Concrete is a highly energy and CO2-efficient building material. After water, it is globally the second most consumed commodity by volume, and vital to a functioning infrastructure. Production of the intermediate product cement is, however, energy-intensive – with thermal and electrical energy accounting for approximately 40 percent of the cost of production. In US dollar terms, energy costs have risen by around 8 percent per year over the last five years. In addition, CO2 emissions occur – 60 percent of which are caused by the chemical conversion of stone in the rotary kiln and 40 percent by the use of fossil fuels.
Because the European cement industry currently emits less CO2 than it is entitled to, large sums of money are raised each year from the sale of excess emissions certificates. The reasons for this excess are the sluggish European growth and the industry's endeavors to boost energy efficiency and reduce emissions. Holcim is leading in these areas in particular.
Holcim allocates these proceeds to a fund to promote energy efficiency – normally some CHF 100 million every year. The fund launched in 2010 should help ensure the realization of innovative projects across the Group in the field of heat recovery, the utilization of alternative fuels and raw materials, as well as wind power and hydroelectricity. The objective is clear: to save fossil fuels and boost energy efficiency, resulting in an improvement in our environmental footprint and a reduction in production costs; this is particularly important against the backdrop of rising global energy costs. The energy fund is an element in the Group's comprehensive strategy for countering these cost pressures.
Holcim has produced a list of criteria for the assessment of projects to be financed. The emphasis is on economic efficiency, the potential to reduce CO2 and the possibility of multiplying innovations speedily and successfully across the Group.
The creation of the Fund led to competition between the Group companies to produce the best project proposals, and sparked a whole series of new approaches for sustainable energy projects. 2010 saw funds earmarked for five heat recovery plants in Vietnam, India, Romania, Lebanon and Switzerland. These installations are under construction and will be commissioned between the end of 2011 and 2013. Another six projects were approved this year. They include four waste heat recovery units in Canada, Slovakia, Mexico and India, as well as two installations for the utilization of alternative fuels and raw materials in Germany and France. These facilities will be commissioned in 2013 and 2014.
Once completed, the projects approved to date will produce a cumulative 36 megawatts of electricity – equivalent to the electricity needs of a very large cement plant. Thereby Holcim will save around 200,000 tonnes of CO2 bannually. That is approximately as much as the annual CO2-emissions of a small town with 30,000 inhabitants.
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Holcim is one of the world's leading suppliers of cement and aggregates (crushed stone, gravel and sand) as well as further activities such as ready-mix concrete and asphalt, including services. The Group holds majority and minority interests in around 70 countries on all continents.
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