Green finance set to fund burning waste in cement kilns

Projects to burn waste, including plastic, as alternative fuel in cement kilns are being considered for ‘green’ financing, drawing criticism from environmentalists.

Chemical plants
Chemical plants release toxic smoke. Hard-to-abate heavy industries such as cement production, iron and steel manufacturing and chemicals account for almost 20 per cent of Southeast Asia’s energy-related emissions today. Image: Shutterstock

The cement industry, a major source of greenhouse gas emissions, could soon be eligible to tap green financing markets to pay for waste to be burned as fuel in its kilns. While the industry is touting this as a way to reduce its reliance on fossil fuels, environmentalists say it will discourage one of the world’s biggest polluting industries from transitioning to cleaner energy. 

The Climate Bonds Initiative (CBI), a London-headquartered group which mobilises global capital for climate action, is proposing climate financing criteria for the cement industry that uses municipal waste to be burned in cement kilns as an alternative fuel, according to a draft Cement Criteria currently under public consultation until 7 May.  

The Global Cement and Concrete Association (GCCA), an industry group representing some of the world’s biggest producers, told Eco-Business that using waste as a fuel reduces its reliance on fossil fuels and that the extremely high heat used in its kilns ensures waste is treated in a “safe and environmentally sound way”.  

It is also a way for the cement industry to cut costs because waste is often available for free and sometimes municipalities pay companies to take it away.  

Fuel, mainly coal, is the industry’s biggest cost. The cement industry is responsible for 7 per cent of greenhouse gas emissions, and 25 per cent of industrial emissions, according to the World Cement Association, an industry group.   

Some scientists and environmentalists say burning waste, particularly plastic, can release toxic emissions into the local environment and replaces one dirty fuel with another.  

Environmental groups also say there is no guarantee cement companies will use sufficient heat, especially if they want to cut costs. In 2014, a cement plant in Austria released highly toxic substances after the facility burned industrial waste at too low a temperature. Animals grazing near the plant had to be slaughtered after their feed was contaminated, while milk and cheese was also destroyed. 

Whether burning waste is better for the environment than using coal is contested. The cement industry says it reduces carbon dioxide emissions while some experts say it depends on the composition of the waste and how well it is managed. The United States Environment Protection Agency says there is no significant environmental benefit from replacing coal with plastic waste. 

Sean Kidney, chief executive of the CBI, did not respond to requests for comment.  

If rubberstamped by CBI, “any assets and activities involved in the production of cement” could be eligible for climate finance.

The CBI’s Climate Bonds Standard and Certification Scheme provides a “clear signal to investors and intermediaries on the climate integrity” of bonds and could mean waste-to-fuel projects have access to cheaper lending. 

The Climate Bonds Standard is a screening tool, according to the CBI, allowing investors and governments to “identify green bonds where they can be confident that the funds are being used to deliver climate change solutions.”

The Global Alliance for Incinerator Alternatives (GAIA), an umbrella environmental group, released a public letter on Monday denouncing the move. 

“Widespread burning of waste in cement kilns would replace one form of fossil fuel with another. Plastic is a key component of the waste stream that the cement industry seeks to burn, and 99 per cent of plastic is made from fossil fuels,” GAIA said in its letter, endorsed by 175 civil society organisations in more than 35 countries. 

GAIA appealed to the CBI to instead “use its clout to develop standards for innovative, toxic-free, low-carbon construction materials and approaches as an alternative to cement.” 

Prashant Vaze, former head of policy at CBI, also said that green financing shouldn’t be granted to projects that burn waste. 

“Green funding needs to go into developing alternatives to incineration and landfill like reuse, repair and recycling,” Vaze said. 

Worldwide, 30 billion tonnes of concrete is used each year. Despite its versatility, it has a significant carbon footprint. 

The latest report from the Intergovernmental Panel on Climate Change (IPCC) published in April said that: “Cement and concrete are currently overused because they are inexpensive, durable, and ubiquitous, and consumption decisions typically do not give weight to their production emissions.”   

GAIA argues that providing climate bonds to legitimise the cement industry’s reliance on waste-burning as a business model will perpetuate the problem. 

However, the industry maintains that this is not the case. 

“The waste burning business model is not new, it has been used for decades. Since waste producers have to pay cement plants to treat their waste, this is hardly an incentive to use more,” Ian Riley, CEO of the World Cement Association, told Eco-Business.

“There are examples of cement kilns operating with 100 per cent alternative fuels demonstrating the potential and the robustness of this lever for significant decarbonisation,” said Claude Lorea, executive cement director of GCCA told Eco-Business.

Alternative fuels are derived from non-primary materials including waste or by-products which can be biomass, fossil or mixed (fossil and biomass) alternative fuels, according to Lorea, who is also a member of the CBI’s Cement Criteria Industry Working Group. 

“Supply chain logistics and infrastructure, permitting and waste policy to reduce/eliminate waste to land fill are required to support the industry in increasing their use of alternative fuels.” 

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