KNOWLEDGE NOTES Pakistan Sustainable Energy Series CEMENT SECTOR ENERGY EFFICIENCY AND DECARBONIZATION (EE&D) OPPORTUNITIES B Cement Sector — Energy Efficiency and Decarbonization Opportunities Cement is an important large‑scale manufacturing industry that contributes nearly 1 percent to Pakistan’s gross domestic product (GDP) annually and accounts for an estimated 25  percent of all industrial primary energy consumption.i Energy contributes 60  percent to the total cost of cement production, and cement manufacturing in Pakistan relies on coal as the primary source of energy.ii More broadly, cement manufacturing accounts for between 65 to 70 percent of industrial coal consumption and at least 49 percent of the country’s coal emissions.iii Pakistan’s cement sector has 16 operational companies with 27 operational plants across the country. Ten companies operate in the north of the country, three in the south, and three have production plants in both the south and north. The cumulative production capacity was 77 million tons for fiscal year (FY)23. The subsector directly employs approximately 0.1 million people. The plants produce Ordinary Portland Cement, which is the main cement used in Pakistan. At 3.9 GJ/tonne of clinker the average energy intensity of cement plants in Pakistan is close to the global average.1 According to the country’s latest greenhouse gas (GHG) inventory, the process emissions from the cement subsector accounted for 75 percent of total industrial process emissions in 2018.iv This note describes decarbonization interventions to improve energy efficiency and reduce emissions in the cement sector while increasing industrial competitiveness and providing wider economic and environmental benefits. The current state of energy efficiency and decarbonization in Pakistan’s cement sector Cement manufacture consists of multiple energy‑intensive processes including mining, crushing, raw meal grinding, kiln rotation, clinker cooling, and packaging. Although the cost of coal makes up the largest share of direct costs associated with cement production, a substantial amount of electricity is also used in various value‑chain processes. At 90.4 kilowatt hours per tonne (kWh/t), the average electricity intensity of local cement production is lower than the global average of 100 kWh/t. In contrast, the average specific carbon emissions (both energy and process emissions) for local cement plants are 0.79  tonnes of carbon dioxide (CO2) per tonne of the product, which is higher than the global average of 0.6 tons of CO2 per tonne of product. Reducing the quantity of clinker in cement by adding other additives like fly ash and blast furnace slag can abate process emissions from the cement subsector; The clinker‑to‑cement ratio in Pakistan is 0.95 while the global average was 0.72 1 Average value for Pakistan based on an assessment of three cement plants. A plant with a 6‑stage cyclone, suspension preheaters, pre‑calciner, and high‑efficiency cooler is considered the best available performance plant with the lowest thermal energy intensity of 2.93 GJ/t of clinker. 2 in 2020. At 0.57 to 0.6, Chinese plants manufacture with the lowest clinker‑to‑cement ratio. According to the International Energy Agency (IEA), the global average ratio of clinker‑to‑cement must decrease to 0.65 by 2030 in order to meet net‑zero targets.v Existing & emerging opportunities for improving EE&D Several cement plants in Pakistan have implemented various energy efficiency and decarbonization interventions including adopting alternative energy sources, installing waste heat recovery (WHR) systems on kilns, replacing roller mills instead of ball mills (a modification known to enhance efficiency) and shifting the medium of the ball mill from steel to alumina. Energy efficiency and decarbonization in the cement industry can be achieved through multiple additional pathways such as through the utilization of efficient motors and control drives on motor driven systems, the use of distributed renewable energy (biomass or waste for heat production in the cement kiln), fuel switching (green hydrogen for power and heat generation), electrification (electric heat kiln), carbon capture (capturing both process and energy emissions), process improvement (alternative binders and clinker), circularity (recycling of concrete, use of slag, fly ash), and innovative technologies (such as WHR on compressors, ORC on a kiln, and air‑cooler exhaust). Pakistan’s cement manufacturing industry can adopt existing and emerging technologies to reduce emissions impacts by 3 to 35 percent and decrease energy impacts by 6 to 20 percent. (See annex 1 for a description of the most feasible existing and emerging technologies for the cement sector and annex 2 for the summaries of the analysis of five recommended existing and emerging technologies for the cement subsector.) Table 1:  Existing and Emerging Energy Efficiency and Decarbonization Technologies for Pakistan’s Cement Sector Exisiting technologies Emerging technologies Replacing coal with biomass and waste Use of emerging alternative fuels Given Pakistan’s significant biomass production Nearly 40 percent of energy related emissions potential (an estimated 25.3 million tons per from cement plants can be avoided if the kiln heat year), restructuring the fuel mix of the cement is produced with green hydrogen (from renewable industry with alternative fuel options is a realizable sources) or by using an electric kiln (using renewable possibility. Replacing 25 percent of coal used in electricity). The Roto Dynamic Heater (RDH) is the cement manufacturing with alternate sources can only electric kiln technology that can reach up to reduce direct emissions by 182 kg‑CO2/t‑product. 1700°C with green electricity. It has the potential to The estimated investment costs for waste‑derived reduce current fossil fuel‑related industrial emissions fuels range from US$1.1 per tonne of annual clinker by 30 percent (equivalent to a 7 percent reduction production capacity for arranging a storage and in overall global emissions). A demonstration processing facility. However, several barriers project funded by Mineral Products Associates such as the lack of specific regulations on using (MPA) has successfully operated on net zero fuel, waste/biomass as an alternate fuel, higher capital including hydrogen, and can save 180,000 tons of expenditures (CAPEX) and operating expenditure CO2 annually if implemented on a whole kiln. The (OPEX) for the waste pre‑processing facility, and lack Technology Readiness Levels (TRL) associated with of technical experience with burning alternate fuels in the technologies is low (5 for an electric kiln and 4 for the kiln need to be addressed. Some industries have hydrogen use in a cement kiln respectively). invested heavily in managing supply chain of crop residue based alternate fuels. Cement Sector — Energy Efficiency and Decarbonization Opportunities 3 Exisiting technologies Emerging technologies Low‑temperature waste heat recovery (whr) Carbon capture utilization and storage based on organic rankine cycle (orc) Globally up to 60 percent of the direct carbon The use of low‑temperature Waste Heat Recovery emissions in the cement industry originate from (WHR) based on the Organic Rankine Cycle (ORC) a chemical reaction called calcination. These could significantly improve the energy efficiency emissions cannot be avoided through energy of Pakistan’s cement industry. An ORC system can efficiency measures or fuel‑switching options. handle waste heat sources as low as 150 °C, making Instead, a post‑combustion carbon capture storage it suitable for dry processing cement plants where and utilization (CCUS) technology will be needed conventional steam turbine‑based power generation to decarbonize these process emissions. CCUS systems are only capable of handling heat sources technologies are at the pilot or demonstration above 260°C. Electricity savings of up to 25 kWh stage globally while some have recently been per tonne of clinker can be achieved through WHR, commercialized. The world’s largest CCS plant with reducing indirect emissions by 5 to 10 kg‑CO2/t‑clinker. a capturing capacity of 50,000 t‑CO2/yr. has started The cost of an ORC system ranges from US$2,500 to its operation in China, while another with a capturing $3,800/kW (based on the capacity of the ORC system), capacity of 500,000 t‑CO2/yr. is planned in India. and the estimated price for electricity generated by WHR systems ranges from US$21 to $34/MWh. Improving the efficiency of auxiliary Alternative clinker cement chemistries equipment Several types of alternative cement chemistries offer Improving the performance of auxiliary equipment such significant emission reduction potential compared as fans, conveyors, blowers, motors, compressors, to traditional Portland Cement (PC) clinkers. The and pumps can enhance energy efficiency in cement carbonate‑able calcium silicate clinker (CCSC) manufacturing. An estimated 10 percent of the overall and limestone calcined clay (LC3) cement both energy used in a cement manufacturing plant is offer a 30 percent reduction potential with TRL consumed by auxiliary equipment. Energy‑saving levels of 8 and 9, respectively. The Belite calcium potential varies with the type of energy efficiency sulpho‑aluminate (BCSA) has a 20 percent to measure; variable speed drives (VSDs) on motors can 30 percent reduction potential and is at TRL 7, while reduce energy consumption by 3 to 8 percent, variable the calcium sulpho‑aluminate clinker (CSA) is a fully frequency drives (VFDs)/VSDs on fans by 5.5 kWh/t commercialized option with a 23.9 percent reduction of clinker; high‑efficiency fans can conserve 1.1 kWh potential. Finally, magnesium oxides from magnesium per tonne of clinker, and replacing motor drives with silicates (MOMS) are at a low level of development hydraulic drives can produce 10 to 15 percent savings. (TRL 3 to 5) but offer the potential to absorb all Together these measures can reduce carbon emissions carbon emissions released during their production. by 3 to 5 kg CO2 per tonne of clinker. Cement Sector – Barriers to EE&D Awareness of the environmental and financial benefits of decarbonization investments is low among manufacturers. Firms lack both the knowledge and expertise to make informed decisions about energy efficiency investments. Although some larger firms have invested in WHR and the use of biomass and other renewable energy sources, multiple opportunities exist for improving energy efficiency through the adoption of relatively low‑cost equipment. For instance, interventions to reduce compressed air losses and compressor energy consumption are often overlooked even though investments in these improvements can provide significant energy savings without causing extended disruptions to operations. 4 Pakistan Energy Efficiency - Knowledge Notes Policy incentives are not aligned with decarbonization goals and the energy efficiency potential of the sector. Government policies, particularly those concerning sustainability and energy efficiency, are perceived to be costly to implement. In addition, there is no central mechanism for monitoring industrial energy efficiency, which makes it difficult to identify or leverage progress for accessing green financing or carbon credits for instance. Formal communication channels to enable regular interaction between the government and industry on sustainability and efficiency related policies are also missing. There is also a communication gap between policy makers and industry that impedes the development of effective policies for improving sustainability and energy efficiency in textile manufacturing. Limited access to financing makes capital intensive investments in energy efficiency and decarbonization technologies unfeasible for most manufacturers. Local financial institutions lack the capability to effectively assess risks associated with energy efficiency loans and are reluctant to extend financing for energy efficiency or decarbonization investments. As a result, substantial energy savings from relatively simple retrofits involving the replacement of motors or motor driven systems remain unexploited due to a lack of financing. Emerging technologies such as green hydrogen generation and storage is also technically feasible but requires high upfront investment. Production of low‑clinker cement is an effective decarbonization strategy, but low market acceptance and high plant conversion costs impede market development. Industries also often overlook process optimization interventions to avoid plant conversion costs and losses due to production disruptions. The production of low‑clinker cement is one such opportunity that is under‑utilized in Pakistan and could be leveraged for substantial energy and emissions savings given the right support. Cement Sector — Energy Efficiency and Decarbonization Opportunities 5 Table 2:  Recommended strategies for promoting energy efficiency and decarbonization in cement industry Barriers Mitigation strategies Responsibility Low awareness of • Establishment of dedicated EE&D or Sustainability Units within large • Cement Industries the environmental cement manufacturing plants and APCMA. Regular training to familiarize • All Pakistan Cement Manufacturers Association and financial benefits staff with available technology options and returns from energy (APCMA) of decarbonization efficiency investments. • National Compliance Centre (NCC), Ministry of investments • Development of case studies showcasing successful EE&D Commerce implementation in Pakistani cement plants. • NEECA & Provincial Designated Agencies Misaligned policy • Making fiscal and financial incentives for cement plants conditional on • Federal & Provincial Government incentives achieving verifiable EE&D targets and emission reduction goals. • Ministry of Industries and Production • Establishment of a centralized online database for tracking energy • Ministry of Climate Change &EC, Federal & Provincial efficiency interventions and energy savings across the cement industry. Environmental Protection Departments • Developing sector‑specific EE&D targets and standards for the cement • Ministry of Planning, Development & Special Initiatives industry, including clinker‑to‑cement ratio reduction. (MOPDSI) & Provincial P&Ds • Creating a platform for regular dialogue between policymakers and the • Pakistan Standards and Quality Control Authority cement industry. (PSQCA) • Assistance with accessing green financing and leveraging carbon • NEECA & Provincial Designated Energy Efficiency credits. Agencies • Making productivity audits mandatory • A central entity responsible for liaison between policymakers and industry. Limited access to • Government support for setting up Energy Service Companies (ESCOs) • State Bank of Pakistan, National Institute of Banking financing and implementing energy efficiency and decarbonization projects. & Finance (NIBAF), financial institutions, multilaterals, bilaterals, Global Environment Facility (GEF), Energy • Risk mitigation to improve access to and affordability of energy Conservation Fund (ECF), Green Climate Fund (GCF), efficiency investments. carbon markets etc. • Development of standardized project appraisal methodologies for EE&D • Leasing & Insurance Companies investments in the cement industry. • Federal & Provincial Designated Energy Efficiency • Promoting the use of the State Bank of Pakistan’s Long Term Financing Agencies Facility (LTFF) for EE&D projects in the cement industry, highlighting its benefits and streamlining the application process. • Financial support for piloting emerging technologies. 6 Pakistan Energy Efficiency - Knowledge Notes Barriers Mitigation strategies Responsibility Low market • Market creation through bulk procurement of low‑clinker cement for • NEECA acceptance and high public construction projects. • Federal government production cost of • Development of standards and certification schemes for low‑clinker low‑clinker cement • Provincial governments cement products. • PSQCA • Awareness campaigns to promote the benefits of low‑clinker cement among consumers and construction professionals. • Ministry of Housing & Works • Incentivizing research and development in low‑clinker cement • Communication & Works Department technologies. • Pakistan Engineering Council (PEC) • Pakistan Council of Architects and Town Planners (PCATP) • Association of Builders and Developers (ABAD) • Academia/Engineering Universities (Civil Engineering Departments) Cement Sector — Energy Efficiency and Decarbonization Opportunities 7 Annex 1 Figure 1A.1:  Existing Energy Efficiency and Decarbonization Opportunities for Pakistan’s Cement Sector Textile sector: emerging energy efficiency and decarbonation opportunities Five shortlisted recommendations Energy Fuel Waste Heat Process Process Efficiency Switching Recovery Improvement Improvement Improving EE of Alternate fuels Installing ORC Relacing ball mills Installing auxiliary equipment (biomass/waste) based WHR system with roller mills hydraulic drives Three most prominent recommendations Recommended option Cost Emission impact Energy impact Improving EE of auxiliary equipment USD 80–460/kW* ↓ 3 to 8% ↓ Up to 6% Installing low temp WHR system (ORC) USD 1–1.3 million** ↓ Up to 10% ↓ Up to 20% High TRL alternate fuel (biomass/waste) USD 5–18 million*** ↓ Up to 35% ↓ 6% heat, 2% kWh * Depends on the type of equipment i.e., pump, VFD, blower, ** per MW or ORC based plant ***For plant capacity of 6tph Figure 1A.2:  Emerging Energy Efficiency and Decarbonization Opportunities for Pakistan’s Cement Sector Cement sector: emerging energy efficiency and decarbonization opportunities Five shortlisted recommendations Material Fuel Fuel CCS and/or Circular Efficiency Switching Switching CCU economy Alternate cement Electrification of Green hydrogen for Cement specific Recycling of chemistries kiln combustion in kiln carbon capturing concrete Three most prominent recommendations Recommended option TRL Cost Emission impact Energy impact Cement specific CCUS 6–7 USD 250/t-CO2 ↓ Up to 95% ↓ 60% GJ, 70% kWh Low TRL heat (electric and H2 in kiln) 7–9 USD 200/t-CO2 ↓ Up to 40%* N/A (low TRL) Alternate cement chemistries** 4–9 5yr.) Risks/challenges/ High capital cost Higher capital cost, Higher capital cost on a US$/ Instability of material Availability of biomass/ barriers as compared to an lower share in kW basis, less efficient in bed, vibration/wear of waste, heat content electric motor of the overall energy cost, medium‑high temperature grinding roller, product variations same size, lack of lack of minimum applications (>350°C), higher quality issues efficiency standards performance auxiliary power requirements, standards. expensive organic fluids, (maybe harmful or flammable as well) Regulatory Solutions No sector‑specific NEECA is currently No sector‑specific regulations No sector‑specific No sector‑specific regulations related to working on minimum related to this technology regulations related to regulations related to this this technology performance this technology technology standards for motors and pumps. Possible ways Awareness Introduction of Pilot ORC projects, awareness Introduction of Regulations related to to promote this campaigns, the energy efficiency campaigns regarding ORC, and sector‑specific energy waste management/ technology introduction of energy standards, targets, financial incentives efficiency targets, the utilization, Introduction of efficiency standards and financial introduction of financial emission standards/targets and targets, financial incentives incentives, cooperation incentives with industry associations and other relevant stakeholders 10 Pakistan Energy Efficiency - Knowledge Notes Table 2A.2:  Summary of Analysis of Emerging Technologies for the Cement Subsector Emerging technologies (Cement Subsector) Technologies → Cement‑specific carbon Assessment Electrification of Low TRL alternate fuel Alternative cement capture, utilization criteria ↓ Cement production (Hydrogen) chemistries & storage Recycling of concrete Description of current Coal is used as the main Coal is used as the main Ordinary Portland Simple air pollution Concrete demolition baseline technology primary energy source primary energy source Cement (with 95% control system (dust waste is generated in kilns clinker) collector) every year and this waste ends up in landfills. Description of proposed Green electrification of Green hydrogen heating To decrease clinker To capture CO2 This waste could instead emerging technology kiln source for kiln to cement ratio with produced during be recycled to get some alternate binders calcination (most ingredients in concrete concentrated CO2 and and reuse them in an easy to capture, store efficient way and use) Technology readiness 5 6 7 to 9 6 to 7 7 to 9 level (TRL) Example of existing RDH by Coolbrook, Mineral Products LC3, BCSA CLEANKER and LEILAC reCO2ver applications (if any) CemZero, Vattenfall and Association Cementa Emissions reduction All coal‑related All coal‑related 15‑70% Up to 95% 50 kg of CO2 per tonne potential (kgCO2 or % of emissions emissions of concrete existing emissions) Energy reduction Low TRL (savings Low TRL (savings 30‑50% for BCSA N/A (not available) 30% less cement potential (kWh or % of unavailable) unavailable) required existing energy) Details of CAPEX US$20–50/tCO2 US$3 to 8 per kg of H2 Negative cost up to Capture cost up to N/A (Source dependent) -US$40/tCO2 US$70/t CO2 Is technology applicable Yes No Depends on chemistry Yes Yes to an existing system? Estimated payback: Short Low TRL (info Low TRL (info Depends on chemistry N/A N/A (<3 yr.), medium (3–5 yr.), unavailable) unavailable) long (>5yr.) Cement Sector — Energy Efficiency and Decarbonization Opportunities 11 Emerging technologies (Cement Subsector) Technologies → Cement‑specific carbon Assessment Electrification of Low TRL alternate fuel Alternative cement capture, utilization criteria ↓ Cement production (Hydrogen) chemistries & storage Recycling of concrete Adoption timeline: Long Long Short/long (depends on Long Medium‑long short (<5 yr.), medium chemistry) (5‑10 yr.), long (>10 yr.) Risks/challenges/barrier Higher temperature Higher hydrogen Availability/properties/ Thermal energy use Low cost‑effectiveness requirement in the kiln production cost, Low TRL price of alternate increases by 1 to of recycled components, is the key barrier to (Need R&D), Requires materials, lack of 3.5 MJ/t‑clinker while increased transportation electrification, Low TRL green hydrogen for deep evidence of long‑term electrical energy cost. (need research and decarbonization durability/strength, OPC increases by 50 to 90 Low/no demand for development (R&D)), is mentioned in building kWh/t‑clinker. recycled concrete and Requires green electricity codes, low demand Higher costs due to lack of national programs. for deep decarbonization for alternate cement capturing, utilization, chemistries, storage or transportation, and lack of national CCUS initiatives. Regulatory Solutions Lack of sector‑specific Lack of sector‑specific Cement quality No sector‑specific Lack of sector‑specific regulations, policies, and regulations, policies, and standards are available regulations related to regulations, policies, and studies related to this studies related to this only, lack of standards CCUS studies related to this technology technology and regulations related technology to carbon intensities of different cement chemistries Possible ways to Funded R&D activities Subsidy/incentives for Funded R&D, industries/ Funded R&D, funded Subsidy for high‑quality promote this technology hydrogen production academia linkage, pilot projects, and a recycled aggregate and technologies, Funded standards, regulations, carbon tax a carbon tax R&D and pilot projects and a carbon tax with regulations and a carbon tax 12 Pakistan Energy Efficiency - Knowledge Notes Endnotes i Pakistan Credit Rating Agency (PACRA). 2024. Cement Sector Study. 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Waste Heat Recovery in Turkish Cement Industry: Current Status and Project Experience. Washington, DC: IFC.  13