DHoC Lucia CAUDET meeting with Cembureau
Ref. Ares(2022)1133188 - 16/02/2022
CAB room, 20th April, 2020
BRIEFING (Commission Internal)
Scene setter/Context of the meeting: You will meet with
and
from Cembureau, to discuss how a
robust EU industrial policy can support deep decarbonisation in
the sector, as well as the implications of such significant industrial
transformation for Europe’s competitiveness.
Cembureau has sent a letter to Commissioner Breton on
5.12.2019, explaining how the cement sector intends to play a
leading role in the European Green Deal. The cement industry is
one of the most CO2 emitting sectors and is heavily concerned by
requirements of climate-neutrality. It is a key economic actor in
Europe, employing directly over 35,000 people. The combined
cement and concrete industry generates a total value added of
€56bn in the EU28 and over 1.1 million jobs.
Cembureau has played an active role in the High Level Group of
Energy Intensive Industries when developing the energy-intensive
industries’ 2050 transformation masterplan that was published in
November 2019. Over the past months, the cement sector has
worked on a revision of its low carbon roadmap targets with the
intention to bring it in line with an ambition to achieve carbon
neutrality along the cement and concrete value chain.
This meeting was initiated when COVID-19 crisis was stil at its
early stage. Cembureau will certainly raise issues on the impact of
this crisis on cement sector. Their reporting on this matter is
included in the background of this briefing.
,
Heidelberg, was one of the EIIs in the COVID-
19 call with TB on 7/4. He highlighted the major disruption to the
construction sector, the need to get Europe building again
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(especially infrastructure) and to tackle SMEs’ urgent liquidity
problems. He highlighted the need to do something about
construction activity being shut down in some member states (FR,
IT, ES), while it is operating almost as normal in DE, PL and NL,
and the need for more consistency on safety of operations and
free movement of goods.
The key messages:
• The Green Deal for Europe wil be the new growth strategy for
the next 30 years and an ambitious industrial pillar is a
prerequisite for a successful transition towards a climate-
neutral and circular economy. We need industries to play their
role in this transition; industry must be at the core of it.
• Transforming our industrial base on this scale requires long
time – at least some 25 years - and consistent efforts by all
industrial actors and different government levels. We need to
get better at scale-up and investment in low carbon
technology. One of the instruments mentioned in the new
Industrial Strategy is the Industrial Alliance on Low-carbon
Industries. We assume cement industry to be one of the key
partners in delivering it.
• In addition to horizontal measures creating favourable
framework conditions, the EU Industrial Strategy provides
more targeted actions along value chains. For example,
addressing the dependency of European value chains on
foreign suppliers of critical raw materials and ensuring strategic
autonomy. Improving the diversification of raw materials’
sourcing and good circular economy practices that result in
higher recycling rates could both help to reduce our
dependencies.
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• Energy-intensive industries are indispensable to Europe’s
economy, as they supply several key value chains. The
decarbonisation and modernisation of this sector is essential.
• I have been happy to hear about the active role Cembureau
has played in the High Level Group of Energy Intensive
industries when developing the energy-intensive industries’
2050 transformation masterplan. In addition, it is reassuring to
know that, despite all disruptions in the operating
environment, the cement sector has worked on a revision of its
low carbon roadmap targets, to bring it in line with an ambition
to achieve carbon neutrality.
• The COVID-19 crisis have affected heavily all European
industries, including cement. I wish to thank you for your co-
operation in sustaining an up-to-date view on the situation by
contributing regularly to our analyses. Be reassured that
addressing the industry’s needs in the midst of crisis is the first
priority on Mr Breton.
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BACKGROUND
Name of the HoU who has cleared the briefing:
BASIS request ID: CAB BRETON/64
Room, time: CAB room, Brussels, 20.04.2020 at 11.30
Participants:
, Cembureau
Name of main contact person:
Telephone number: 80867
Directorate/Unit: GROW C2
Cembureau and European cement industry The European Cement Association based in Brussels is the representative organisation
of the cement industry in Europe. Currently, its Full Members are the national cement
industry associations and cement companies of the European Union (except for Malta
and Slovakia) plus Norway, Switzerland and Turkey. Croatia and Serbia are Associate
Members of CEMBUREAU.
The European cement industry is a key economic actor, employing directly over 35,000
people in the EU, whilst the combined cement and concrete industry generates a total
value added of €56bn in the EU28 and over 1.1 mil ion jobs. The sector is going through
its own digitalisation, impacting both the usage of their products (3D printing) and the
way the overal construction supply chain operates (for instance through the use of
Building Information Modelling).
Capital intensity: The cost of cement plants is usually above €150M per million tonnes
of annual capacity, with correspondingly high costs for modifications. The cost of a new
cement plant is equivalent to around 30 years of turnover, which ranks the cement
industry among the most capital intensive industries.
Transport: Land transportation costs are significant and it used to be said that cement
could not be economical y hauled beyond 200 or at most 300 km. Bulk shipping has
changed that, however, and it is now cheaper to cross the Atlantic Ocean with 35 000
tonnes of cargo than to truck it 300 km.
Energy intensity: Each tonne of cement produced requires 60 to 130 kilogrammes of
fuel oil or its equivalent, depending on the cement type and the process used, and
about 110 KWh of electricity.
Over the past months, the cement sector has worked on a revision of its low carbon
roadmap targets with the intention to bring it in line with an ambition to achieve carbon
neutrality along the cement and concrete value chain. The document looks in detail at
how CO2 emissions can be reduced by acting at each stage of the value chain – clinker,
cement, concrete, construction and recarbonation – to achieve the objective of carbon
neutrality.
Economic impact of COVID-19 on EU cement industry (update 02/04)
The EU cement industry supplies 12 mil ion customers along the construction value
chain and continuity of operations in the construction sector is essential for the
economy and for employment in local communities.
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Cement companies have seen a decline in demand in countries outside the EU. The
cement demand in China has dropped by 30%, cement production by 40%. In a limited
number of EU countries, operators are sourcing raw materials from China and supply
chains have been affected.
The outbreak of COVID-19 in EU Member States is affecting cement companies across
Europe. Some cement plants have been shut down in the most affected regions. As EU
countries have had major drops in demand it becomes harder to have the required
workforce to operate the plants. Among the most relevant problems that the cement
industry is facing there are problems in the construction activity due to the fact that
construction is not being regarded as vital in many countries/areas; difficulty of many
companies to produce and shutting down of companies caused by less business;
significant sales drops place high pressure on our companies and cost reductions are
not instantly possible; severe measures in human resources and significant impact in
product flows attributable to closure of borders.
On the demand side, across Europe, cement sales have dropped about 40% with a
variety among the EU Member States, but since the situation changes every week,
those numbers could variable change in the upcoming weeks.
Closure of borders delay the availability of supplies and delays have large impacts on
the construction sector. Disruptions in raw materials supply, fuel supply, spare parts
deliveries and engineering equipment might disrupt the production process of cement
companies. Furthermore, the cement industry is experiencing a serious problem of
labour force due to closure of borders some workers could not go to work, quarantine
of personnel as a consequence of contagion in a plant and strikes of some employees.
Teleworking is not always feasible because the presence in the plants is mandatory for
operations; therefore, in some countries they established the temporary
unemployment regimes and reduction of workers or mandatory holidays.
The cement sector seeks for measures in relation of temporary unemployment; free
movements of goods; flexibility on regulatory compliance deadlines; the launch of an
economic recovery plan from the EU.
Energy Intensive Industries’ 2050 Transformation Masterplan
In February 2019, at its 4th meeting, the High Level Group on Energy Intensive Industries
decided to produce an Industrial Transformation Master Plan to deepen analytical base
and operationalize possible pathways for the transition of these industries towards
climate-neutral and circular economy. The Masterplan was published on 28.11.2019.
The Masterplan presents an integrated policy framework with recommendations to
ensure that these industries can contribute to Europe’s 2050 climate-neutrality
ambitions. It outlines actions that could provide the right market signals to attract new
investments in Europe, help companies implement cost-effective pathways towards
climate-neutrality and seize new business opportunities in Europe and abroad. The
Masterplan also focuses on the need to ensure a just transition and considers the need
to equip workers with new skil s and help communities dependent on these industries
to manage the transition.
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The Master Plan offers actions with three dimensions that were covered by 3 sub-
groups. In each group the EI s, Member States, NGOs, academia and relevant
Commission services have been represented.
1.
Creation of markets for climate-neutral, circular economy products;
2.
Developing climate-neutral solutions and financing their uptake;
3.
Access to resources and deployment.
New Industrial Strategy
On March 10, 2020, the Commission adopted a New Industrial Strategy for Europe. With
this new strategy, the Commission is ready to do what it takes to make sure European
businesses remain fit to achieve their ambitions and cope with increasing global
competition.
European industry
• represents 20% of total EU value added:
• provides 35 million jobs;
• accounts for 80% of exports
• 99% of EU firms are SMEs.
The twin ecological and digital transitions are key drivers for the strategy. These
transitions will take place in a time of moving geopolitical plates, which affect the
nature of competition. The need for Europe to affirm its sovereignty and fight for a level
playing field is more important than ever.
The industrial strategy provides a combination of horizontal measures creating
favourable framework conditions and a set of more targeted strategic actions along
value chains. In parallel with the EU Industrial Strategy, a number of related initiatives
have been developed such as the Single Market Enforcement Action Plan, Single Market
Barriers Report, Circular Economy Action Plan, Skills Agenda, or a list of critical raw
materials for the EU.
The right conditions are needed for entrepreneurs to turn their ideas into products and
services and for companies of all sizes to thrive and grow. The EU must leverage the
impact, the size and the integration of its single market to make its voice count in the
world and set global standards.
The European Green Deal is Europe’s new growth strategy. At the heart of it is the goal
of becoming the world’s first climate-neutral continent by 2050.
Digital technologies are changing the face of industry and the way we do business. They
allow economic players to be more proactive, provide workers with new skills and
support the decarbonisation of our economy.
New type of governance structures are needed to achieve the twin transition towards
climate neutrality and digital leadership. Where identified as necessary, the approach of
industrial al iances could be the appropriate tool. This has already shown its benefit in
the area of batteries, plastics and microelectronics. Alliances can steer work and help
finance large-scale projects with positive spill over effects across Europe, using the
knowledge of SMEs, big companies, researchers and regions to help remove barriers to
innovation and improve policy coherence. In this spirit, the Commission will shortly
propose to launch the new European Clean Hydrogen Al iance bringing investors
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together with governmental, institutional and industrial partners. The Alliance will build
on existing work to identify technology needs, investment opportunities and regulatory
barriers and enablers. Future alliances should also include low-carbon industries,
Industrial Clouds and Platforms and raw materials.
Built environment (buildings, infrastructure and construction)
Buildings, combining the residential and services sectors, currently represent the largest
share of final energy consumption in the EU (about 40%). We already have 80% of the
2050 building stock. An integrated approach and consistency across al relevant policies
is necessary for the modernisation of the built environment and the mobilisation of al
actors. This is the first priority in the 2050 climate strategy. The coordination and
funding mechanisms between public and private actors are key chal enges on top of the
availability of the right workforce and new affordable building materials and processes.
Moreover, the built infrastructure wil be highly exposed to the consequences of climate
change (such as coasts and cities) on top of the cost of normal maintenance.
Construction worker productivity can also be affected. This is why DG GROW is
proposing to design a more integrated approach for the built environment in
partnership with other Commission services and stakeholders. The current High-Level
Group for construction is already used for this purpose, since this sector wil be a key
enabler of the modernisation of climate change.
Construction currently represents between 6 and 10% of GDP and is the biggest market
for the building materials and equipment provided by energy intensive and engineering
industries (steel, cement, glass, chemicals, heat pumps and other digital appliances).
Horizon Europe wil be key to develop the next generation of climate neutral building
materials and processes.
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CVs of the participants
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