1. An Estimation of the Effect of Carbon Pricing for CO2 Mitigation in China’s Cement Industry
Presenter: Xianbing Liu
Senior Policy Researcher
Kansai Research Centre, IGES, Japan

2. Structure of the presentation
Overall frame of the LCT policy research at KRC/IGES
Background and research needs in China
Estimation of the changes in LCT deployment in response to
carbon pricing policies
Estimation of the mitigation effect of carbon pricing for
cement industry of China
Summary
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3. Overall structure of LCT policy studies at KRC/IGES
Geographical focus: Japan, China and the Republic of Korea
Policy focus: Carbon pricing tools, i.e., carbon taxes and GHG emissions trading scheme
Discussed in
this presentation
Overall objective:
To clarify the linkage between
policy and the change in
technology deployment
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4. Background and research needs in China
Large efforts of China in energy saving during the 11th and 12th FYP period;
Strict becoming pressure for GHG emissions mitigation;
China-US joint statement: Peak in around 2030 and intend to peak earlier;
INDC of China: e.g., 60-65% reduction in carbon intensity by from 2005;
Tradition in relying on command & control regulations but laggard in practicing market-based instruments (MBIs);
Lack of studies to identify the viewpoints of businesses as major policy practitioners;
Lack of technology and policy solutions for achieving the mitigation target at sector level.
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5. Analysis procedures of LCT diffusion
Measurement of possibility for companies to invest in technologies
Calculation of technology diffusion changes
Simulation of diffusion of target technologies in BAU case
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6. Survey to China’s cement companies and the samples
Questionnaire format: a) Company basic information; b) Energy saving management and adoption of target technologies; c) Factors determining LCT investment; d) Policies promoting technology diffusion
Implemented during November, 2014 to February, 2015
Coordinated by China Cement Association (CCA)
Sent to a total of 270 cement companies with 78 valid respondents collected
Number of employees
Ownership
Category
Number
Percentage
Below 100 1
1.3
State-owned 53
67.9 25
32.1
Domestically private 9
11.5
300-1,000 43
55.1
Joint-venture 13
16.7
Above 1,000
Fully foreign-funded
In total 78
100.0
Others 2
2.6
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7. Observed and simulated technology diffusions
Note:
Oxygen-enriched
combustion was omitted
due to insufficient data
collected for the analysis.
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8. Investment possibility in various technology payback times
Result:
Payback time on 50% of the
samples corresponds to 2.5 and
3.9 years on the two curves
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9. EMOS diffusion paths with various carbon prices
Findings:
Carbon pricing indicates effectiveness in
promoting EMOS diffusion.
2.6%, 6.3% and 9.2% increase in diffusion rate
at 20, 60 and 100 Yuan/t-CO2 From BAU in 2015.
Moderate price at 60 Yuan/t-CO2 may have
a similar effect with the high price of 100 Yuan/t-CO2.
The pricing policy may realize the full diffusion
of EMOS five years earlier than BAU.
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10. Process for estimating the mitigation at sector level
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11. LCT of cement industry covered in this analysis
No.
Technology lever
Process
Name of technology
Code 1
Energy efficiency improvement
Raw material and fuel preparation
Vertical mill for raw materials preparation
T01 2
Roller press grinding system for raw materials preparation
T02 3
Vertical mill for coal preparation
T03 4
Clinker making
Efficient pre-heating and pre-calcination system
T04 5
Efficient pulverised coal burner
T05 6
Enriched oxygen combustion technology
T06 7
Fourth generation clinker grate cooler
T07 8
Efficient insulation materials technology
T08 9
Waste heat recovery power generation (WHR)
T09 10
Cement grinding
Ball mill and roller press grinding for cement grinding
T10 11
Vertical mill for cement grinding
T11 12
Cement grinding aids
T12 13
Whole process
Motor system frequency control retrofit
T13 14
Energy saving management and optimization system (EMOS)
T14 15
Alternative fuels and raw materials
Alternative fuels
T15 16
Alternative raw materials (carbide slag)
T16
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12. Statistics and prediction of cement production in China
Prediction result of clinker/cement production in China (by CCA)
Historical change of cement demand in Japan
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13. Distribution of NSP kilns by the scale
27.0%
39.2%
33.8%
2.1%
57.6%
34.0%
6.3%
3.5%
63.4%
32.5%
0.5%
10.0%
80.0%
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14. Simulated technology diffusion curves at BAU (examples)
Electricity saving technologies: T01 to T03
Coal saving technologies: T04 to T08
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15. Calculation results of emissions in various scenarios
2020: 6.2%
TFS: Technology frozen scenario;
BAU: Business-as-usual;
S01: 60 Yuan/t-CO2; S02: 100 Yuan/t-CO2
2025: 8.8%
2030: 10.2%
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16. Technology abatement costs under S01
Technology MACs under S01 in 2020
Technology MACs under S01 in 2030
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17. Summary
This study estimates the effects of carbon pricing for carbon mitigation in China’s cement industry;
Cement production in China experienced fast growth and is now to plateau over next few years;
The energy saving low carbon technologies covered in the analysis are at different diffusion stages;
Full diffusion of energy saving technologies usually takes years after initial commercialization;
There remains certain technology mitigation potential in China’s cement sector;
A moderate carbon price would generate very limited effect in CO2 mitigation;
Most of the technology mitigations can be achieved at the low abatement costs.
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18. Thank you for your attention!
Contacts:
Xianbing LIU
KRC/IGES
Tel:
Fax:
E-mal:
URL:
22-23 October, 2016
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