What A Changing Policy Environment Could Mean for Concrete Producers

By Eric Dunford

New tools in the hands of policymakers are creating renewed interest in the carbon footprint of concrete

Since the signing of the Paris Agreement in 2015, cities and states have committed to decreasing their greenhouse gas emissions. These commitments have taken shape in the preservation of forest lands, greater use of renewable energy, increased availability of alternative public transportation and transit options, and so on. 

One sector, however, has been difficult to address: industrial emissions. Activities such as raw materials extraction, refining, manufacturing, and food processing pose unique challenges. They have extensive energy requirements and the chemical processes used to refine raw materials generate significant emissions.

The production of concrete is no exception. The base chemical reaction that is relied upon to create cement from limestone generates up to 8% of annual greenhouse gas emissions.

As governments and public agencies turn their attention toward industrial emissions, the concrete industry is becoming an attractive opportunity for emissions reductions on a large scale. 

Source:  IPCC (2014)
Source: IPCC (2014)

Research studies and initiatives by the design community — Architecture 2030, Thornton Tomasetti, and Skanska, among others — have amplified the spotlight on the impact that our building materials have on our global climate and elected officials and policymakers are starting to take note.

Within the past year, procurement policies and legislation targeting low-carbon concrete have been introduced in Portland, Marin County, Hawaii, Austin, and New York State. There is also a revived interest in bringing concrete into the State of California’s Buy Clean Act. A similar Buy Clean bill was introduced in Washington State, though it did not advance beyond the committee stage.

So, while not all of the state-level policies will come to pass, there is an obvious appetite for change among elected officials and further action is almost a certainty. After all, Canada’s most recent federal election was referred to as the ‘climate election’ and recent polls show that climate and the environment rank among the most important issues to voters in the United States.

Source:  SolidWorks
Source: SolidWorks

How Could this Impact Concrete Producers?

Beyond regulatory power, governments and their agencies have enormous buying power and have outsized ability to influence their local markets.

According to a 2019 study, public governments and agencies are estimated to consume approximately 37% of all concrete. For many concrete plants, public spending is a key contributor to continued profitability — infrastructure spending is one of the largest drivers of demand for concrete.

Major industry players including Heidelberg and Lafarge have already announced their own emissions reduction targets. 

Producers that are prepared in advance of policy change will have a competitive advantage over late adopters when the switch occurs. Depending on the structure of policies that are eventually implemented, new revenue sources may also become available to producers.

Source:  IBISWorld
Source: IBISWorld

The 45Q tax credit introduced by the federal government in the United States demonstrates this potential. The credit subsidizes industry efforts to capture, sequester, or use carbon dioxide (CO₂) as a feedstock material. Carbon pricing policies, like the Government of Canada’s carbon pollution pricing plan, may also create opportunities for concrete producers to be paid to capture and utilize CO₂.

Concrete is a fascinating material because although it currently is a significant source of emissions, its unique properties give it the ability to potentially store CO₂ safely. Studies have shown that, with the right research and investment, industries that capture and reuse carbon will reach a market value of $400B by 2030. Due to its ubiquity and unique properties, concrete will play a large role in this and become part of the solution to reducing global climate emissions. Concrete producers that are proactively adopting sustainable innovations today will be well-positioned to capture a piece of the $400B pie.

Source:  National Geographic
Source: National Geographic

Summary of Climate Policies Affecting the Concrete Industry

Preferential Procurement

Public agencies provide bid advantages to suppliers that can provide low-carbon concrete at a competitive market price. Agencies may also mandate the application of specific technologies or approaches to reducing the carbon footprint of concrete (e.g. use of supplementary cementitious materials, use of CO₂ mineralization, etc.). This is the approach that has been proposed by the States of Hawaii and New York

Limits on Carbon Content

A maximum carbon content is identified, and all concrete procured must fall under this threshold. This approach provides flexibility to producers to determine the most economical way to achieve emissions reductions (i.e. energy efficiency, renewable energy use, use of supplementary cementitious materials, carbon utilization, or some combination of these options).

Carbon Pricing

Jurisdictions set a cap for the maximum annual emissions that can be permitted by industrial emitters. Exceeding this limit triggers the imposition of a tax or carbon price for all emissions over the threshold. This incentivizes investment in carbon-reducing solutions, driving innovation. Regulators may also use revenues from this tax to directly subsidize industrial activities that capture or sequester carbon. This approach has been used in the Province of Alberta since 2007.

Direct Subsidies

Limited subsidies are used to offset some of the costs to industry to comply with carbon reduction strategies. For example, the City of Portland has subsidized the creation of Environmental Product Declarations for concrete producers, which will put data in the hands of end users to begin preferentially procuring lower-carbon concrete.

Reduce CO₂ and Open Up New Market Opportunities

In 2007, CarbonCure set out to reduce the carbon footprint of the concrete industry. Our vision is to make the introduction of CO₂ into concrete standard for all concrete production across the globe.

Today, more than five million cubic yards of concrete made with recycled CO₂ have been supplied to construction projects around the world by the producers who have adopted CarbonCure.

Contact us if you’re interested in learning more about how the CarbonCure Technology helps concrete producers grow their businesses while shrinking their carbon footprints.

Eric Dunford is the Director of Sustainability at CarbonCure Technologies. 


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