"China Accelerates towards Carbon Neutrality" Cement: A path to carbon reduction in the cement industry

In the opening article of our series "China Accelerating towards Carbon Neutrality", we imagined a carbon-neutral world in 2050 dominated by new energy elements such as electric vehicles, hydrogen steelmaking, photovoltaic power generation, and green energy storage. Achieving this vision also means that the world needs to reduce net man-made carbon dioxide emissions by about 45% by 2030 compared with 2010. To achieve "net zero emissions" by 2050. In the face of the dual challenges of target and time, the road to carbon neutral transition needs to be started. While countries are competing to carry out specific research and implementation work, China also took the lead in proposing the goal of "carbon peak and carbon neutrality" in the general debate of the seventy-fifth session of the United Nations General Assembly. The United Nations Sustainable Development Goal 13 "Climate action" is also one of McKinsey's social responsibility priorities in China. At this key juncture, McKinsey officially launched China's large-scale carbon neutral transition research project in China. With the help of McKinsey's rich experience in global sustainable development research, combined with comprehensive understanding and profound insight into Chinese society, industries and enterprises, Mobilize the knowledge of more than 100 people around the world to carry out research on carbon neutral transition trends, countermeasures and technologies across major industrial sectors, hoping to make a small contribution to China's early achievement of carbon neutrality goals.

As the third article in this series, this paper will continue to study the carbon neutral transition using the cement industry as a sample. In the future, we will publish a series of articles covering high-carbon emission industries such as coal chemical industry, oil and gas industry and power industry, covering many topics such as carbon emission reduction path analysis, emerging technology discussion, investment cost forecast, international practice sharing, etc. We will also explore traditional carbon emission reduction process innovation, and carbon capture utilization and storage (CCUS), hydrogen energy and other emerging carbon emission reduction trends. In the process of promoting this research, we are very welcome experts from all walks of life colleagues, you can give valuable comments in the message area, you can also directly contact the team. We look forward to working with all sectors of society to advance the path of carbon neutral transition in a green China.

The necessity of carbon neutral transition in China's cement industry

Cement industry is an important basic industry of our national economy, and also constitutes the trunk of modern urban architecture. Globally, the cement industry contributes 7% of total carbon emissions. If the global cement industry were a country, it would be the third largest carbon emitter after China and the United States. China produces nearly 60% of the world's cement, and the carbon emissions of the cement industry are more than half of the total carbon emissions of the global cement industry.

Carbon dioxide emissions in cement production mainly come from the clinker production process (see Figure 1), in which the carbon dioxide emissions in the process of calcination of limestone to produce quick lime account for about 55-70% of the total carbon emissions in the whole production process. The high-temperature calcination process requires the burning of fuel, so the carbon dioxide produced accounts for about 25-40% of the total carbon emissions of the entire production process.

Currently, China's cement industry accounts for about 9% of the country's total carbon emissions and is a major source of carbon dioxide emissions in manufacturing. China is the world's largest cement manufacturer, accounting for about 60% of the world's 3.7 billion tons of cement production capacity in 2019. According to McKinsey estimates, in order to achieve a global warming scenario of no more than 1.5 ° C, by 2050, China's cement industry needs to reduce carbon emissions by more than 70%.

China cement industry carbon emission reduction path

Taking into account the cost, technical feasibility and resource availability of carbon emission reduction, we believe that declining demand, improving energy efficiency, alternative fuels and accelerating carbon capture technology are important starting points for carbon emission reduction in China's cement industry. Based on this, we mapped the carbon emission reduction path of China's cement industry from 2020 to 2030 and 2050.

With input from the Integrated Energy Transition Committee (ETC), the International Energy Agency (IEA), McKinsey's Global Cement Demand Forecast Model, and China's cement industry experts, we estimate that the decline in conventional demand will contribute about 27% of the carbon reduction in China's cement sector by 2050, driven primarily by urbanization and slower growth in the construction industry. As China's urbanization rate stabilizes, GDP-driven cement demand is expected to decline further, and maintenance and renewal of existing buildings will gradually dominate cement demand in the future. In addition, alternative building materials for concrete (e.g., steel, prefabricated materials, cross-laminated wood, etc.) will further reduce cement demand. However, the accuracy of demand forecasts is affected by the reality of urbanization and construction, and if demand does not fall as expected, other drivers will need to be relied on to drive carbon reduction, especially carbon capture and storage (CCS).