The Policy Needed for Change

Over the last several decades, domestic cement and concrete manufacturers have invested hundreds of millions of dollars to increase the energy, materials, and emissions efficiency of their plants. These investments have generated significant reductions in the energy and emissions intensity of the industry, but more will be needed to achieve the industry’s 2050 ambition. While there are opportunities for short-term improvement at some facilities, more research is needed to accelerate the development and deployment of innovative and cost-effective emissions technologies to support CCUS, innovative manufacturing technologies, low-carbon alternative raw materials, innovative construction methods, and new testing and analytical methods. Advancing this research at the pace needed to meet key reduction goals will require support from the federal government through government research and funding for industry and other efforts.

Project permitting and facility regulations can pose significant barriers to investment and adoption of carbon reduction technologies, even where such technologies and practices are quite mature. Three common examples include EPA’s New Source Review regulations, which impose onerous air permitting requirements on facility energy efficiency and modernization projects; EPA’s Non-Hazardous Secondary Materials (NHSM) rule, which restricts the use of plastic, tires, and other low-carbon fuel alternatives at cement kilns; and EPA’s CCR beneficial use rule, which limits storage of CCRs used as low-carbon feedstocks in clinker, cement, and concrete. For CCUS implementation, new projects will have to navigate federal and state air, water, waste, and land-use requirements, creating uncertainty as to the time and resource constraints associated with permits. Permitting rules can also discourage critical investments in infrastructure needed to switch plants from coal to natural gas and other alternative fuels, expand the use of renewable energy and storage at industrial facilities, build a national low emissions vehicle charging network, or site CCUS transportation and storage infrastructure. These limits affect major reduction pathways across the industry’s Roadmap, making regulatory modernization a necessity.

Where emissions reduction options do exist for the cement and concrete industry, policymakers can expedite their adoption by formally recognizing and encouraging their use and benefits. For example, PLC and low-carbon blended cements and concretes using CCRs and other secondary cementious materials have lower embodied carbon profiles while offering comparable if not superior performance to other cement and concrete types. Non-recycled plastics, paper, fibers, and fabrics are excellent lower-carbon substitutes for coal – a fact illustrated by the higher utilization rates in European Union countries. By using these materials as fuels and feedstocks, cement plants not only reduce their products’ emissions intensity, they provide valuable environmental and community benefits, diverting or recovering industrial secondary materials from land disposal and creating new markets for secondary material collection and recycling. Finished concrete and concrete aggregate act as carbon sinks over the useful life and end-of-life phases of concrete projects. These benefits are often overlooked by federal and state policy makers, reducing public awareness, skewing life cycle analyses, and discouraging short-term reduction opportunities.

Misinformation and lack of awareness about the risks and benefits of cement manufacturing and materials technology can create community opposition to improvements that benefit surrounding communities through fewer environmental releases, waste diversion and reduced land-disposal, and associated public health and environmental impacts. These considerations are particularly important as policymakers assess options for promoting environmental justice and economic recovery. Policymakers and regulators can help reduce opposition resulting from misinformation through environmental justice and public education programs, as well as programs like EPA’s National Recycling Strategy.

PCA believes that market-based carbon pricing can encourage both conventional and breakthrough technologies to reduce CO2 emissions at the lowest cost and could accelerate the path toward carbon neutrality. There are two widely recognized market-based mechanisms that impose a price on carbon – emissions trading systems – also known as cap-and-trade (C&T) – and a carbon tax. Both mechanisms, if well-designed, incentivize the private sector through financial mechanisms to reduce greenhouse gas emissions and invest in sustainable technology innovation, leading to meaningful and cost-effective carbon reduction. Of these mechanisms, a C&T system is preferable as it directly targets abatement, setting an emissions cap aligned to emission reduction goals where the cap diminishes over time. This system creates a market price which allows gradual reductions in hard to abate sectors by allowing them to take advantage of existing levers, while simultaneously investing in innovation and technologies to ensure long-term reduction solutions.

Government policies can pave the way for alternative raw materials, blends, admixtures, finished low-carbon building materials, and construction practices, but such advances will only pay dividends if the market accepts and adopts these innovations. In the past, institutional inertia and risk aversion have discouraged the uptake of many currently-available materials and building practices – limiting the market for both current building solutions and new innovations. Government can promote increased market acceptance by leading the way through government procurement, and by providing guidance and supporting materials that recognize and encourage the use of these alternatives.

While lower-carbon cement and concrete materials have been available for some time, the markets for these materials have been, in some cases, limited by overly restrictive or arbitrarily prescriptive procurement policies in both the private and public sector. By transitioning to performance-based material and design standards, policymakers can increase the market for currently available high-performance, lower carbon products like PLC, fly ash cement and concrete, and other SCMs and admixtures.

Where policymakers adopt procurement policies to incentivize “sustainable” products and materials, they should mandate “whole-building” or “project life cycle analysis” to ensure that government purchasing also considers the impact of material selection on emissions from use, maintenance, repair, replacement, useful life, and end-of-life management of materials and structures. This distinction between the embodied carbon (cradle-to-gate) analyses contained in environmental product declarations and full life cycle (cradle-to-cradle) analysis is particularly important.

Many of the most significant emissions reduction levers available to the industrial sector will require significant new investments in energy, transportation, and carbon reduction infrastructure. Switching from coal to natural gas-fueled kilns will require expanded natural gas capacity and delivery for industrial use. Increasing the use of NHSMs as fuel will require increased secondary material recovery, collection, processing, and distribution. Switching from fossil-fuel generated electricity to distributed renewable generation will require grid, transmission, and distribution upgrades and investment in battery storage. Transitioning industrial fleets to low emissions vehicles (LEVs) will require charging sites and supporting infrastructure. Implementing CCUS will require a national network of CO2 pipelines to connect generators to use and sequestration sites, particularly outside of traditional oil and gas corridors. All of these will require government support and incentives, particularly during the initial stages of implementation while markets are developing.

In developing a comprehensive carbon reduction strategy for the U.S. cement and concrete industry, both manufacturers and policymakers face an unfortunate reality: cement manufacturing is a highly energy intensive, trade exposed industry. Clinker and cement are commodity materials in an increasingly global marketplace. Whether price increases arise from carbon taxes or caps, new industrial or material standards, or CCUS capital and operating costs, climate policies that target domestic producers alone risk undermining the competitiveness of the U.S. cement and concrete industry. Indeed, one PCA analysis suggests that a mere $20 price on carbon could increase imports significantly if not accompanied by trade remedies to maintain a level playing field. Federal climate policies and procurement programs must take these market dynamics into account or risk destroying the U.S. cement and concrete industry and associated employment base while offshoring cement and concrete manufacturing emissions to other less regulated countries.