A Sectoral Approach for the Cement Sector The Cement Sustainability Initiative (CSI) Patrick Verhagen, Holcim Group Support Ltd Keidanren/WBCSD joint seminar, Feb. 29, 2008 DEDICATED TO MAKING A DIFFERENCE

Keidanren/WBCSD joint seminar, Feb. 29, 2008 DEDICATED TO MAKING A DIFFERENCE 2 Agenda  Background  Introduction  CSI Sectoral Approach (SA) Principles  Status January 2008 (data, mechanisms, technology and policy)  Major Open Issues

DEDICATED TO MAKING A DIFFERENCE Keidanren/WBCSD joint seminar, Feb. 29, 2008 DEDICATED TO MAKING A DIFFERENCE 3 Background  The next 40 years will see a rapid rise in the construction of buildings and infrastructure in growing developing economies, requiring vast amounts of building materials (concrete, steel, glass, etc);  The IEA forecasts a doubling in cement production by 2050 driven by a growing demand for concrete. The WBCSD CSI is developing a SA to address the related growth in direct GHG emissions;  The WBCSD Energy Efficiency in Buildings (EEB) project addresses the energy consumption caused by heating, cooling, lighting and services;  Increased interest in global sectoral approaches started with the 2005 OECD roundtable, the July 2005 G8 Gleneagles Plan of Action and the APP sectoral task forces. There is a necessity to mitigate both the up- as well as the down-stream emissions

DEDICATED TO MAKING A DIFFERENCE Keidanren/WBCSD joint seminar, Feb. 29, 2008 DEDICATED TO MAKING A DIFFERENCE 4  The CSI is an SD project, initiated in 2000 by 10 leading cement companies (now 18) operating in more than 80 countries;  It has a public track record of emissions reduction target setting and reporting;  Its members have set specific CO 2 reduction targets and are reporting yearly with verified CO 2 emissions data;  In 2006, the CSI started the development of a global Cement SA to address direct emissions;  The Bali Roadmap refers specifically to cooperative sectoral approaches and sector-specific action as part of negotiations for the post 2012 agreement. Introduction The CSI, as a group of leading companies, already addresses the CO 2 emissions reduction upstream

DEDICATED TO MAKING A DIFFERENCE Keidanren/WBCSD joint seminar, Feb. 29, 2008 DEDICATED TO MAKING A DIFFERENCE 5 CSI SA Principles  A SA must contribute to more rapid, equitable and economical GHG reduction;  Bottom up and top down development of framework;  It must be set within the UNFCCC, compatible with existing and future mechanisms (e.g. ETS, CDM/JI);  It must include major developed and developing economies;  It must be based on clear, simple metrics and methodologies and maintain a verified emissions data base;  Government involvement is needed to define sectoral targets, implementation mechanisms and avoid free riders. The CSI cement sectoral approach is pragmatic, involving all key stakeholders

DEDICATED TO MAKING A DIFFERENCE Keidanren/WBCSD joint seminar, Feb. 29, 2008 DEDICATED TO MAKING A DIFFERENCE 6 Status January 2008: Data  Intensity based benchmark (t CO 2 / t Product) and energy efficiency (MJ/ t Product);  Data supplied by 17 members based on common WBCSD/WRI CO 2 Protocol (as the Asia Pacific Partnership);  Database created covering about 700 facilities (1990, 2000, 2005) in over 80 countries;  Managed by PWC;  Trade associations invited to join database. A unique common language to measure and assess potential for progress

DEDICATED TO MAKING A DIFFERENCE Keidanren/WBCSD joint seminar, Feb. 29, 2008 DEDICATED TO MAKING A DIFFERENCE 7 Status January 2008: Mechanisms  A SA CDM methodology is being developed for presentation to the CDM Executive Board (EB) in 2008;  Benchmarking methodologies for different ETS’s will be developed and presented to the EC, Japan and other key countries in 2008;  The CSI will initiate discussions through the WBCSD with the UNFCCC in 2008, to ensure that the SA is compatible with the Framework Convention and emission credits are fungible with existing systems. An integrated approach building on existing and future mechanisms

DEDICATED TO MAKING A DIFFERENCE Keidanren/WBCSD joint seminar, Feb. 29, 2008 DEDICATED TO MAKING A DIFFERENCE 8  The CSI started in January 2008 a 3 yr Public-Private Partnership CO 2 Protocol Capacity-Building in China (Japanese funding and CSI coaching);  Several of its members joined in 2007 a 2 yr Norwegian- Chinese Partnership on fuel substitution;  A CSI member sponsored a workshop on a Code for Energy Conservation for Plant Design in 2008;  The CSI supports the development of the Chinese Center of Excellence (APP program);  It is evaluating carbon capture technology options with the European Cement Research Academy (ECRA);  Process innovation research (Columbia University). Status January 2008: Technology

DEDICATED TO MAKING A DIFFERENCE Keidanren/WBCSD joint seminar, Feb. 29, 2008 DEDICATED TO MAKING A DIFFERENCE 9  The CSI initiated stakeholder policy dialogues in 2007 with the Center for European Policy Studies (CEPS);  Further dialogues in 2008 in India, in Japan, the US, and in China;  The CSI is developing the SA general framework, trade associations leading country negotiations;  Scenarios will be developed in 2008 by using the newly developed database to test real-world viability of SA options;  The CSI is to accelerate its SA framework development, in alignment with a new WBCSD led SA project (steel, paper, aluminum, etc). Status January 2008: Policy

DEDICATED TO MAKING A DIFFERENCE Keidanren/WBCSD joint seminar, Feb. 29, 2008 DEDICATED TO MAKING A DIFFERENCE 10 Major Open Issues  Engagement of major developing economies;  Responsibility for setting/updating benchmarks and stretch/motivating targets;  Moving from reducing emission intensity to reducing absolute emissions;  Engagement of trade associations;  Acceptance of sector-based crediting;  Outcome and conclusions of the SA simulations;  Sectoral engagement by other Energy Intensive Industries. We aim at having a place at the policy discussion table

DEDICATED TO MAKING A DIFFERENCE Keidanren/WBCSD joint seminar, Feb. 29, 2008 DEDICATED TO MAKING A DIFFERENCE 11 I thank you for your attention. Reference sites :  WBCSD Cement Sustainability Initiative (CSI)  WBCSD Energy Efficiency in Buildings (EEB): (see “Project Initiatives”)