material proportion. At present, the cement

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additives utilization ratio of North America is 85%, the average ratio worldwide is about 60%, while China's is only about 20%. If the utilization ratio of China's aids is increased from the current 20% to (the world average) 60%, it is possible to reduce electricity consumption equivalent to annual savings of 648,000 tons of standard coal, accumulated to 2,592,000 tons by 2010.

IV.A.2 Clinker burning technologies

Most of the fuel consumption of cement production is used in clinker making. The energy-saving of the firing system are mainly associated with the following technologies and equipment. Conversion to multi-stage preheating. The core function of the pre-calciner system is the use of back-end high-temperature gas and the waste heat from coal combustion to heat the raw materials till they are broken down, thereby preparing them for the post-calcining kiln. Most of China's pre-calciners are 5-step pre-heaters, whose heat emissions can dry 7% of the contained water from its raw materials. For those kilns where the domestic cement raw materials use sandstone as a main ingredient, which has a 3% lower water content, a large amount of pre-heater exhaust heat has not been effectively used before being released to the atmosphere, causing an enormous waste of energy for the entire system. For those kilns the switch to a 1-step pre-heater can still dry 3~5% of the integrated water from its raw materials. At the same time,

assuming the average exhaust heat temperature is reduced by 30 ℃ , the heat

consumption of the system is reduced by at least by 75.3kJ/kg clinker (18kcal/kg clinker). Optimize heat recovery (grate cooler). The ventilation of the fourth-generation grate cooler is changed from horizontal into vertical unit to avoid clinker falling through the grate bed, which would disrupt vertical uniform ventilation, so that the heat recovery efficiency is higher than 74%. If the recovery of heat is calculated by the temperature of the materials, the total heat equals about 1547kJ/kg clinker (370kcal/kg clinker). This represents an increase of 1% of the heat recovery efficiency and will bring 15.5kJ/kg clinker (3.7kcal/kg clinker). Taking into account the corresponding increased secondary air into the kiln after the burner is improved, it is estimated that heat recovery efficiency of the fourth generation material-seamless cooler is about 4 percent higher than that of the existing cooler, equivalent of 62.7kJ / kg clinker (15kcal/kg clinker). Kiln shell heat loss reduction. Fixed equipment accounts for 50% to 40% of the total heat loss, so improving the insulation properties of thermal insulation underlayment and reducing cylinder temperature heat are bound to increase efficiency by reducing heat loss. If the current system can reduce firing cylinder heat loss by 10% the 2500t/d production line will reduce heat loss of about 30.1kJ/kg clinker (7.2kcal/kg clinker), 5000t/d production line reduce heat loss of about 22.2kJ/kg clinker (5.3kcal/kg

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clinker). Use of waste fuels. Cement industry can make use of many different types of alternative fuels. The vast majority of combustible industrial waste and almost all commercial, municipal, agricultural, forestry, livestock waste, as well as part of the family garbage, when combusted, can create heat in the cement kiln system. The use of waste as an alternative fuel in cement kilns must take into account: (a) heat and water levels of waste; (b) hazardous waste content in fuels, and the impact of co-disposal to product quality and the production process; (c) the skill level and management level of cement enterprises. Analyzed from the technical aspect, the addition of alternative fuels into cement kilns is mainly from the front and back-end of the kiln. The sulfur, chlorine, alkali of the waste also has a significant affect on the disposal and use of biological and chemical residues in cement plants. As the disposal of waste is not a major task of cement plants, as is it not the main source of profit for the enterprise, the use of disposed waste as alternative fuels must not affect the normal production of cement on the premise. The proportion of alternative waste fuels depends largely on the heat value and components of alternative fuels into the kiln, energy-saving effect of alternative fuels is mainly determined by the heat value of alternative fuels. The energy-saving levels of different alternative waste fuels are present in Table 4-2. Table 4-2 Energy-saving levels of different waste as alternative fuels

Heat value (kJ/kg)

Typical alternative fuels Fuel alternative

rate Heat value alternative

rate

>23000 Petroleum coke, used tires 100％ 1

18817~23000 Resins, paints 80～100％ 0.95～1

12545～18817 Waste leather, wood

waste

50～80％ 0.87～0.95

8363～12545 Dry sludge, sludge 15～50％ 0.7～0.87

6276～8363 slag, waste catalyst 0～20％ 0.5～0.7

Heat recovery for power generation. At present, Chinese cement enterprises using waste heat do so primarily for power generation. Table 4-3 compares the main parameters of the cement kiln waste heat power generation technology at home and abroad. The main technical and economic indicators of waste heat power station using domestic technology are present in Table 4-4. Table 4-3 Comparison of main technical parameters of waste heat power generation

Indicators Yadong in Ningguo of Sanling Domestic

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Jiangxi (from NKK)

Hailuo (from Chuanqi)

(from Sinoma)

Kiln production(t/d) 4600~4800 5600~5900 6200~6700 5000 Generation capacity(KW) 5900~6100 9100~9700 7800~8100 8000~9200

Generation per ton clinker(kWh)

30.7~31.8 37.0~39.0 27.9~29.0 37.0~42.0

Table 4-4 the main technical and economic indicators of waste heat power station using domestic

technology

The production scale of 5-step pre-heater line (t/d)

2000 2500 4000 5000

Installed capacity of waste heat power generation (MW)

3.0 4.5~6.0 6.0~7.5 7.5~10.0

Generation capacity (MW) 2.5~3.0 3.8~4.5 4.5~6.5 7.2~10.0

Clinker production line

~60% ~60% ~60% ~60% The proportion of power supplied by waste heat power

generation Cement production line

~35% ~35% ~35% ~35%

Payback period (year) ≤3.5 ≤3.5 ≤3.5 ≤3.5

IV.A.3 General measures

Variable speed drives. A large number of fans are used in cement plants. Variations in the production process, working conditions and production will cause the wind and air pressure of the fan to adjust. The use of variable frequency technology to adjust air volume will save energy. At present, low-voltage frequency conversion speed technology and equipment has come into maturity, which should be used in the grate cooler fan and air pumps that need of frequent adjustment. For medium-voltage frequency conversion speed products, although it is a large investment, it has been proven to be effective in saving power, resulting in a payback period of no more than two years. In order to reach energy-saving goal, the frequency conversion speed technology should be applied to all the fans that are needed to regulate the parameters of working condition, such as the cycle fan for raw material mill (roller mill, ball mill), the fan to deal with exhaust ventilation, back-end hot fan, fan for grate cooler ventilation, coal mill system fan, cement roller mill circulation system fan, and the fan for cement powder election. The use of frequency conversion speed technology for large-scale fans will reduce the impact from the frequent launch and shutdown of equipment. With the reduction of the fan speed, the wear from dust to gas blower impeller can be reduced, the performance of existing equipment improved, system reliability and safety and equipment utilization improved, and the life of equipment extended. High-efficiency motors. The new high-efficiency motors are on average 3% more

21

efficient than current Y series motors, with wear and tear reduced by 28%. For cement companies with running times of more than 5000 hours, motors generally run all the year round, and the efficiency directly decides its power consumption. For example, if the efficiency of a 45 kilowatt motor is increased by 1%, the annual power savings can reach 4000 kWh. The potential for power-saving in plants is enormous, and the return from an investment can be recovered in 1-3 years.

IV.B Energy saving and emission reduction potential

Table 4-5 summarizes the assumptions for the potential energy savings and costs for each of the practices and technologies. Table 4-5

Energy savings, costs and carbon dioxide emission reductions for energy efficient practices and

technologies for cement making in China. The energy savings and carbon dioxide savings are

expressed per ton of product.

Option Coal

savings(GJ/t) Electricity

savings(GJ/t) Gasoline

savings(GJ/t)

Carbon dioxide emissions

reductions(kgC/t)

Raw materials preparation (wet

process)

Mechanical transport systems

0 0.01 0.02 0.53

Raw materials preparation (dry

process)

Mechanical transport system

0 0.01 0.02 0.53

Raw meal blending system

0 0.01 0.01 0.26

High efficiency roller mills

0 0.03 0.08 1.85


0 0.01 0.03 0.71

Clinker production (wet process)

Kiln combustion systems

0.2 0 0.24 10.3

Kiln shell heat loss reduction

0.15 0 0.15 6.44

Use of waste fuels 0 0.6 0 20%

Conversion to grate cooler

0.3 -0.01 0.3 13.74

Conversion to semi-wet process

1.26 -0.01 1.21 53.31

22


0.1 0 0.1 4.29


2.8 -0.04 2.69 118.67

Clinker production (dry process)

Kiln combustion systems

0.2 0 0.17 8.8

Kiln shell heat loss reduction

0.2 0 0.15 7.67

Use of waste fuels 0.6 0 0.6 30.7 Conversion to grate

cooler 0.3 -0.01 0.3 16.37

Low pressure-drop cyclones

0 0.01 0.04 0.74

Heat recovery for power generation

0 0.07 0.22 3.68

Conversion to multi-stage preheating

0.9 0 0.9 46.05


0.4 0 0.4 20.46

Conversion to PH/PC-kiln

1.3 0 1.3 66.51


0.1 0 0.1 5.12

Finish grinding Improved grinding

media 0 0.01 0.02 0.32

High-pressure roller press

0 0.03 0.09 1.28

Roller press/Horomill 0 0.1 0.3 4.33 High efficiency

classifiers 0 0.01 0.03 0.48

General measures

Variable speed drives 0 0.03 0.1 1.68

High-efficiency motors 0 0.02 0.06 0.93 Process control

systems 0.18 0.02 0.22 9.91

Product changes

Blended cement 1.53 -0.05 1.36 76.31

In order to calculate the total amount of energy saving and emission reduction potential in 2010, 2015 ,2020 and 2025, we need to know the current situation of the application of facilities and technologies, and then forecast both the BAU scenario and TEC scenario as follows. Table 4-6 Share of production measures applied in cement production (%)

Share of production measure applied (percent)

BAU TEC Option

2010 2015 2020 2025 2010 2015 2020 2025

23

Raw materials preparation (wet process)

Mechanical transport systems 44 50 55 60 46 55 65 75

Raw materials preparation (dry process)

Mechanical transport system 17 25 35 45 19 30 40 50

Raw meal blending system 18 25 35 45 20 30 40 50 High efficiency roller mills 70 77 82 87 72 82 92 100 High efficiency classifiers 68 75 80 85 70 80 90 100 Clinker production (wet

process)

Kiln combustion systems 3 10 15 20 5 15 25 35

Kiln shell heat loss reduction 44 51 56 61 46 56 66 76

Use of waste fuels 18 25 30 35 20 30 40 50

Conversion to grate cooler 4 11 16 21 6 16 26 36 Conversion to semi-wet

process 8 15 20 25 10 20 30 40


71 78 83 88 73 83 93 100


41 48 53 58 43 53 63 73


Kiln combustion systems 4 11 16 21 6 16 26 36 Kiln shell heat loss reduction 15 22 27 32 17 27 37 47

Use of waste fuels 6 13 18 23 8 18 28 38 Conversion to grate cooler 4 11 16 21 6 16 26 36

Low pressure-drop cyclones 29 36 41 46 31 41 51 61 Heat recovery for power

generation 2 9 14 19 4 14 24 34

Conversion to multi-stage preheating 13 20 25 30 15 25 35 45


19 26 31 36 21 31 41 51

Conversion to PH/PC-kiln 6 13 18 23 8 18 28 38 Optimize heat recovery(grate

cooler) 63 70 75 80 65 75 85 95

Finish grinding Improved grinding media 23 30 35 40 25 35 45 55 High-pressure roller press 17 24 29 34 19 29 39 49

Roller press/Horomill 20 27 32 37 22 32 42 52 High efficiency classifiers 38 45 50 55 40 50 60 70

General measures Variable speed drives 22 29 34 39 24 34 44 54

24

High-efficiency motors 48 55 60 65 50 60 70 80 Process control systems 47 54 59 64 49 59 69 79

Product changes Blended cement 27 34 39 44 29 39 49 59

Using data from Table 3-2 and products in every production link (here several factors are used: clinker takes 60% of the final output, and the raw material preparation process deals with 1.18 times of the final cement.), we can work out concrete numbers of the technologies and equipment used in the output of every production link in Table 4-7. Table 4-7 Promotion of production measures in every production link (Mt)16

Promotion of production measures

BAU TEC Option

2010 2015 2020 2025 2010 2015 2020 2025 Raw materials preparation

(wet process)

Mechanical transport systems 6 6 0 0 6 7 0 0

Raw materials preparation (dry process)

Mechanical transport system 361 796 1629 2937 403 955 1862 3264

Raw meal blending system 382 796 1629 2937 425 955 1862 3264

High efficiency roller mills 1486 2452 3816 5679 1529 2611 4282 6528

High efficiency classifiers 1444 2388 3723 5549 1486 2547 4189 6528 Clinker production (wet

process)




Conversion to grate cooler 0 1 0 0 0 1 0 0 Conversion to semi-wet

process 1 1 0 0 1 1 0 0


5 5 0 0 5 5 0 0

Conversion to precalciner kiln 3 3 0 0 3 3 0 0 Clinker production (dry

process)



16 The wet process will be eliminated in the near futures, so all the technologies applied in wet process are eliminated as well, hence why the contribution is zero from 2020 onwards.

25


Conversion to grate cooler 43 178 379 697 65 259 615 1195

Low pressure-drop cyclones 313 583 970 1527 335 664 1207 2025 Heat recovery for power

generation 22 146 331 631 43 227 568 1129

Conversion to multi-stage preheating

42 64 118 199 48 80 166 299


61 83 147 239 67 99 194 339

Conversion to PH/PC-kiln 19 41 85 153 26 57 133 252 Optimize heat recovery(grate

cooler) 680 1133 1775 2655 702 1214 2012 3153

Finish grinding

Improved grinding media 416 813 1380 2213 453 948 1775 3043

High-pressure roller press 308 650 1144 1881 344 786 1538 2711

Roller press/Horomill 362 732 1262 2047 398 867 1657 2877

High efficiency classifiers 688 1219 1972 3043 724 1355 2367 3872

General measures

Variable speed drives 398 786 1341 2157 434 921 1735 2987

High-efficiency motors 869 1490 2367 3596 905 1626 2761 4426

Process control systems 851 1463 2327 3540 887 1599 2721 4370

Product changes

Blended cement 489 921 1538 2434 525 1057 1933 3264

Then according to Table 4-5 and Table 4-7, it is possible to get the results of the energy saving and emission reduction results of every production measure in 2010, 2015, 2020, 2025. Table 4-8

The results of the energy saving and emission reduction effects of production measures in 2010

Options Energy saving(TJ) Carbon dioxide

emissions reductions(tCO2)


Mechanical transport systems 7.69 4821.40 Raw materials preparation (dry

process)

Mechanical transport system 1273.90 798745.63

Raw meal blending system 849.27 391837.48

High efficiency roller mills 4670.98 2788074.37

High efficiency classifiers 1698.54 1070017.73


Kiln combustion systems 57.35 47643.53

Kiln shell heat loss reduction 39.10 29788.77

Use of waste fuels 78.20 925.12

26

Conversion to grate cooler 76.90 63555.55

Conversion to semi-wet process 320.62 246589.98

Optimize heat recovery(grate cooler) 26.07 19843.76

Conversion to pre-calciner kiln 710.31 548918.26






Low pressure-drop cyclones 1079.58 567065.97

Heat recovery for power generation 6261.56 2820003.76

Conversion to multi-stage preheating 11495.24 10437402.93


Conversion to PH/PC-kiln 16604.24 424749.12


Finish grinding

Improved grinding media 1086.10 411163.18

High-pressure roller press 4344.38 1644652.71

Roller press/Horomill 14481.28 5563551.73


General measures

Variable speed drives 4706.42 2158606.68

High-efficiency motors 2896.26 1194942.98

Process control systems 15205.34 12733209.62

Product changes

Blended cement 102817.09 49024784.36

Table 4-9






process)

Mechanical transport system 4776.35 1574754.00

Raw meal blending system 3184.23 41395.02

High efficiency roller mills 17513.28 772521.12






27


Conversion to semi-wet process 799.80 323456.20








Low pressure-drop cyclones 4047.75 1117990.24

Heat recovery for power generation 23476.97 5559734.60

Conversion to multi-stage preheating 28675.65 13690918.41


Conversion to PH/PC-kiln 41420.38 19773788.05


Finish grinding

Improved grinding media 4064.01 808994.50

High-pressure roller press 16256.03 3235978.11

Roller press/Horomill 54186.78 10946707.13


General measures

Variable speed drives 17610.70 4247221.49

High-efficiency motors 10837.36 2351140.21

Process control systems 56896.12 25053549.50

Product changes

Blended cement 384726.16 54255000.58

Table 4-10






process)

Mechanical transport system 6981.21 1497495.04 Raw meal blending system 4654.14 734620.21 High efficiency roller mills 51195.51 10454210.62 High efficiency classifiers 18616.55 4012156.51

Clinker production (wet process) Kiln combustion systems 0.00 0.00


28

Use of waste fuels 0.00 0.00 Conversion to grate cooler 0.00 0.00

Conversion to semi-wet process 0.00 0.00 Optimize heat recovery(grate cooler) 0.00 0.00

Conversion to pre-calciner kiln 0.00 0.00 Clinker production (dry process)

Kiln combustion systems 87560.89 25285493.40 Kiln shell heat loss reduction 82827.87 22038606.18

Use of waste fuels 283981.26 88211891.75 Conversion to grate cooler 139624.12 47036764.43

Low pressure-drop cyclones 11832.55 2126280.13 Heat recovery for power generation 68628.80 10573933.60

Conversion to multi-stage preheating 85194.38 26463567.53 Conversion to pre-calciner kiln 37864.17 11757754.43

Conversion to PH/PC-kiln 123058.54 38221321.96 Optimize heat recovery(grate cooler) 47330.21 14711559.80

Finish grinding Improved grinding media 11832.55 1532454.15 High-pressure roller press 47330.21 6129816.58

Roller press/Horomill 157767.36 20736020.16 General measures

Variable speed drives 51274.39 8045384.26 High-efficiency motors 31553.47 4453694.86 Process control systems 165655.73 47458189.32

Product changes Blended cement 1120148.29 73088484.90

Table 4-11






process)

Mechanical transport system 9791.50 1210882.21 Raw meal blending system 6527.67 594017.80 High efficiency roller mills 93345.66 10989330.22 High efficiency classifiers 39166.01 4866377.67

Clinker production (wet process) Kiln combustion systems 0.00 0.00

29

Kiln shell heat loss reduction 0.00 0.00 Use of waste fuels 0.00 0.00

Conversion to grate cooler 0.00 0.00 Conversion to semi-wet process 0.00 0.00

Optimize heat recovery(grate cooler) 0.00 0.00 Conversion to pre-calciner kiln 0.00 0.00

Clinker production (dry process) Kiln combustion systems 184213.01 30668977.33

Kiln shell heat loss reduction 174255.55 26730802.93 Use of waste fuels 597447.60 85594327.18

Conversion to grate cooler 293745.07 48493577.05 Low pressure-drop cyclones 24893.65 2578982.02

Heat recovery for power generation 144383.17 12825209.65 Conversion to multi-stage preheating 179234.28 32097872.35

Conversion to pre-calciner kiln 79659.68 14261074.33 Conversion to PH/PC-kiln 258893.96 46358947.86

Optimize heat recovery(grate cooler) 99574.60 17843768.77 Finish grinding

Improved grinding media 24893.65 1858726.17 High-pressure roller press 99574.60 7434904.37

Roller press/ Horomill 331915.33 25150885.12 General measures

Variable speed drives 107872.48 9758311.41 High-efficiency motors 66383.07 5401922.15 Process control systems 348511.10 46049934.33

Product changes Blended cement 2356598.88 66487205.03

IV.C Marginal abatement cost curve

Theoretically, the marginal cost for each measure should be calculated by the mitigation effect using data from 2005 as a baseline. All numbers, therefore, are in 2005 dollars. There is no such systemic data strictly compatible with our category of mitigation scenarios, so we find the marginal cost for similar measures in America17,18. Also, we adjust by checking the Chinese cement sector literature of disperse marginal abatement cost data for mitigation measures19. According to our assumptions, there will be no wet process existing for cement production in China after 2020. Therefore, the related technologies for wet process are not included in the mitigation technology list.

17 Nathan Martin, Ernst Worrell, and Lynn Price. Energy Efficiency and Carbon Dioxide Emissions Reduction Opportunities in the U.S. Cement Industry. 1999. 18 Ernst Worrell, Nathan Martin, and Lynn Price. Potentials for energy efficiency improvement in the US cement industry. Energy, 25 (2000):1189–1214. 19 Mason H. Soule, Jeffrey S. Logan, and Todd A.Stewart.Trends. Challenges and opportunities in China’s Cement Industry. 2002.

30

IV.C.1 2010

Figure 4-1 Marginal abatement cost curve of China’s cement sector in 2010

Table 4-12 Cost of mitigation options and relevant emission reduction in 201020

No. Measures

Marginal mitigation cost($/tC

O2)

Total Emission

Reduction(Mt CO2)

Total Cost(million

$)

Cumulative Emission

Reduction(MTCO2e)

Cumulative Net Cost(million $)

Average Cumulative Cost Effectiveness($/tCO2e)

1 Process control

systems -7.7 12.7 -98.3 12.7 -98.3 -7.7

2 Use of waste

fuels(d) -5.3 23.5 -124.2 36.3

-222.5

-6.1

3 Blended cement -3.2 49.0 -158.4 85.3 -

380.9 -4.5

4 Kiln shell heat

loss reduction(d) -1.8 5.9 -10.3 91.2

-391.2

-4.3

5 Kiln shell heat

loss reduction(w)

-0.9 0.0 0.0 91.2 -

391.2 -4.3

6 Optimize heat recovery(grate

cooler)(d) 0.2 3.9 0.9 95.1

-390.3

-4.1


cooler)(w) 0.9 0.0 0.0 95.1

-390.3

-4.1

8 High-efficiency

motors 1.1 1.2 1.3 96.3

-389.0

-4.0

9 Conversion to grate cooler(w)

1.9 0.1 0.1 96.4 -

388.9 -4.0

10 Conversion to

semi-wet process(w)

2.6 0.2 0.6 96.6 -

388.2 -4.0

11 Conversion to grate cooler(d)

3.4 12.5 42.8 109.2 -

345.5 -3.2

20 w=wet process, d=dry process.

31

12 Kiln combustion

systems(w) 4.4 0.0 0.2 109.2

-345.3

-3.2

13 Kiln combustion

systems(d) 5.1 6.7 34.5 116.0

-310.7

-2.7

14 Conversion to PH/PC-kiln(d)

6.0 15.1 90.9 131.0 -

219.8 -1.7

15 Conversion to pre-calciner

kiln(d) 6.9 4.6 31.8 135.7

-188.0

-1.4

16 Conversion to

multi-stage preheating(d)

7.6 10.4 79.3 146.1 -

108.7 -0.7

17 Conversion to

precalciner kiln(w)

8.5 0.5 4.6 146.7 -

104.1 -0.7

18 Roller

press/Horomill 9.3 5.6 51.7 152.2 -52.3 -0.3

19 Variable speed

drives 10.2 2.2 21.9 154.4 -30.4 -0.2

20 Low pressure-

drop cyclones(d) 11.0 0.6 6.2 155.0 -24.2 -0.2

21 Heat recovery

for power generation(d)

11.9 2.8 33.4 157.8 9.3 0.1

22 High efficiency roller mills(d)

12.7 2.8 35.4 160.6 44.7 0.3

23 High-pressure

roller press 14.2 1.6 23.3 162.2 68.0 0.4

24 Improved

grinding media 15.7 0.4 6.4 162.6 74.4 0.5

25 High efficiency classifiers(final)

17.1 0.6 10.6 163.2 85.0 0.5

26 High efficiency classifiers(d)

18.6 1.1 19.9 164.3 104.9 0.6

27 Mechanical transport

systems(w) 20.4 0.0 0.1 164.3 105.0 0.6

28 Mechanical transport system(d)

22.2 0.8 17.7 165.1 122.7 0.7

29 Raw meal blending system(d)

24.6 0.4 9.6 165.5 132.4 0.8

30 Use of waste

fuels(w) 26.8 0.0 0.0 165.5 132.4 0.8

IV.C.2 2015

32



No. Measures


O2)

Total Emission Reduction(Mt CO2)

Total Cost(million $)

Cumulative

Emission Reduction(MTCO2e

)


Average Cumulative Cost

Effectiveness($/tC

O2e)

1 Process control

systems -5.2 25.1 -131.0 25.1 -131.0 -5.2

2 Use of waste

fuels(d) -4.6 34.8 -159.3 59.8 -290.4 -4.9

3 Blended cement -3.4 54.3 -185.0 114.1 -475.4 -4.2

4 Kiln shell heat

loss reduction(d) -2.2 11.6 -26.0 125.7 -501.3 -4.0

5 Kiln shell heat

loss reduction(w)

-1.5 0.0 -0.1 125.7 -501.4 -4.0


cooler)(d) -0.8 7.7 -5.8 133.5 -507.2 -3.8


cooler)(w) 0.0 0.0 0.0 133.5 -507.2 -3.8

8 High-efficiency

motors 0.8 2.4 1.8 135.8 -505.4 -3.7

9 Conversion to grate cooler(w)

1.6 0.1 0.1 135.9 -505.3 -3.7

10 Conversion to

semi-wet process(w)

2.4 0.3 0.8 136.2 -504.5 -3.7


3.2 24.7 78.4 161.0 -426.1 -2.6

12 Kiln combustion

systems(w) 4.0 0.1 0.2 161.0 -425.9 -2.6

21 w=wet process, d=dry process.

33

13 Kiln combustion

systems(d) 4.8 13.3 63.6 174.3 -362.3 -2.1


5.1 19.8 100.6 194.1 -261.7 -1.3


kiln(d) 5.4 6.1 32.8 200.2 -228.8 -1.1

16 Conversion to


5.7 13.7 78.3 213.9 -150.5 -0.7

17 Conversion to

precalciner kiln(w)

6.3 0.7 4.5 214.6 -146.0 -0.7

18 Roller

press/Horomill 6.9 10.9 75.4 225.5 -70.5 -0.3

19 Variable speed

drives 7.5 4.2 31.8 229.8 -38.8 -0.2

20 Low pressure-

drop cyclones(d) 8.1 1.1 9.0 230.9 -29.8 -0.1

21 Heat recovery


8.7 5.6 48.1 236.5 18.3 0.1


9.2 5.5 50.7 242.0 69.1 0.3

23 High-pressure

roller press 10.3 3.2 33.2 245.2 102.2 0.4

24 Improved

grinding media 11.3 0.8 9.1 246.0 111.3 0.5

25 High efficiency classifiers(final)

12.3 1.2 14.9 247.2 126.3 0.5


13.3 2.1 28.1 249.3 154.3 0.6

27 Mechanical transport

systems(w) 15.2 0.0 0.1 249.3 154.4 0.6


17.1 1.6 26.9 250.9 181.3 0.7


19.3 0.8 14.9 251.7 196.3 0.8

30 Use of waste

fuels(w) 21.7 0.0 0.0 251.7 196.3 0.8

IV.C.3 2020

34



No. Measures


O2)

Total Emission Reductio

n(Mt CO2)


Cumulative

Emission Reduction(MTCO2

e)

Cumulative Net

Cost(million $)

Average Cumulativ

e Cost Effectiveness($/tCO2

e)

1 Use of waste

fuels(d) -3.8 88.2 -330.8 88.2 -330.8 -3.8

2 Blended cement -3.1 73.1 -226.6 161.3 -557.4 -3.5

3 Process control

systems -2.4 47.5 -115.8 208.8 -673.2 -3.2

4 Kiln shell heat loss

reduction(d) -1.9 22.0 -41.7 230.8 -714.8 -3.1


-0.3 47.0 -14.6 277.8 -729.4 -2.6

6 High-efficiency

motors 0.2 4.5 1.0 282.3 -728.4 -2.6


cooler)(d) 1.5 14.7 22.1 297.0 -706.4 -2.4

8 Conversion to


3.8 26.5 100.3 323.5 -606.1 -1.9

9 Kiln combustion

systems(d) 4.3 25.3 107.7 348.7 -498.3 -1.4

10 Variable speed

drives 4.7 8.0 38.1 356.8 -460.3 -1.3

11 Heat recovery for

power generation(d)

5.2 10.6 55.1 367.4 -405.2 -1.1


5.7 38.2 216.7 405.6 -188.5 -0.5

13 High-pressure 6.1 6.1 37.6 411.7 -150.8 -0.4

22 Wet process is eliminated out in the cement production in the future.

35

roller press


6.6 10.5 68.9 422.2 -82.0 -0.2

15 Roller

press/Horomill 7.8 20.7 162.2 442.9 80.2 0.2

16 Conversion to pre-

calciner kiln(d) 8.4 11.8 99.2 454.7 179.4 0.4

17 Improved grinding

media 9.1 1.5 13.9 456.2 193.3 0.4


10.4 4.0 41.6 460.2 234.9 0.5

19 Low pressure-drop

cyclones(d) 11.2 2.1 23.8 462.3 258.7 0.6

20 Mechanical

transport system(d) 12.7 1.5 19.0 463.8 277.7 0.6

21 Raw meal blending

system(d) 13.8 0.7 10.1 464.6 287.8 0.6

IV.C.4 2025



No. Measures Marginal mitigation

cost($/tCO2)

Total Emission

Reduction(Mt CO2)


Cumulative Emission

Reduction(MTCO2e)

Cumulative Net

Cost(million

$)

Average Cumulativ

e Cost Effectiveness($/tCO2e

)

1 Blended cement

-3.3 66.5 -217.6 66.5 -217.6 -3.3

2 Use of waste

fuels(d) -3.3 85.6 -278.4 152.1 -496.0 -3.3

3 Kiln shell heat loss

reduction(d) -2.4 26.7 -64.3 178.8 -560.3 -3.1

23 Wet process is eliminated out in the cement production in the future.

36

4 Process control systems

-1.7 46.0 -76.1 224.9 -636.4 -2.8

5 Conversion to

grate cooler(d)

-0.3 48.5 -14.0 273.4 -650.4 -2.4

6 High-

efficiency motors

0.2 5.4 0.8 278.8 -649.6 -2.3

7 Optimize heat recovery(grate cooler)(d)

1.7 17.8 30.1 296.6 -619.5 -2.1

8 Conversion to


2.9 32.1 91.6 328.7 -527.9 -1.6

9 Variable

speed drives 3.5 9.8 34.0 338.5 -493.9 -1.5

10 Heat recovery


3.8 12.8 48.8 351.3 -445.1 -1.3

11 Kiln

combustion systems(d)

4.0 30.7 122.0 382.0 -323.1 -0.8

12 High-pressure

roller press 4.4 7.4 33.0 389.4 -290.2 -0.7

13 Conversion to

PH/PC-kiln(d)

4.8 46.4 221.9 435.7 -68.3 -0.2

14 High

efficiency roller mills(d)

4.8 11.0 52.6 446.7 -15.6 0.0

15 Roller

press/Horomill

5.8 25.2 145.7 471.9 130.1 0.3

16 Improved grinding media

6.5 1.9 12.1 473.7 142.2 0.3


kiln(d) 6.6 14.3 94.7 488.0 236.9 0.5

18 High

efficiency classifiers(d)

7.4 4.9 36.1 492.9 273.0 0.6

19 Low

pressure-drop cyclones(d)

8.2 2.6 21.1 495.5 294.1 0.6


9.8 1.2 11.8 496.7 306.0 0.6


10.8 0.6 6.4 497.3 312.4 0.6

IV.D Analysis of mitigation scenarios

IV.D.1 Scenario description

37

� Scenario 1 Implementation of all mitigation measures with a net negative MARGINAL cost, plus some positive MARGINAL cost measures up to a certain cost (approximately $10 per ton). � Scenario 2 Implementation of all mitigation measures along the cost curve until the TOTAL cost (net present value over the lifetime) of all measures combined adds up to zero. � Scenario 3 The maximum potential reduction-implementation of all mitigation options at all cost levels. The next two scenarios are based on the national target of energy consumption reduction per unit of GDP. It is 20% lower in 2010 compared with that in 2005. Here, we assume from 2010 to 2025, the energy consumption per unit of GDP is reduced by 20%, so the emission is reduced by the same amount. Also, we assume the elasticity between cement production and GDP growth is 0.5. The emission reduction amount in the target years as follows: Table 4-16 Emission reduction of target years

Year 2010 2015 2020 2025 Emission reduction

amount(MtCO2) 162.51 248.72 446.71 473.11

� Scenario 4 Implementation of all mitigation measures (including those in S1 or S2) up to a specified higher cost level (above those in S1 or S2). The decision of how high to go reflects the emission reductions target. � Scenario 5 implementation of all mitigation measures (including those in S1 or S2) up to a specified higher cost level, plus implementation of some select very high cost measures that require transfer of advanced technology or training (to simulate the effect of the international Technology and Financial Assistance Package). The difference between these two scenarios is that in S4 we go along the cost curve and do not skip any measures, but in S5 we “jump up” to the advanced technologies.

IV.D.2 Results

� Scenario 1: Negative cost options Table 4-17 Emission reduction and cost results of S1

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Year Cumulative Emission Reduction(MTCO2e)


2010 91.2 -391.2 2015 133.5 -507.2 2020 277.8 -729.4 2025 273.4 -650.4

� Scenario 2 All options with a net cumulative total cost of 0$ Table 4-18 Emission reduction and cost results of S2



2010 157.8 9.3 2015 236.5 18.3 2020 442.9 80.2 2025 446.7 -15.6

It is not possible to find the exact combination of technologies to meet the target of zero cumulative net cost, we just select the measures that give a total cost closest to zero. � Scenario 3 All cost options Table 4-19 Emission reduction and cost results of S3



2010 165.5 132.4 2015 251.7 196.3 2020 464.6 287.8 2025 497.3 312.4

� Scenario 4 Achieves 20% target level with marginal options cost of less than 9$/

tCO2 Table 4-20 Emission reduction and cost results of S4

Year Emission Reduction

Target(MTCO2e) Cumulative Emission Reduction (MTCO2e)

Cumulative Net Cost (million $)

2010 162.51 162.6 74.4 2015 248.72 249.3 154.3 2020 446.71 454.7 179.4 2025 473.11 473.7 142.2

� Scenario 5 Options with a marginal cost of 10$/ tCO2 or less Table 4-21 Emission reduction and cost results of S5

Year Emission Reduction Target(MTCO2e) Cumulative Net Cost(million $)

2010 152.2 -52.3

2015 225.5 -70.5

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2020 460.2 234.9

2025 492.9 273

IV.E Barriers

IV.E.1 Policy barriers

China has excessive types of taxes for waste heat cogeneration. At present, the power generation sector is set up as an independent entity, for example, after power generation, the plants have to pay a 17% value-added tax, a 33% income tax, as well as a 3% sales tax, a 5% urban construction tax, an education surcharge, and so on. The taxes add up to the point the plants feel like they are hard to afford.

IV.E.2 Market barriers

At present, plants that self produce power and are connected to the grid run into obstacles. For cement plants, the power from waste heat cogeneration must be first connected to the grid, and bought back from the grid for use. The resulting charges have no consistent country wide standards, however they are generally very high. Many provinces require power companies to pay an occupation fee for grid utilizing resources, and the power sector of some districts even limits the amount of power generated from waste heat cogeneration plants are allowed to add to the grid, which is a clear obstacle to the promotion of waste heat cogeneration technology. In China, the implementation of the "polluter pays" principle affects the formation of social and professional waste operations. At present, the cement companies who carry engage in waste replacement are all experiencing difficultly, due to the fact that they must look for waste, transportation, storage and pretreatment themselves. The establishment and operation of such a system requires a process, and, given the difficulties companies are experiencing combined with the late start, China has not really started work in a social, professional and market-oriented operation.

IV.E.3 Financial barriers

Due to the rapid development of the cement industry in recent years, the current national regulation is very conservative on industrial development, resulting in difficulty of procuring loans for many companies lack necessary capital. Because of financial and market pressures, they still prefer to expand production capacity and market share, however, a number of cement enterprises mainly depend on bank loans in order to expand production capacity, yet the asset liability ratio makes it more difficult for them to obtain loans from banks to invest in energy efficiency projects. For example, the transformation of a 600 ton per day cement production line, concrete

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product development projects in Taihang Cement Company, and an aerated concrete brick project in 531 cement plants all could not start on time because of lack of funds. Take waste heat cogeneration as an example: it has a very high fixed investment in the early period, which usually accounts for 15% of the total investment of cement enterprises. Many enterprises in debt already find it more difficult to obtain bank loans, making these enterprises unable to move forward with desired waste heat cogeneration projects. For cement kilns burning garbage, waste pretreatment centers must be established to retreat the waste before it enters the cement kiln. The cost of pretreatment is generally high. Generally, even if cement enterprises can afford the costs of constructing the pretreatment centers and the ensuing pretreatment, the cost and the capital risk for cement companies are too high.

IV.E.4 Technical barriers

Garbage must be sorted before it is burned in these advanced cement kilns.. Foreign municipal solid waste is classified and controlled at the source point, which favors the use of waste in the cement production system. Our country's municipal solid waste is mixed waste without classification and control, which increases the difficulty of utilizing it in a cement production system. China's municipal solid waste is also of poor quality, as kitchen waste comprises a large part of the total waste which causes non-standard waste for incineration in cement kilns. In addition, technology in China is still in its exploratory stage, and there are many technical issues that still need attention, such as the control of chlorine and heavy metal elements, high demand of waste heat value, requirements for technology and equipment, such as special means of transportation, closed storage and the feeding device.

V. Impact on international trade

In 2006, China's exports of cement reached its highest point in history, but the growth rate slowed. Since July 1st in 2007, when the state abolished the export tax rebates, total exports of cement had declined. In 2007 total exports of cement and cement clinker reached 33 million tons, with a 8.6 percent decline from the previous year. China's economic development has driven the cement industry to the verge of increasing, attracting domestic and foreign industrial capital and financial capital. For example, the world's largest cement company, CEMEX, announced early in 2007 that, after the completion of the merger with the Group of Britain RCM Group, intends to put the focus of foreign export markets on China and India, in order to deal with the

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rapid rise of prices of the world's raw materials. 24 With the enhancement of the international competitiveness of China's cement equipment, the production technology and equipment of China's cement industry can not only meet the needs of domestic construction projects, but is also garnering an increased amount of international market share. At present, Chinese cement technology and equipment exports account for 20% of the international market. General contracting projects of large-scale cement production lines have particularly attracted international attention of the cement industry. According to statistics, in 2005 and the first half of 2006 only, the amount of contracts which had been signed totaled more than 2.5 billion dollars, with projects scattered throughout France, Italy, Saudi Arabia, United Arab Emirates, Pakistan, Spain, Vietnam, Tunisia, Iran, Albania, Turkey, Oman, Laos, etc., more than 20 countries. The largest-scale contracting project of the cement production reached 10,000 tons.25

VI. Potential government and private sector policies to

implement mitigation options and sectoral programs

A. Continue to promote structural adjustment. The cement industry is supposed to implement the restructuring mandate issued by the State Council, as well as the spirit of the mandate issued by the NDRC and the relevant ministries, “Views on speeding up the restructuring of the cement industry.” The industry should do a good job of overall control, and resolutely put an end to blind expansion of production capacity. The operation of new cement capacity expansion projects must adhere to differential treatment policy. For areas with a lower proportion of NSP, facilities must continue to support their elimination relying on the development, in order to speed up structural adjustment. For provinces with a high proportion of NSP and more projects constructed, the proposed projects must be strictly controlled, encouraging them to develop and implement cross-regional development strategies. The local governments regulating new projects should help enterprises implement fair phase outs of outdated production capacity. This year, they must develop and release the cement industry access. At the same time, according to the released access, they must also implement specific notice management for the cement industry as soon as possible.

B. Increase the work of backward out. The NDRC promulgated a formal

announcement of outdated cement enterprises (line) list to be closed in 2007, and asked local governments to check the implementation of the requirements around. For enterprises that violate the commitment of elimination, their cement

24 Lili Shen, Zuoyi Liu. the competitive environment and development of China's cement industry. China Building

Materials, 2008, 08:48-54. 25 Fang Fang. The current state and prospect of China’s cement equipment. China Building Materials, 2006, 12:50.

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production license will not be renewed. At the same time, the industry must increase the enforcement of differential price, environmental protection and law measures, stop a variety of tax incentives including the duty-free policy for comprehensive utilization of resources. The elimination of outdated production capacity should be systematically carried out so as to avoid market fluctuations in prices and the emergence of gap.

C. Support large-scale enterprises (group) to accelerate development. Supporting

the development of large enterprise groups and accelerating the advancement of industrial concentration is an important structural adjustment policy. Large enterprises should make good use of the state’s support policies, seize the opportunity to do solid work to speed up the development and be bigger and stronger. In order to better play the role of key state enterprises, based on the development and restructuring situation of 60 large enterprises in the past two years, they must make the appropriate adjustments in the list of large companies.

D. Develop circular economy. Develop waste heat cogeneration projects and

projects with co-processing, industrial waste, garbage utilization technology in cement production, make use of resources and energy scientifically and rationally. This will not only help cement companies to absorb external price rising factors, to achieve better economic efficiency, and also can be effective in promoting energy saving and emission reduction goals.

E. Research on the establishment of the mechanism for the elimination of backward

production capacity. On one hand, make good use of the policies of incentives and subsidies for the elimination of outdated production capacity by the central government according to the energy-saving and emission reduction requirements by State Council. In accordance with the requirements of the government work report in the 11th National People's Congress, speed up to establish a mechanism of outdated production capacity withdrawing from the market.26

VII. Observations

VII.A Popular use of low-grade cement resulting in serious waste of resources

Chinese standards concerning the physical strength of cement is very similar to European standards such as ENV197-1-95 and the British Standard Portland Cement BS12-91. On November 9th, 2007, China promulgated the General Portland Cement standard, which has operated since June 1st, 2008. The biggest breakthrough of this standard has been canceling P.O32.5 cement in the original cement standard As a 26 Guixin Lv. The development trend of cement industry-2007 Review and 2008 Outlook. China Cement, 2008, 05: 19-21.

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result, the minimum strength of all of the ordinary Portland cement produced by China in the future must reach the national standard of 42.5. In China, low-end cement products are much in demand. Some cement companies pursue low-cost products, so they blend a large number of mixed materials. This creates a situation in which cement of 32.5 as a low-end products, is a larger proportion of all the ordinary cement products. In 2006, ordinary Portland cement P.O32.5 accounted for 41% of the total output of cement in the country. At present, concrete grade standards in China are low, most of which are C20 and C30, while most abroad are C50 and C60. The low-grade concrete standards result in the application of high-grade cement blocked. The low-grade cement also has a relatively low intensity As a result, when low-grade cement is used for concrete preparation, in order to achieve the same strength of concrete, more cement is required, which wastes a great deal of cement, resulting in excessive energy consumption. The durability of such concrete is also relatively poor, creating concrete buildings also of poor quality, resulting in frequent maintenance and waste of resources.

VII.B Weak comparability of the integrated energy consumption of varieties of cement

The addition of mixed materials can reduce the energy consumption of cement. There are varieties of cement in China, causing a large difference in mixed material proportion between different varieties of cement, so the energy consumption of all varieties of cement is not comparable. It is not reasonable to compare the energy consumption of cement in China with that abroad, as the products in foreign countries utilize the clinker from China.

VII.C Production affected by coal of low-quality

China's cement industry is primarily based on coal. The bituminous coal is used in rotary kilns, and anthracite in shaft kilns, with certain performance requirements of the quality of coal. With technological advances in recent years, low-volatile coal and anthracite can be also used for rotary kiln in calcining clinker. From a quality perspective, there is a gap between coal in China and foreign countries. In recent years, the quality of coal used in the cement industry is getting worse and worse: in the performance of the low calorific value of the original coal and high ash contents. When such coal is applied, it will have an adverse impact on the quality of clinker due to the low flame temperature in the kilns. The production of the kiln system will be greatly reduced. When large flue gas is generated by the coal combustion, the heat consumption of the system will be substantially increased. This raises a higher demand for China's cement production equipment. At present, Chinese cement manufacturers resolve this issue by expanding the size of the furnace (usually 1.1 times magnification) in order to ensure product quality reaching the relative

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standards.

VII.D Self-solving the surplus labor force generated from structure adjustment

Under the combined action of the market mechanism and related policies in the cement industry, the restructuring of the cement industry has made certain achievements. The proportion of NSP cement production with advanced technologies has continued to rise, reaching about 55% in 2007, while the shaft kilns with outdated technology has accounted for 39%. The labor productivity of NSP increased 5-6 times more than shaft kilns. As a result, the structural adjustment of the cement industry makes the total demand for labor decline. However, the surplus labor force arising from the improved degree of automation is handled generally by expanding the size of cement plants.

VII.E Different education levels of labor in enterprises of different scales

For China's cement industry, in general, the plant-level leadership has a higher education level than secondary and professional skills. For enterprises of different sizes, the education level of the labor force in large-scale enterprises is generally higher than that in small-scale enterprises. From the human resources of Anhui Conch Group who is the top Chinese cement enterprise in recent years, we can see: the increase in personnel over the years, the largest proportion of which is production staff, accounting for more than 70%. The percentage of personnel who have received higher education also increases over the years, from 53.7% in 2004 to 56.6% in 2006 (present in Table 7-1 below). Table 7-1 The human resources of Anhui Conch Group in recent years

Professional staff Education

Year In-

service personnel

Production staff

Sales Technicians Finance

staff Executives

The number of

people receiving medium and high education

The number of

people with a college

education

2004 13296 9526 9526 2416 296 548 4122 3558

2005 14677 10369 10369 2812 341 590 4634 3776

2006 16685 12008 565 3109 294 643 4799 3674

Data source: http://www.conch.cn/sm2111111216.asp

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