Cement wisdom not set in stone

Australian
Monday 29/6/2009 Page: 24

A PRIVATELY owned Melbourne company about to bring lowcarbon cement into commercial production has taken issue with the government's proposed emissions trading scheme, saying it offers no incentive to the incumbent cement producers to lower emissions and might even allow them to collect windfall profits from gaming the system.

Zeobond, a company established and owned by the family of University of Melbourne professor Jannie van Deventer, has developed a product called E-crete. It claims 80% less emissions are produced than conventional cement.

E-crete is created by using geopolymers and a less emission intensive chemical reaction than conventional cement, which releases huge amounts of carbon dioxide one tonne of carbon for every tonne of cement mostly when limestone is broken down using extreme temperatures. It is estimated that three tonnes of cement are produced per person, per year. It is now estimated as the third-largest human contributor to greenhouse gas emissions after the burning of fossil fuels and deforestation.

Professor van Deventer's concern with the proposed ETS is that the cement industry has convinced the government there are no low emission alternatives, and because it is treated as an emissions intensive, trade-exposed industry, it will get 94.5% compensation through free permits. Professor van Deventer says using substitutes such as fly ash and slag can significantly reduce emissions. Australian cement producers do use such substitutes, but at a lower rate than many other countries.

Because of the way the ETS compensation is calculated based on the amount of clinker produced, rather than cement binder producers could add more substitutes earlier in the process, increasing the volume of free permits they could receive for the same volume of blended cement. Clinker is stuff that comes out of a kiln. "If you add ash you can get a totally perverse outcome, giving credits for material that didn't generate carbon in first instance," Professor van Deventer says.

Zeobond believes it is further disadvantaged because it is unlikely to enjoy the benefits enjoyed by emissions-intensive trade-exposed (EITE) industries for any energy emissions emitted in its own process, and so could be subject to the full carbon price. According to RiskMetrics, the cement industry would receive $190 million in free permits in the first full year of the ETS in 2012-13, and would have to buy only $14m of permits. Cement producers Boral ($64m), Adelaide Brighton ($54m) and Holcim ($35m) rank among the top 20 company recipients of EITE assistance.

Zeobond has proposed an alternative system, which would still provide compensation but would redefine the activity as the production of a concrete binder, rather than clinker. This would ensure that binders that do not use the conventional Portland Cement process such as its own are not disadvantaged. The incentive should not be placed in the hands of producers, but in the hands of users, Professor van Deventer says.

Zeobond already faces a hard enough task challenging the industry giants. Scale is the key, but this can only be achieved by having numerous plants in the big markets, as transport is a major cost. And Zeobond also needs to be able to access the fly ash and slag supplies, which are largely controlled by the cement industry. Our product is slightly more expensive (than the incumbents), mostly due to supply chain issues, but we don't buy enough quantities to push down the cost," Professor van Deventer says. "When you have scale, all that changes."

E-crete has been approved for use in footpaths and curb and guttering on main roads in Victoria, and Professor van Deventer says interest from local councils is very strong. "We don't need much penetration in the market to be very substantial." The key, though, is creating a network of plants. The company has one small demonstration plant that produces around 150 cubic metres a day a large concrete plant would produce that much in an hour but has signed licensing agreements with various groups.

The first commercial-scale plant should be ready within months. The company is currently raising money with the help of Macquarie Capital Advisors. Interestingly, the technology developed by Professor van Deventer is similar to that used by the ancient Romans, but the knowledge was lost. The production of conventional concrete has hardly changed in more than 100 years. "There has been very little innovation," he says. Now, he says, there is a strong desire in the Australian consumer market for change. "They really want to look at low-carbon products. There is a serious intent to do something."