The world’s go-to building material is among its worst climate offenders. What can we do to reduce its negative impact?

Fourteen billion cubic meters.  That’s how much cement we produce every year.[1]  By 2050, it will be 20 billion.[2]

Whether used directly, or turned into concrete, our most consumed human resource is everywhere – from apartments, offices, and schools, to bridges, roads and hospitals.  It’s also one of the biggest contributors to climate change, with concrete alone accounting for 7% of global CO2 emissions.[3]

Cement and concrete are prime targets for limiting global warming to 1.5 degrees Celsius.  The good news is innovative and improved solutions are appearing, including carbon capture, utilization, and storage (CCUS), recycling, and the use of alternative materials.  However, huge investment, incentives, regulation, and coordination hurdles lie ahead.

The future is not set (yet).

Hard graft

Cement production is expected to increase to meet growing global demand.[4]  However, the Global Cement and Concrete Association (GCCA) has called for complete decarbonization by 2050 – with a 20% reduction in CO2 per metric ton of cement and a 25% reduction in CO2 per cubic meter of concrete by 2030 (compared to 2020 levels).[5]

According to the MSCI Sustainability Institute, the cement industry would need to reduce its revenue-based emissions intensity by an average of 7.2% annually between 2023 and 2050 to become carbon neutral by 2100 as per the Network for Greening the Financial System (NGFS) ‘2 degrees Celsius’ scenario.[6]  This conflicts with the industry’s pledged emission reductions (see below).

Projections assume that technologies required to decarbonize the industry at scale will not achieve technological readiness or cost parity with incumbent solutions any time soon.[7]

As of August 2023, over one third of concrete producers have declared net-zero or carbon-neutral targets.[8]  Thus far, however, only two producers – Cemex and Holcim – have set targets validated by the Science Based Target Initiative (SBTi) that would align with net-zero by 2050 and the 1.5⁰C pathway.[9]

More ways to cut more emissions

Until 2030, the most significant gains will come from more efficient and effective use of concrete, cement, and clinker.  After that, CCUS is likely to play a more prominent role.

There are no silver bullets.  Reducing CO2 from concrete and cement will take multiple, coordinated efforts across the supply chain.  As the graphic below indicates, at current rates, 98 gigatons (Gt) of CO2 will be emitted from the concrete and cement industry between 2022 and 2050 – twice as much as the sector can afford to help meet global 1.5⁰C pathway  targets.[10]

Although long-term solutions are critical, emerging decarbonizing technology could deliver a much steeper decrease in emissions in this decade, by around 40% by 2030, according to some estimates.[11]

Let’s unpack the available interventions.

Use less concrete and cement

An obvious start.  The industry should recycle more concrete and use more recycled materials to produce it (as we’ll explore below).  Reusable concrete modules, which can be broken down or incorporated into new structures, are proving popular in Nordic countries.[12]

Also, only build if you have to.  Many buildings can be repurposed, such as converting warehouses into social housing.  Experts at the World Economic Forum estimate that applying circular solutions for cement and concrete by 2050 could avoid or mitigate around 2.6 billion metric tons of CO2 emissions.[13]

Add more admixtures

Admixtures can make concrete easier to work with and longer-lasting, reducing quantities and costs.  They can also make concrete easier to recycle.  According to the World Economic Forum, admixtures could reduce concrete’s CO2 emissions by up to 30% under current standards and up to 50% under updated standards.[14]  More people must learn about admixtures’ decarbonization potential or how to adapt their concrete mixes accordingly.[15]

Improve logistics and access to infrastructure

Concrete and cement are heavy, low-margin commodities, typically making them too expensive to transport long distances.  Individual plants need easy access to raw materials, low-carbon energy sources, carbon capture infrastructure, and more efficient supply chains.[16]  However, it’s unlikely that all these solutions will be feasible, so the problem must ultimately be solved at the local level.

Decarbonize production with alternative fuels

One-third of the emissions from a typical cement plant come from burning coal, petroleum coke, and other fossil fuels to heat kilns.[17]  Electrifying kilns with renewable electricity will help; high-heat plasma torches powered by renewable energy show promise.[18]  Meanwhile, switching to biomass and waste-based alternatives such as sewage sludge can reduce total emissions by up to an estimated 17%.[19]  There is already a strong use-case for this approach.  In 2022, Cemex completed a UK facility that runs on 100% alternative fuels.[20]  In the same year, Holcim reported powering 28% of its thermal energy demand with alternative fuels and aims to hit 50% by 2030.[21]  According to the MSCI Sustainability Institute, alternative fuels could lower emissions far below the cement industry’s stated targets and, owing to their affordability could reduce long-term emissions significantly faster than the current net-zero by 2100 pathway.[22]  Producers are also developing proprietary waste-recycling businesses that target the use of industrial and municipal waste in their kilns.[23]

Cut the clinker

Concrete’s affordability, versatility, and durability are greatly influenced by the binding capacity of clinker.  Clinker is one of the key ingredients of concrete, made from a mixture of limestone and minerals.  Unfortunately, it is produced by roasting limestone to over 2,552 degrees Fahrenheit in kilns, emitting around 622 kilograms of CO2 for every metric ton of cement produced.[24]  Clinker itself accounts for around 90% of the emissions released in cement production.[25]  Two approaches could roughly halve clinker’s carbon footprint: avoid using it or decarbonize production through carbon capture:[26]

Amp up the SCMs

Clinker can be substituted for less emissions-intensive materials such as fly ash, metal slag, recycled concrete, or calcined clay, which are known as supplementary cementitious materials (SCMs).[27]  Fly ash and ground and granulated blast furnace slag (GGBS) are byproducts of burning coal and iron-making, respectively.  Both offer an efficient way to use waste products while avoiding clinker production.[28]  Ironically, these materials will dry up as coal power fades out and steel production becomes greener.  Fortunately, there are other options.  Calcined clay is a naturally occurring material found worldwide and is abundant in the Global South, where cement demand is peaking.  Some estimates indicate that if calcined clay became the go-to for cement, it could reduce the sector’s emissions by 30–40%.[29]  SCMs currently comprise around 15% of global cement production, but estimates suggest they could increase to 30%–50%.[30]

Ask the algorithms

Machine learning and control technologies are enabling emerging companies to optimize cement quality while incorporating low-carbon alternatives.  US green cement start-up Alcemy reported lowering CO2 by up to 50% while improving quality by scaling solutions across Europe and the US.[31]  Other start-ups like Fero Labs and AlCrete are helping to optimize cement and concrete production in real-time to enable lower CO2 mixes.[32]

Capture the carbon

Clinker can be decarbonized by holding onto the CO2 emitted during production.  CCUS has the largest emissions-saving potential of all options, accounting for 35%–50% of emissions savings across all scenarios in the Mission Possible Partnership (MPP) report, Making Net Zero Concrete and Cement Possible.[33]  In theory, CCUS could even produce clinker with net-zero emissions.  However, CCUS is relatively new, expensive, and can be energy and water intensive.  If low concentrations of CO2 are emitted (around 15%–20%), a lot of energy is needed to enrich them to proper levels.[34]

Due to its high price tag, CCUS has mostly been confined to larger players and those with access to storage capacity and uses for captured carbon, such as industries that use mineralized carbon, government support, and affordable renewable energy.[35]  In some places, incumbents are exploring retrofits to add CCUS.[36]  CO2 can also be stored in concrete aggregates when construction and demolition waste is recycled.[37]

Strategically built megaplants in areas with access to plentiful cheap renewable energy and supportive regulation, such as the US and Europe, could reduce the production cost of lower-carbon clinker by up to 60%.

Transporting, storing, and using captured carbon presents challenges, particularly for the Global South.  Although CCUS is vital to decarbonization, the industry must avoid overreliance on this underdeveloped technology while research, development, investment, and regulation catch up.  To navigate the pathway to decarbonization, a balanced, evolving approach, incorporating the above solutions as they become feasible, is necessary.

More money, regulation, and cooperation

Reaching net zero by 2050 requires a portfolio of policy and financial instruments to create an enabling environment for innovation and decarbonization.[38]  As RMI points out, “The year 2050 is just one investment cycle away, given the industry’s long-lasting capital assets.”[39]  The industry must act now to ensure major new investments are net-zero compatible.

The MPP Concrete and Cement Sector Transition Strategy[40] is a roadmap charting a decades-long journey for achieving net-zero in cement and concrete – requiring substantial technology, finance, and policy interventions.  Near-term actions required from industry, government, and finance stakeholders include:

  • Green public and private procurement programs to aggregate demand for low-carbon concrete and cement
  • Performance-based concrete and cement standards supported by robust testing measures
  • Carbon markets. China and India, the two largest cement producers in the world, have both announced plans to include the cement sector in national emission trading schemes
  • Fiscal incentives for pilot projects. For example, the Office of Clean Energy Demonstrations (OCED) under the US Department of Energy is providing US$ 6.3 billion to support accelerated industrial decarbonization actions[41]
  • Emission target setting and reporting under frameworks such as the Science Based Targets Initiative (SBTi)
  • Clear market regulations for CCUS to ensure a stable and investable market environment
  • Shared carbon management and clean energy infrastructure in industrial hubs. MPP is currently supporting the deployment of two clean industrial hubs in Los Angeles, California, and Houston, Texas, in the United States

Splash the cash

According to the World Economic Forum, annual spending must almost double to US$ 60 billion to achieve net-zero emissions by 2050.[42]  And that’s just immediate cement and concrete production—carbon capture equipment at cement plants alone will require US$ 390 billion.[43]  As the Making Net Zero Concrete and Cement Possible report estimates:

“The total investment, including […] in-sector investment, CCUS transport and storage facilities, hydrogen infrastructure, and clean electricity generation, will increase by 35% from US$ 1.05 trillion to US$ 1.42 trillion, driven by the construction of capital-intensive clean energy and carbon capture infrastructure.”[44]

Emerging technologies and more efficient logistics and production could offset some of the bill – but there’s no way around it: decarbonizing cement and concrete carries a hefty price tag.[45]

Currently, the limited supply of lower-carbon cement means sustainably produced products can command higher prices from customers, but so-called green premiums are expected to decline as production takes off.[46]

New financial strategies are required

Cement and concrete industry stakeholders at the World Economic Forum Annual Meeting 2023 in Davos expressed “enthusiasm but uncertainty regarding how best to invest in cement and concrete value chains,” according to event hosts McKinsey.[47]

Finding and backing the right technology is critical.  As with decarbonizing the built environment, McKinsey asserts that “the industry must reconsider its approach to mobilizing capital and move away from large green-transition funds, which are insufficient in scale and not easily defined in scope.”[48]

Rather than focusing on acquiring large, publicly listed companies, attendees recommended a project finance approach sensitive to the whole value chain, including investments in start-ups to accelerate the next phase of technology development and scale up investment as and when the right tech emerges—while continuing to invest CCUS and broader established green technology and circular economy principles.[49]

How can governments help?

The private sector can’t do this alone.  Public funds and regulatory levers must underpin the transition:

Revamp building codes

While existing building codes prioritize safety and reliability, they must also adapt to support new technologies and greener materials.  For example, most building codes require Ordinary Portland Cement (OPC), which requires clinker.  Many markets limit the amount of SCMs (e.g., the EU limits fly ash to 35%, and the United States limits it to 40%).  New standards could be reevaluated to include cement with more SCMs and different SCMs, such as calcined clay, limestone, and recycled, which costs little more.  This will require coordinated action from policymakers and the private sector to evolve industry norms.[50]

Likewise, supportive regulations and standards will be necessary to transition to circular solutions.

Progress is happening.  For example, California’s Senate Bill 596, signed into law in 2021, directs the cement industry to develop and implement a strategy to deploy low-carbon solutions to reduce CO2 emissions by 40% below 1990 levels by 2035.[51]

Create public procurement targets and tax incentives for near-zero cement

Governments need to send more demand signals.  They are certainly well placed to do so: public-funded infrastructure accounts for 40%–60% of global concrete sales.[52]

France, for example, is developing a policy to reduce cement emissions by 50% across the cement industry between 2021 and 2030.[53]  Japan has released a similar roadmap and Canada is co-leading the Breakthrough Agenda on Cement and Concrete.[54],[55]  China, which produces more than half the world’s cement, will extend its emissions trading scheme to include the cement sector from 2023 or 2024 onwards.[56]  Similarly, the EU Innovation Fund supports industry decarbonization in Europe by funding innovative technologies.[57]

Capture CCUS funds

CCUS, in particular, needs government support.  It costs up to US$ 170 to remove and store one metric ton of CO2 from cement production, an unsustainable cost when one considers that concrete typically costs US$ 50-60 per metric ton to produce in Europe.[58],[59]

Norway is leading the way here, co-investing with Heidelberg Materials to construct the world’s first industrial-scale carbon capture facility at a cement plant—due to be fully operational in late 2024.[60]  Meanwhile, the United States’ Inflation Reduction Act offers a tax credit of up to US$ 85 per metric ton of carbon dioxide captured and stored.[61]  Other governments could follow suit and make getting permits to build CCUS plants easier.

Specifying near-zero carbon cement

The World Economic Forum’s First Movers Coalition (FMC) is focused on bringing together companies to target “hardest-to-abate” industrial sectors responsible for a third of the world’s emissions.[62]  The FMC states that coalition members, from construction and engineering firms to developers and architects, must commit to purchasing or specifying near-zero-emission cement for at least 10% of their annual volumes by 2030.[63]

Vattenfall, a state-owned Swedish energy company and founding member of the FMC, is enthusiastically exploring transformative zero-emissions cement technologies.  It anticipates long-term demand, increasingly sustainable public tenders, and a first-mover advantage that will exceed the upfront costs.[64]  The business takes heart from the increasing demand for fossil-free steel among Swedish suppliers, despite a 20%–25% premium, and anticipates similar demand for near-zero cement, not least for renewable energy infrastructure, which is expected to quadruple by 2030.[65]

Cementing collaboration

Cement and concrete value chains can include multiple partners between customers and materials suppliers, including architects and designers, construction companies, logistics companies, and various others.  Introducing recycled materials into the cement value chain might require collaboration among as many as 15 parties, many of whom don’t typically interact with each other.[66]  A proper circular economy will require coordinated efforts to ensure that the right materials (and waste) reach the right players.

Cement production and waste recycling are highly localized industries, so efficiencies must occur where clinker is produced and used, with global coordination to make broader supply chains work.[67]  This is tricky for cement producers, many of which operate on an international scale.  The FMC is supporting producers to create transparent, fully aligned value chains to help partners work together across multiple specialties and geographies and send powerful demand signals while spreading the cost of the green premium.  Broader green construction initiatives, such as McKinsey’s Net Zero Built Environment Council, should also help facilitate cement and concrete’s transition to a global circular economy.[68]

Can we construct a world without concrete?

A world without concrete is not yet a realistic goal.  But we can create cement and concrete with dramatically reduced carbon footprints.  The construction industry already accounts for 25% of global greenhouse gas (GHG) emissions and a significant portion of the 40% of global emissions from fuel combustion.[69]  It makes sense to prioritize its favorite materials—and biggest single culprits—for radical change.

 

[1] https://gccassociation.org/concretefuture/societal-demand-for-cement-and-concrete/

[2] https://gccassociation.org/concretefuture/societal-demand-for-cement-and-concrete/

[3] https://missionpossiblepartnership.org/action-sectors/concrete-cement/

[4] https://www.msci-institute.com/insights/concrete-steps-for-speeding-the-decarbonization-of-cement/

[5] https://gccassociation.org/concretefuture/

[6] https://www.msci-institute.com/insights/concrete-steps-for-speeding-the-decarbonization-of-cement/

[7] https://www.msci-institute.com/insights/concrete-steps-for-speeding-the-decarbonization-of-cement/

[8] https://www.msci-institute.com/insights/concrete-steps-for-speeding-the-decarbonization-of-cement/

[9] https://www.msci-institute.com/insights/concrete-steps-for-speeding-the-decarbonization-of-cement/

[10] https://rmi.org/five-insights-on-the-concrete-and-cement-industrys-transition-to-net-zero/

[11] https://www.msci-institute.com/insights/concrete-steps-for-speeding-the-decarbonization-of-cement/

[12] https://www.sintef.no/en/latest-news/2023/new-concrete-from-old-buildings

[13] https://www.weforum.org/agenda/2023/01/concrete-cement-circularity

[14] https://www.weforum.org/agenda/2023/10/new-technologies-decarbonizing-cement-production/

[15] https://www.weforum.org/agenda/2023/10/new-technologies-decarbonizing-cement-production/

[16] https://rmi.org/five-insights-on-the-concrete-and-cement-industrys-transition-to-net-zero/

[17] https://www.msci-institute.com/insights/concrete-steps-for-speeding-the-decarbonization-of-cement/

[18] https://www.sciencedirect.com/science/article/pii/S0959652623030718

[19] https://www.msci-institute.com/insights/concrete-steps-for-speeding-the-decarbonization-of-cement/

[20] https://www.cemex.co.uk/-/rugby-cement-plant-welcomes-uk-energy-minister-to-explore-opportunities-for-decarbonisation

[21] https://www.holcim.com/who-we-are/our-stories/decarbonizing-holcim-alternative-fuels

[22] https://www.msci-institute.com/insights/concrete-steps-for-speeding-the-decarbonization-of-cement/

[23] https://www.mckinsey.com/industries/engineering-construction-and-building-materials/our-insights/decarbonizing-cement-and-concrete-value-chains-takeaways-from-davos#/

[24] https://www.constructionnews.co.uk/sustainability/carbon-cementing-net-zero-22-11-2021/

[25] https://www.mckinsey.com/capabilities/sustainability/our-insights/spotting-green-business-opportunities-in-a-surging-net-zero-world/transition-to-net-zero/cement

[26] https://www.greenbiz.com/article/how-decarbonize-concrete-and-build-better-future

[27] https://www.mckinsey.com/industries/engineering-construction-and-building-materials/our-insights/decarbonizing-cement-and-concrete-value-chains-takeaways-from-davos#/

[28] https://www.greenbiz.com/article/how-decarbonize-concrete-and-build-better-future

[29] https://lc3.ch/why-lc3/

[30] https://www.msci-institute.com/insights/concrete-steps-for-speeding-the-decarbonization-of-cement/

[31] https://www.aenu.com/insights/why-we-invested-in-alcemy/

[32] https://www.forbes.com/sites/jimvinoski/2023/06/21/this-startup-is-using-ai-to-reduce-emissions-in-hard-to-mitigate-industries/

[33] https://missionpossiblepartnership.org/industry-comes-together-around-real-world-roadmap-towards-net-zero-emissions-in-concrete-cement/

[34] https://www.greenbiz.com/article/how-decarbonize-concrete-and-build-better-future

[35] https://www.weforum.org/agenda/2023/10/new-technologies-decarbonizing-cement-production/

[36] https://www.mckinsey.com/industries/engineering-construction-and-building-materials/our-insights/cementing-your-lead-the-cement-industry-in-the-net-zero-transition

[37] https://www.weforum.org/agenda/2022/11/circularity-a-key-enabler-to-reach-net-zero-in-concrete-and-cement/

[38] https://rmi.org/five-insights-on-the-concrete-and-cement-industrys-transition-to-net-zero/

[39] https://rmi.org/five-insights-on-the-concrete-and-cement-industrys-transition-to-net-zero/

[40] https://www.missionpossiblepartnership.org/making-net-zero-concrete-and-cement-possible-report/

[41] https://www.energy.gov/oced/industrial-demonstrations-program-0

[42] https://www.weforum.org/agenda/2023/10/new-technologies-decarbonizing-cement-production/

[43] https://missionpossiblepartnership.org/industry-comes-together-around-real-world-roadmap-towards-net-zero-emissions-in-concrete-cement/

[44] https://missionpossiblepartnership.org/industry-comes-together-around-real-world-roadmap-towards-net-zero-emissions-in-concrete-cement/

[45] https://missionpossiblepartnership.org/industry-comes-together-around-real-world-roadmap-towards-net-zero-emissions-in-concrete-cement/

[46] https://www.weforum.org/agenda/2023/10/new-technologies-decarbonizing-cement-production/

[47] https://www.mckinsey.com/industries/engineering-construction-and-building-materials/our-insights/decarbonizing-cement-and-concrete-value-chains-takeaways-from-davos#/

[48] https://www.mckinsey.com/industries/engineering-construction-and-building-materials/our-insights/decarbonizing-cement-and-concrete-value-chains-takeaways-from-davos#/

[49] https://www.mckinsey.com/industries/engineering-construction-and-building-materials/our-insights/decarbonizing-cement-and-concrete-value-chains-takeaways-from-davos#/

[50] https://www.greenbiz.com/article/how-decarbonize-concrete-and-build-better-future

[51] https://www.msci-institute.com/insights/concrete-steps-for-speeding-the-decarbonization-of-cement/

[52] https://www.weforum.org/agenda/2022/08/6-countries-taking-action-to-solve-concretes-emissions-problems

[53] https://www.globalcement.com/news/item/15783-france-ciment-to-reduce-co2-emissions-by-50-by-2030

[54] https://www.meti.go.jp/policy/energy_environment/global_warming/transition/transition_finance_technology_roadmap_cement_jpn.pdf

[55] https://www.canada.ca/en/innovation-science-economic-development/news/2022/11/government-of-canada-and-cement-association-of-canada-launch-roadmap-to-net-zero-carbon-concrete-by-2050.html

[56] https://www.asiafinancial.com/china-carbon-market-expansion-delayed-caijing

[57] https://www.weforum.org/agenda/2023/10/new-technologies-decarbonizing-cement-production/

[58] https://urldefense.com/v3/__https:/www.iea.org/data-and-statistics/charts/levelised-cost-of-co2-capture-by-sector-and-initial-co2-concentration-2019; https://www.google.com/url?q=https://urldefense.com/v3/__https:/papers.ssrn.com/sol3/papers.cfm?abstract_id%3D3816593*:*:text%3DWe*20assume*20shipping*20costs*20based,2030*20for*205*20Mtpa*20CO2.__;I34lJSUlJSUlJQ!!Im8kQaqBCw!qYnmVM7rdc1-bZQM4akwrGGBeIlmlNODL1B0HqIZ7AOqF4ScBvh03-GpHnpLjh-XAeyOzt1mlXeUmbrVkGYKc4OfGePRYeFaWY0$&sa=D&source=docs&ust=1718880253758500&usg=AOvVaw1gcVSf7VJ86RXPCSSBlsz9

[59] https://urldefense.com/v3/__https:/cembureau.eu/media/jpthbmva/co2-costs-in-eu-cement-production-december-2021.pdf__;!!Im8kQaqBCw!qYnmVM7rdc1-bZQM4akwrGGBeIlmlNODL1B0HqIZ7AOqF4ScBvh03-GpHnpLjh-XAeyOzt1mlXeUmbrVkGYKc4OfGePRAgmhMxM$

[60] https://www.brevikccs.com/en#:~:text=Brevik%20CCS%20is%20HeidelbergMaterials%20most,cement%20for%20decades%20to%20come

[61] https://www.iea.org/policies/16255-inflation-reduction-act-2022-sec-13104-extension-and-modification-of-credit-for-carbon-oxide-sequestration

[62] https://www.weforum.org/first-movers-coalition

[63] https://www.greenbiz.com/article/how-decarbonize-concrete-and-build-better-future

[64] https://www.greenbiz.com/article/how-decarbonize-concrete-and-build-better-future

[65] https://www.greenbiz.com/article/how-decarbonize-concrete-and-build-better-future

[66] https://www.mckinsey.com/industries/engineering-construction-and-building-materials/our-insights/decarbonizing-cement-and-concrete-value-chains-takeaways-from-davos#/

[67] https://www.greenbiz.com/article/how-decarbonize-concrete-and-build-better-future

[68] https://www.mckinsey.com/capabilities/sustainability/how-we-help-clients/mckinsey-platform-for-climate-technologies

[69] https://www.mckinsey.com/capabilities/operations/our-insights/global-infrastructure-initiative/roundtables/glasgow-cop26-2021-decarbonizing-the-built-environment

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