The CO2 abatement cost curve for the Thailand cement industry
Introduction
The cement industry is responsible for approximately 5% of global anthropogenic carbon dioxide (CO2) emissions (Hendriks et al., 2004). Atmospheric concentrations of greenhouse gases cannot be stabilized without addressing this important emission source. The cement industry emits around 0.9 tonnes of CO2 for every tonne of Portland cement produced. This emission comes from both energy use and the calcination process, which is a chemical reaction in the kiln. The specific CO2 emissions of cement production depend on the fuel mix and clinker to cement ratio that varies from 0.5 to 0.95 (Hendriks et al., 2004).
As a result of the significant emissions per unit of cement produced, emerging climate change policies have the potential to place the industry at significant financial risk (Mahasenan et al., 2003). Therefore, there have been many studies worldwide identifying a wide variety of sector-specific and cross-cutting CO2 emissions reduction and energy efficiency improvement opportunities for the cement industry.
Worrell et al. (2000) at Lawrence Berkeley National Laboratory (LBNL) carried out a comprehensive study on CO2 emission reduction and energy efficiency opportunities in the U.S. cement industry. LBNL has also developed a guidebook that includes a long list of energy efficiency improvement technologies and measures which are commercially available for the cement industry (Worrell et al., 2008). Different analytical approaches have been used to study CO2 emission reductions and energy efficiency in the cement industry. Anand et al. (2006) used a system dynamics model based on the dynamic interactions among a number of system components to estimate CO2 emissions from the cement industry in India in which they developed different CO2 mitigation scenarios. ICF International used a greenhouse gas (GHG) abatement cost curve for the cement industry in Brazil and Mexico to assess the effectiveness of sectoral approaches that could be used to address GHG emissions from the cement industry in those two countries (ICF International, 2009a, ICF International, 2009b). Chen et al. (2010) evaluate the environmental impact of the cement production including CO2 emission and its variations between different cement plants, using Life Cycle Impact Assessment (LCA). Huntzinger and Eatmon (2009) also used LCA to evaluate the environmental impact of four cement manufacturing processes: (1) the production of traditional Portland cement, (2) blended cement (natural pozzolana), (3) cement where 100% of waste cement kiln dust is recycled into the kiln process, and (4) Portland cement produced when cement kiln dust (CKD) is used to sequester a portion of the process related CO2 emissions. Their analysis showed that blended cements provide the greatest environmental savings followed by utilization of CKD for sequestration.
GHG abatement cost curves have also been developed for various industries and sectors in different countries. For instance, McKinsey & Company has developed GHG abatement cost curves for various sectors, including the cement industry, in several countries (McKinsey & Company, 2008). However, there is no sector-specific GHG abatement cost curve for the cement industry in Thailand. Thus, we used the concept of a “CO2 abatement cost curve” to make a bottom-up model in order to capture the cost-effective as well as the technical potential for CO2 emission reduction in the Thai cement sector.
The research questions addressed in this study are: 1) what is the potential for CO2 abatement from the Thai cement industry, 2) what technologies/measures can be used to realize that potential, and 3) what is the CO2 abatement cost. To answer these questions, the bottom-up abatement cost curve theory was used for the analysis. Extensive empirical data were collected from the Thai cement industry allowing us to construct the cost curve model to help answer the aforementioned research questions given the assumptions for our analysis described below.
This study aims to give a comprehensive and easy to understand perspective about the CO2 emission reduction potential and its abatement cost based on the bottom-up technology-level approach. This paper is a unique work and the first of its type in Thailand. It is also outstanding compared to the other international studies that use a similar approach since the ACC developed in this study contains larger number of technologies.
The approach used in the paper for the construction of a CO2 abatement cost curve for the Thai cement industry might be less dynamic compared to the approach used in a few other studies such as the one used by McKinsey & Company for the construction of GHG abatement cost curves in different countries (McKinsey & Company, 2008). The source of this difference is the type of assumptions taken in scenario development in the two studies. However, it should be noted that the abatement cost curve in our study is more detailed and includes more technologies and measures compared to that in the other studies. We have assessed the potential application of 41 abatement technologies and measures to the Thai cement industry, while the other studies evaluate just a few technologies. For instance, the McKinsey & Company studies include only three abatement measures in the GHG abatement cost curve such as clinker substitution and co-firing of biomass (McKinsey & Company, 2009).
Section snippets
Overview of the Thai cement industry
The cement industry in Thailand has 8 companies that were comprised of 14 plants and 31 kilns in 2006. A few kilns were decommissioned during 2007 and 2008. The clinker production capacity was 46.82 million metric tonnes (Mt) in 2007, whereas the cement production capacity was 56.302 Mt in the same year. In 2007, the actual cement production in Thailand was 29.98 Mt and the prediction for the actual cement production in 2008 is 29.61 Mt based on the forecast made by the Thai Cement Manufacturing
Construction of CO2 abatement cost curve
The work in this paper is focused on CO2 emission reduction by using the CO2 abatement cost curve (ACC) as the analytical tool. For details regarding data collection from cement plants and information on technologies used in this paper, see Hasanbeigi et al., 2010, Hasanbeigi et al., in press. The CO2 ACC used in this study shows the CO2 abatement potential as a function of the marginal CO2 abatement cost. The CO2 abatement cost can be calculated from Eq. (1) (McKinsey & Company, 2009).
CO2 abatement technologies and measures for the cement industry
The potential application of forty-one CO2 abatement technologies and measures to the Thai cement industry was assessed in this study. Table 2 presents the typical fuel and electricity savings (compared to typically installed, lower efficiency technologies), capital costs, and change in annual operations and maintenance (O&M) costs, and calculated CO2 emission reduction for each abatement measure along with the share of total production capacity of studied plants to which the abatement measure
Sensitivity analysis
In the previous section, we discussed how the chosen discount rate plays an important role in the analysis of CO2 abatement potentials. For this reason, we have conducted a sensitivity analysis for the discount rate parameter. In general, the CAC has a direct relationship with the discount rate. In the other words, reduction of the discount rate will reduce the CAC, which may or may not increase the cost-effective CO2 abatement potential depending on the extent of the change in CAC. Table 5
Conclusion
Given the importance of the cement industry, which is one of the most energy-consuming industries in Thailand with high associated CO2 emissions, this study attempts to understand the potential for CO2 emissions reduction in this sector and its costs. The bottom-up CO2 abatement cost curve (ACC) constructed in this study for the Thai cement industry to determine the potentials and costs of CO2 abatement by taking into account the costs and CO2 abatement of different technologies. The period of
Acknowledgment
Authors are grateful to managers and engineers in the cement companies that participated in this study and provided us the required information and data. We also would like to thank Ms. Somthida Piyapana, the director of the Thai Cement Manufacturing Association for her kind assistance. We are grateful to Prof. Apichit Therdyothin, Prof. Surapong Chirarattananon, and Dr. Peter du Pont for their comments on this study. Special thanks to Mr. Warut Chivamavin from ENCON Lab in Thailand for his
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