HeidelbergCement AG
plans to tap into carbon capture and storage to turn one of its cement plants into what it says will be the world’s first carbon-neutral site for cement production, in an effort to help lower the cement industry’s high carbon footprint.
The German cement maker said Wednesday that it will build a carbon-capture facility next to its Swedish plant in Slite that will allow it to capture up to 1.8 million metric tons of carbon dioxide a year, equivalent to the plant’s total emissions. The company also intends to increase the use of greener fuels such as biomass, it said.
Reducing carbon dioxide emissions is particularly challenging for cement companies. In the manufacturing process of cement, carbon dioxide is produced as a result of the fossil fuels used to warm kilns and from the calcination of limestone, which releases the gas once it reaches a high temperature. Calcination is the process of heating a material to a high temperature, ensuring it doesn’t melt.
In order to meet the goals of the Paris climate accord and avoid the rising costs of polluting due to increasing regulation, academics and equity analysts say the cement industry needs to accelerate the adoption of carbon-capture-and-storage technology.
The carbon-capture project at the Slite cement plant, which the company expects to be fully operational by 2030, is HeidelbergCement’s second large-scale carbon-capture facility. The company is building another carbon-capture plant in Brevik, Norway, that will enable it to capture 400,000 metric tons of carbon dioxide a year from 2024.
The experience with carbon capture gained at Brevik will help the company plan for the plant in Slite, HeidelbergCement Northern Europe General Manager Giv Brantenberg said in prepared remarks.
The announcement comes as high-emitting industrial companies, under increasing pressure from regulators and investors, work to boost their sustainability credentials by slashing emissions.
Mexican company
Cemex SAB de CV
said in March that it will invest $25 million to make a British cement plant run on low-emission fuels such as hydrogen. Franco-Swiss building-materials company
LafargeHolcim,
trading as Holcim Ltd., is using alternative fuels to heat its kilns, tapping into recycled materials to produce green cement and piloting 20 carbon-capture projects.
Equity and credit analysts say the main challenge for cement companies will come between 2030 and the midcentury, as most countries have set 2050 as the deadline to achieve net-zero greenhouse-gas emissions. Cement companies operate with very low profit margins and will have to deal with high costs to decarbonize their businesses.
“While the impact of carbon reduction on their credit quality will be minimal in the next few years, the costs associated with the tougher future regulation could put profitability and cash flow at risk, particularly for cement makers,” said Vitali Morgovski, a credit analyst at Moody’s Investors Service.
Mr. Morgovski said building-materials makers like LafargeHolcim, HeidelbergCement and Ireland-based
CRH
PLC need to intensify their efforts to cut their carbon dioxide emissions as they may fall short of the European Union’s proposed climate goal of a 55% reduction by 2030.
Write to Maitane Sardon at maitane.sardon@wsj.com
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