1. CO 2 Capture A Potential for the Cement industry? Preparing decisions for next steps

2. Executive Summary  Carbon capture and storage is perceived as a feasible technology  It is very probable that CCS post combustion can technically be available in the cement industry within the next 6 to 8 years, the development of the oxy-fuel technology will certainly take longer  ECRA members have to decide on ECRA CCS project phase III, which focuses on laboratory and small scales tests. It also aims to continue the work oxy-fuel technology.  ECRA members have to decide on a CCS post combustion test plant (pilot / demonstration). Some funding schemes require a decision to be taken already in 2009

3. Introduction (1/3)  CCS – todays view: Carbon capture and storage is perceived as a feasible technology  Global CCS vision 2050: IEA: In 2050 50% of all cement plants in Europe, North America, Australia, East Asia are applying CCS, 20% in India, China  Pilot and demonstration projects in Europe: Test plants of various sizes have been initiated  Carbon capture in cement industry: Current research results indicate a technical potential but at very high costs  The beginning debate about storage: All industries will be challenged by the public concern about storage  Legal and Regulatory Framework in Europe: Politically, CCS is seen as an measure to reduce CO 2

4. Introduction (2/3)  Potential road map for CCS in the cement industry: Ongoing research will be the decision base for a potential post-combustion capture demo- plant and parallel development of oxyfuel technology  A potential CCS Project – a multi stage project: A demonstration plant can only be based on experiences from a pilot plant as an integral part of the whole process  Potential for a test plant in the cement industry: A decision for a test plant in the cement industry is based on various pros and cons  Technical preference for a potential test plant: While oxy-fuel seems to require less energy, post combustion might be earlier available  Cost analysis based on three scenarios: Cost estimates still need to be refined but indicate avoidance costs between 30 and 80 €/tonne of CO 2

5. Introduction (3/3)  Research Agenda – ECRA CCS Project: ECRA started a CCS project in 2007 which has now reached the end of its second phase. It is now preparing a decision for the next steps  Proposal for ECRA‘s research phase III (autumn 2009 – summer 2011): -Work Package A focuses on the Oxyfuel process (Budget: 950 k€) -Work Package B focuses on the post combustion process (Budget: 840 k€) -Work Package B focuses CO 2 purification and compression (Budget: 160 k€) -Total budget for the three work packages including project coordination is 2.15 Mio.Euro (autumn 2009 – summer 2011)  Given very high investment and operating costs for CCS, public funding is imperative and various such schemes have to be explored  A tender should be invited from service providers of CCS technology in order to be updated on latest state of the art processes, costs, energy requirement etc.

6. CCS – todays view  Increasing pressure on global power sector to implement carbon capture in new installations –EU27, NAM, China –International Energy Agency (IEA) –Green NGO’s  Demonstration projects in power sector starting or on steam –USAseveral projects from recovery funds –EUprojects funded from recovery funds projects funded from auctioned emissions rights in EU ETS  General feeling that the technology for post combustion capture is available already –Amine absorption or other processes  Other sectors will have to follow –Cement industry on first row as sector with lowest potential to reduce emissions within existing processes Carbon capture and storage is perceived as a feasible technology

7. Global CCS vision 2050 IEA: In 2050 50% of all cement plants in Europe, North America, Australia, East Asia are applying CCS, 20% in India, China

8. Pilot and demonstration projects in Europe Test plants of various sizes have been initiated

9. CO 2 -Storage – examples of current and planned project

10. Carbon capture in cement industry  Research and Development –ECRA, with support of major cement producers and WBCSD/CSI –CIEC in California  Two possible routes –Oxyfuel technology with direct storage for new plants –Further research needed on reaction kinetics –New type of installation and equipment needed –Demonstration project(s) not possible before 2018/2020 –Post combustion capture for existing plants –Demonstration project(s) possible in a few years –Funding now available via recovery funds in EU and NAM Current research results indicate a technical potential but at very high costs

11. The beginning debate about storage  Increasing protests on local level against onshore storage of CO 2 in geological formations -Netherlands – Barendregt -Germany -Denmark  Offshore storage -Greenpeace against Sleipner field (May 2009)  A cement plant will be a minor source of CO 2 for storage, -Storage facility for only a cement plant will not be feasible -Cement industry should not involve itself in storage Storage is facility to be supplied by others: governments, oil company, etc. Transport to storage facility to be outsourced if possible Combination of exhaust gases with gases from other sectors recommended All industries will be challenged by the public concern about storage

12. Legal and Regulatory Framework in Europe  CO 2 Capture: Council Directive (96/61/EC) concerning integrated pollution prevention and control (IPPC Directive)  CO 2 Transport: Council Directive 85/337/EEC on the assessment of the effects of certain public and private projects on the environment  CO 2 Storage: Directive 2009/XX/EC of the European Parliament and of the Council on the geological storage of carbon dioxide  Liability: Directive 2004/35/CE of the European Parliament and the Council on environmental liability with regard to the prevention and remedying of environmental damage Politically, CCS is seen as an measure to reduce CO 2

13. Potential road map for CCS in the cement industry  Continue research and development –develop post combustion capture (especially with amines) and prepare upscaling of existing technology –stimulate research on Oxyfuel technology in cooperation with equipment suppliers  Prepare decisions for a test plant based on post combustion capture technology  Do not focus on transport and storage because –storage is not a specific cement industry issue –stakeholders concerns should be met separately in order not to undermine potential capture demo-plant implementation Ongoing research will be the decision base for a potential post-combustion capture demo-plant and parallel development of oxyfuel technology

14. A potential CCS Project – a multi stage project Laboratory test Pilot plant Demonstration plant A demonstration plant can only be based on experiences from a pilot as an integral part of the whole process 20092010201120122013201420152016 planning building operating

15. pro :  Cement industry is second sector in focus  Technology to be applied is “identical” to power sector (in the view of others)  Without involvement, others will decide what cement sector will have to do  cement industry must be able to express itself based on facts from test plant  CO 2 abatement costs will be covered by the prices for the certificate Potential for a test plant in the cement industry A decision for a test plant in the cement industry is based on various pros and cons contra :  global CO 2 emissions are dominated by the power sector  scaling effects suggest to concentrate on power plants and not cement plants  storage will not be accepted by the public  capture will never be possible at viable costs  a full scale demonstration plant will be expected to continue operation even if test results are not satisfying

16. Technical preference for a potential test plant While oxy-fuel seems to require less energy, post combustion might be earlier available Oxyfuel  oxygen enrichment has been applied to cement kilns  CO 2 from the combustion process is concentrated and “easy” to isolate  Kiln - including cooler - needs to be completely redesigned  new technology; retrofit or modifying of existing plant unlikely  high energy consumption for oxygen production Post combustion  available end-of-the pipe technology  up-scaling still pending, but retrofit seems possible  minimal impact on existing clinker process  pure CO 2 stream for compression and subsequent treatment  very high energy consumption for amine- stripper

17. Cost analysis based on three scenarios Post combustion Oxyfuel Pilot plant Demonstration plant CO 2 capture rate [CO 2 /a] 100.000900.000800.000 Investment costs [M€] 34100 - 300344* Operating costs per CO 2 avoided [€/t] 3040 - 8033 Comments Based on Brevik kiln Excess heat from cooler and preheater used, no extra power plant required Based on studies from GassTek, Mahasenan and BCA/IEA Assuming full scale plant to capture 100% of kiln’s CO 2 Assumes new kiln *Investment costs include kiln including capture plant Cost estimates still need to be refined but indicate avoidance costs between 30 and 80 €/tonne of CO 2 all figures subject to uncertainties

18. Research Agenda – ECRA CCS Project Study about Technical and Financial Aspects of CCS Projects, Concentrating on Oxyfuel and Post-Combustion Technology (summer 2007 – summer 2009) Phase I Phase II Phase III Phase IV Phase V Literature Study (January - June 2007) Laboratory-scale / small-scale research activities (autumn 2009 – summer 2011) Pilot-scale research activities (time-frame: 2-3 years) Demonstration plant (time-frame: 3-5 years)  ECRA started a CCS project in 2007 which has now reached the end of its second phase. It is now preparing a decision for the next steps 

19. Next steps (1/2)  EU Funds: –European Recovery Fund (EEPR) focuses on specific projects only, tenders from equipment suppliers need to be submitted until end of June.  not applicable to cement –Co-financing of CCS under ETS (NER 300) requires 500kt CO 2 /a to be captured and must implement transport and storage. Deadline for proposal end of 2009.  clarification needed, if pilot plant can be funded to start with; ECRA inquires details at EU-Commission’s stakeholders meetings -EU’s seventh framework programme (FP7)  research might be funded, next call that could be suitable will be launched only in summer 2009; ECRA keeps track of developments  National funds, in this case from Norway: –HeidelbergCement (Norcem) will contact Norwegian institutions (oil/energy ministry to tentatively explore funding possibilities. Very high cost for CCS make funding imperative; irrespective of funding schemes final decision on test plant to be taken by the cement industry.

20. Next steps (2/2)  Without prejudice to the cement industry’s final decision some actions should be taken now: –Inquire funding potentials with in the EU and regionally i.e. Norway  action will be taken by ECRA and HeidelbergCement/Norcem –Coordinate a possible funding scheme within the cement industry  since all funding schemes require at least some contribution from the industry, ECRA should explore potential contributions from its members.  action will be taken by Daniel Gauthier and the Technical Advisory Board –Prepare a tender invitation for service providers of CCS technology in order to be updated on latest state of the art processes; key issues have to be investment requirement, energy demand and process/scrubber design  action will be taken by ECRA  Final decision to be taken by ECRA members on 5 October 2009 In autumn ECRA i.e. the cement industry has to finally decide about a CSS project; equipment suppliers should be invited to give technical input