{"id":13917,"date":"2016-11-04T18:00:15","date_gmt":"2016-11-04T22:00:15","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/increasing-sustainability-in-cement-production-and-construction-sector\/"},"modified":"2016-11-04T18:01:59","modified_gmt":"2016-11-04T22:01:59","slug":"increasing-sustainability-in-cement-production-and-construction-sector","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/increasing-sustainability-in-cement-production-and-construction-sector\/","title":{"rendered":"Increasing Sustainability in Cement Production and Construction Sector"},"content":{"rendered":"

Changing Landscape of Cement Industry in Light of Climate Change <\/u><\/strong><\/p>\n

The continued expansion of global economies leads to a rising demand for construction materials. Driven by increasing cement consumption, the global production of cement is projected to grow to over 5 billion tonnes worldwide by 2030[1]<\/sup><\/a>. This has a profound impact on the overall level of greenhouse gas emissions, as the production of each tonne of cement results in emissions of roughly 0. 9 tonnes of carbon dioxide (CO2).<\/p>\n

Given the carbon-intensive nature of business, cement manufacturers are under the increasing pressure to modify their business strategies and production process to foster a long-term, sustainable environment. Governments around the world are making a concerted effort to encourage such change, as highlighted in the Paris Agreement on Climate Change in December 2015, in which 179 countries and the EU pledged to keep global temperature increase well below 2C by significantly reducing emission of greenhouse gases[2]<\/a>. The scrutiny of public eyes on cement manufacturing process and strict government regulations on CO2 emissions globally will likely impact the overall direction of business planning and growth strategies of cement manufacturers.<\/p>\n

\"l1\"<\/a><\/p>\n

 <\/p>\n

LafargeHolcim \u2013 Strong Advocate of Sustainability and Leader to Set New Standards \u00a0<\/u><\/strong><\/p>\n

LafargeHolcim, the largest cement manufacturer in the world, is an excellent example of a responsible player who embraces these principles and uses sustainability as a driver for differentiation and growth. The company has recently rolled out its Sustainability Strategy \u2013 the 2030 Plan \u2013 which defines the next required steps for the company to follow. Through this plan, the Company seeks to encourage the entire construction sector to play its part in addressing the issue of climate change and focus on shared value creation for the company, society, communities, and the environment[3]<\/a>.<\/p>\n

Figure 1: Outline of the LafargeHolcim 2030 Plan<\/p>\n

\"l3\"<\/a><\/p>\n

Based on the above, LafargeHolcim has actively implemented changes in its business model to increase its operational efficiency and make the cement production process more sustainable. As a result, the company has become the most carbon-efficient cement company among international peers. For example, according to the company, its cements contains an average of 71% clinker, and net CO2 emissions per tonne of cement in 2015 were 573Kg\/tonne, a reduction of 26% against the 1990 benchmark.<\/p>\n

There are three major operational levers the company has pulled to achieve such outcome: replacement of clinker with alternative mineral components, increased use of waster-derived fuels, and investment in energy efficiency.<\/p>\n

Production of clinker, a major ingredient needed to produce cement, accounts for the majority of emissions from cement, and therefore reducing the amount of clinker in blended cements can have a significant impact on CO2 emissions intensity[4]<\/a>. LafargeHolcim, through its proprietary research and years of testing, successfully identified alternative mineral components and decreased clinker intensity by 15% since 1990. LafargeHolcim plans to utilize innovative clinker types and develop new low CO2 binders with a potential CO2 reduction of 30-70%.<\/p>\n

The Company also increased its use of alternative fuels and decreased usage of coal and petcoke, two of the most carbon-intensive fuels. LafareHolcim currently uses socially responsible biomass from agricultural waste that does not compete with food production. While the Company has increased its use of biomass waste fuels more than six times over the past 25 years, it aims to double its current offer of waste treatment solutions in the medium term.<\/p>\n

Furthermore, LafargeHolcim has invested in modification of its least energy-efficient production facilities to increase energy efficiency. By changing the plant design through careful planning and capital expenditure, the company improved thermal and electric efficiency, achieving 22% reduction of thermal consumption and decreasing both operating costs and greenhouse gas emissions.<\/p>\n

 <\/p>\n

How to Tackle Challenges Ahead <\/u><\/strong><\/p>\n

Despite LafargeHolcim\u2019s success in increasing energy efficiency and making its production process more sustainable from emissions standpoint, the company is facing challenging circumstances as it approached the limits in many of the known improvement levers. While the company can strive to extract more improvement potential from the existing levers, it should also focus on finding new channels of improvement and start building an ecosystem that can guide the entire value chain in the direction towards sustainability and efficiency.<\/p>\n

That said, the company, as part of its ongoing effort, has established the LafargeHolcim Foundation for Sustainable Construction, designed to promote collaboration across all fronts of the construction industry. The endeavor has brought various players together to provide pragmatic solutions and establish sustainable industry best practices. LafargeHolcim should continue to raise awareness of the climate change challenge and work with the whole value chain to maintain the positive momentum in the right direction. (Word count: 789)<\/p>\n

[1]<\/a> European Cement Association<\/p>\n

[2]<\/a> World Economic Forum (https:\/\/www.weforum.org\/agenda\/2016\/09\/what-is-the-paris-agreement-on-climate-change\/<\/a>)<\/p>\n

[3]<\/a> LafargeHolcim Sustainability Report 2015<\/p>\n

[4]<\/a> \u201cHow to Turn Around the Trend of Cement Related Emissions into the Developing World\u201d \u2013 WWF International<\/p>\n","protected":false},"excerpt":{"rendered":"

LafargeHolcim: Endeavor to Transform Cement Manufacturing Business and Promote Sustainability in Construction Sector <\/p>\n","protected":false},"author":2603,"featured_media":13994,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-13917","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/climate-change-challenge-2016\/","yoast_head":"\nIncreasing Sustainability in Cement Production and Construction Sector - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/increasing-sustainability-in-cement-production-and-construction-sector\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Increasing Sustainability in Cement Production and Construction Sector - 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