Appendix 5: Actions Needed in Different Countries/Regions
The scale of its market, the materials it has available locally and its role as an innovator give it a unique position to bring new, low-carbon cement and concrete technologies to maturity.
Although consumption is slowing, China will continue to be the largest cement consumer globally in the short term. Rapid urbanization is driving continued expansion of the construction sector – particularly in the western parts of the country as economic growth in coastal regions stabilizes.
The cement market is maturing fast, with rapid consolidation and industrialization being promoted by the central government. Cement standards and supervision have been improved, leading to efficiency gains. China already has a clinker ratio of 0.57, and this is expected to further decrease to 0.55 by 2060. However, China lags behind Europe on the use of alternative fuels.
China is also a major hub for innovation. Chinese companies and institutions make up the majority of patent assignees in our dataset. China is one of the few markets in which belite clinkers have been used in large infrastructure projects. It could also be a leader in digital disruption in the construction sector, with digital technologies already transforming a number of other sectors in the country. Chinese contractors spend almost three times as much as European contractors on R&D.
The Chinese government is a major procurer of construction materials and services, both domestically and overseas, through its Belt and Road Initiative. Approximately 20 per cent of all construction spending goes to public-works projects. The main market players include a large number of collective and state-owned companies.
The impacts of climate change on China are likely to be higher than for most countries in the northern hemisphere. Projections suggest an increase in flooding in southern provinces and water scarcity in northern provinces, with major knock-on effects for the construction sector both in terms of what needs to be built and what can be built.
- High short-term availability of fly ash and blast furnace slag;
- Large stockpiles of bauxite waste;
- An abundant volume of clays appropriate for calcining; but
- Limited availability of timber for construction.
Key priorities for China could include:
- Scaling up clinker substitution with fly ash and blast furnace slag and the use of sustainable alternative fuels through targeted regulation, investment in distribution infrastructure and best-practice dissemination. This is especially needed in western parts of the country, where resources are currently underutilized and construction is on the rise.
- Holding large-scale demonstration projects and pilots for clinker substitution using calcined clays from clay stockpiles to establish the potential of this technology, integrating stakeholders along the supply chain.
- Building on experience using belite clinkers in major infrastructure projects, to support the use of novel cements and concretes in smaller projects by sharing lessons and best practice with construction firms and material suppliers.
- Establishing technology cooperation agreements on low-carbon cement and concrete with Belt and Road participant countries and establishing targets for use of lower-carbon building materials in infrastructure projects funded as part of the Belt and Road Initiative.
- As part of market consolidation, supporting more mature firms in adopting the best available technology and in applying and disseminating best practice on lower-carbon cement and concrete production throughout the sector.
- Setting public procurement standards on the use of BIM, and establishing a focused technology partnership with the UK to share lessons on best-practice BIM implementation.
With the majority of major multinational cement producers headquartered in the region, and with a long track record of policy action on cement sustainability and ambitious target-setting on the built environment, Europe is a key agenda-setter for the global market.
Overcapacity in the European cement sector and a highly industrialized market mean that existing kiln facilities are capable of meeting future demand for cement. European cement producers are some of the most advanced in terms of their use of alternative fuels, benefiting from advantageous regulatory support, but are behind India and China on energy efficiency.
Europe has a fairly established housing stock, with the majority of housing in many regions stemming from the reconstruction period (1946–70) that followed the Second World War. Although Europe’s building floor area is not expected to rise as much as in other regions, poor housing conditions in a number of European countries suggest that existing stocks could benefit from retrofit measures.
Europe has a history of progressive policies and market interest in establishing a more sustainable construction sector. It has the highest number of zero-carbon buildings. In France and Austria, zero-energy and positive-energy houses represent a growing share of new construction. Public procurement has been a key policy lever in the region.
Europe has strong agenda-setting power in the sector. The largest multinational cement-producing companies are headquartered in Europe, and the region’s standards and building codes are often followed in other locations. It also has a strong track record on policy and regulation in the cement sector.
The construction workforce in Europe is ageing, and the sector is already facing a serious skills shortage. These factors risk slowing down digital disruption and the efficiency gains that this might otherwise bring.
- Limited supplies of good-quality fly ash and blast furnace slag;
- Stockpiles of waste fly ash and blast furnace slag; and
- Abundant supplies of volcanic rocks and ash in parts of Greece and Italy.
Key priorities for the EU, European governments and/or other stakeholders could include:
- Addressing overcapacity by phasing out old and inefficient cement production infrastructure.
- Setting ambitious retrofit, reuse and recycling targets for the construction sector in the European Union Circular Economy Package, building on guidelines being developed for sorting, processing and recycling different construction and demolition waste streams.
- Building on ambitious targets on energy efficiency for buildings, as set out in the Energy Performance of Buildings Directive, to set targets for embodied energy and carbon for new-builds. These should build on the Level(s) guidelines and indicators for office and residential buildings currently being tested.
- Increasing public funding for R&D and financial support for incubation facilities and demonstration projects with novel and low-clinker cements, specifically exploring the scale-up potential for volcanic rocks and ash in southern Europe. This could draw on the new innovation fund to support the deployment of breakthrough technologies as part of the EU ETS.
- Providing training to address the digital skills gap in the construction, cement and concrete sectors – with a view both to retaining and improving the quality of jobs, and to co-developing and building up the stack of digital tools needed in the construction and material-supply value chains.
- Communicating long-term infrastructure plans and policies that set low-carbon and climate-resilient priorities for public procurement.
As a fast-growing cement market with increasing vulnerability to climate impacts, India has a key role to play in establishing the baseline for effective climate-smart infrastructure, urban planning and decision-making.
India is already the world’s second-biggest cement market. With the country’s rapid urbanization and urgent infrastructure needs, this consumption is set to increase. The floor area in India is expected to double by 2035. Accommodating a growing low-income urban population will require rapidly scalable collective housing, water, sewage, transport and social-service solutions.
These trends and needs suggest a substantial number of new cement plants will be built. These will replace older, less-efficient plants and contribute to the sector’s energy efficiency, which, according to the data available, is already higher than in Europe, the US and China. India is also expected to reach an ambitious clinker ratio of 0.50 by 2060.
The government has enacted a number of policies that focus on energy efficiency in buildings. Commercial buildings have been included in the Perform, Achieve and Trade programme – a market-based energy efficiency certificate trading scheme. India’s agreed Nationally Determined Contribution (NDC) under its Paris Agreement commitments was one of the few to recognize the potential that buildings play in helping a country achieve emissions reduction targets.
With 30 per cent of GDP spent on public procurement, the public sector could be a key driver of consumption of lower-carbon building materials. Reducing corruption and enhancing transparency and competitiveness are key challenges to overcome.
India is in a strong position to capitalize on digital disruption in the construction sector, as information and communication technology systems evolve. However, India does not crop up as a major patent hub in our dataset.
Across India, cities and infrastructure must already regularly contend with climate-related disasters, including floods and droughts. There is a growing need for high-performance buildings and construction, and for provisions to be made for climate resilience in urban planning.
- High fly-ash and granulated-slag availability in the short to medium term;
- Large deposits of bauxite waste; and
- A shortage of gypsum.
Key priorities for India could include:
- Developing an industrial policy to expand indigenous innovation capacities around low-carbon construction processes and products. Establishing a focused technological partnership for the cement industry between companies, universities, research institutes and government to specifically address the issue of research, development and deployment of lower-carbon building materials.
- Supporting firms in promoting more industrial use of cements, in concert with growth and consolidation in the sector. Firms also need to be given support in acquiring the best available technology, best practice and experience.
- Scaling up the use of fly ash and blast furnace slag, currently underutilized in many Indian states. This could be promoted through best-practice dissemination and training, better access to data on local material availability, and reductions in VAT on high-blend cements and concretes. In the longer term, preparing for the phasing out of coal by exploring the use of alternative clinker substitutes such as calcined clays.
- Developing climate-resilient infrastructure and city plans. Establishing a city-level working group to share examples of best practice in climate-resilient urban planning, design and construction processes from different cities. The working group could also encourage joint scenario and investment planning exercises between cities on how to respond to long-term environmental trends.
- Establishing a national framework for sustainable or green public procurement for construction. This could consist of providing training, tools and technical knowledge to procurers, in order to professionalize and enhance existing processes and to make clear and verifiable information on the environmental footprint and performance of products and services in the construction sector available so that these indicators are mainstreamed.
As a prime location for technology and business model innovation in the past, and as the location of major construction clients, the US could be at the forefront of digital shifts in the built environment.
The US has one of the largest infrastructure investment deficits – reflecting the gap between the infrastructure needed and financing available – in the G20. Inadequate investment in transport networks has left ageing roads, railways and waterways at risk of disruption. President Donald Trump initially promised a trillion-dollar boost to infrastructure spending. Plans announced in early 2018, however, lacked detail and suggest that the federal contribution will remain too low to turn this trend around.
The US is the fourth-largest cement consumer after China, India and the EU. The US lags behind other major producers in terms of energy efficiency and its clinker ratio, which was 0.86 in 2015. However, the latter may reflect a difference in industry practices – in the US, clinker substitutes tend to be blended with cement at the point of concrete production rather than blended into cement.
Some of the world’s largest technology and logistics companies locate a bulk of their operations in the US. Walmart, Amazon, Alphabet and Apple are becoming major construction product and service consumers. A growing number of these companies are setting sustainability targets for their construction projects. Apple’s new headquarters, for example, has unique concrete slabs that act as structural features as well as serving as part of the natural air-conditioning system for the building; during construction, efforts were made to recycle concrete rubble on site.
Some US states and cities are taking a lead on green construction. California has adopted an energy goal of net-zero emissions for all new residential construction by 2020 and all new commercial construction by 2030.
Sustainable-building certification systems such as the Leadership on Energy and Environmental Design (LEED) system and ENERGYSTAR have seen considerable uptake in the US. The construction industry views green construction as a business opportunity.
The US has been at the forefront of many of the major digital disruptions and business model shifts in recent years. This innovative and disruptive potential is reflected in the cement sector, with almost 10 per cent of patents in our dataset owned by US companies and academic institutions, the second-highest share after China.
The US has:
- A shortage of fly ash and blast furnace slag in the medium to long term; and
- An abundant supply of volcanic rocks and ash in parts of the west coast states.
Key priorities for the US at the state and federal level could include:
- Providing education and advice to major corporate clients and those that advise them – i.e. to architects, engineers, contractors and sustainability consultants – on how material selection can affect the carbon footprint of their projects, and on the digital tools that can transform material-selection processes.
- Working with universities, construction companies and digital providers to host open innovation platforms for exploring the potential for digital technologies to transform processes in the built environment; and to help build the stack of digital solutions needed to integrate real-time decision-making tools, supply chain optimization and lesson-sharing from experience with new materials and blends.
- Facilitating coordination among US cities on tendering for similar infrastructure projects to achieve the necessary scale for material suppliers to provide lower-carbon solutions. In 2017, a total of 402 US mayors committed to act in support of the goals set forth in the Paris Agreement. These commitments could be expanded to focus on the potential for emissions savings from climate-smart procurement and construction. Cities could partner up to share best practice for building design and construction.
- Supporting the trialling of volcanic rocks and ash as clinker substitutes at scale in California, capitalizing on local material availability and potential demand for lower-carbon concrete in the state.