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8/8/2019 Batelle Full

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A A A A B C

C

ater egime of the Area n se instnces inin dvesely ffectsthe wte esuces f the ein becuse f cntinuus dwin dwnf und wte duin excvtin s well s siltin f excvtedteils in sufce wte bdies ny ines extend belw the wte tble kin uin n intel t f inin ctivity ewtein f the su lwes the wte tble tes tken include ivinechin f the wte tble in the e nd dillin f dee be wellsf eul suly f wte t neihbin ultin

oise ise llutin is effectively ddessed by tkin the fllwinstes vidin sundf ddin wheeve ssible iely intennce f lnt nd vehicles ectin bundy wlls bffle wlls nd wste bnks s

custic bies evelin eenbelt und the ine e ctin esidentil settleent in n uwind diectin wy

f the inin eises whee ssible ibrations lstin is used f bekin the insitu ck f

excvtin esues effectively dted t educe undvibtins include ined esnnel ef blstin with exets vidin

uidelines eidic ecdin f blst vibtins ixed dy nd tie blstin with i ntice t the lcl

ultin se f illisecnd dely detnt deck chin the

techniues t educe vibtins nd nise nd

se f new euient like sufce ines tht d nt euieblstin s n initil ck fenttin ethd

lstin ctivities cn hve netive icts n biteuentil blstin nd liitin the size f blstin nd vidinblstin t ties when bids bts the ibne cetues elikely t be ve ne the ine hels

ust ollution ust is eneted duin blstin ldinunldinnd tnsttin f w teils f ines t the lnt hefllwin esues e bein tken duin inin s well stnsttin nd duin f vebuden sil nd liestne in stlnts se f dills with dust extctin se f wet dillin syste

inklin f wte while unldin teils in the cushe he ust suessin nd extctin fcilities t the cushe nd

vius tnsfe ints in the teil hndlin cicuit nd te syin n hule ds in the ine

tage ite Closurectices eltin t esttinnd ehbilittin f the inine fte site clsue vy widelynd e fund t be in use stlyif it hs been euied byenfceent f sttute essue f sciety nd fund ecnicl by the

cny

Agriculture and orestry estin sil fetility beces nitnt sect f the ine ehbilittin in instnceswhee icultue festy is the nticited stclsue use heeuse f tsil the vebuden stied ff the site befeexcvtin is itnt becuse it cntins seed bnk steinf the iinl veettin n the site

Biodiversity ehbilittin f ines f bidivesity hs twches t este the hbitt esent duin the eininste nd t cete “new” hbitts diffeent f the nes existin

befe cenceent f inin



A A A A B C

C

ealth and afety

evel isks e invlved with the ductin f ceent elth isks include dust ndteetue exsue cntct with lleic cnents nd txic substnces fety isksinclude nise exsue fllin buns exlsin nd tnsttin he in sfety ndhelth tics in the ceent industy eveent f incidence tes

esity diseses cused by dust

Cntct with lleic nd txic cnents

Accident tes eted by the le ceent cnies shw decese ve the lst fewyes weve lethl ccidents still hen cnic cnseuences f incidents ledin

t bsence f wk cn be le nd cn be used s n incentive f eventin Ceexestites the ecnic ict f the iveent in ccident tes t illin dlls n thecheicl industy wds e ften iven t lcl cnies tht ef with ze ccidentse illin wkin hus whees tet is nlly set t nube f ccidentse elyees fiue tht is nly within ech f the fntunnes in the ceent industyhe ceent industy histiclly hs eted incidence tes hihe thn the industies

n Ceex fulted tet f thei sfety efnce f t ets decese in the ccident te nube f ccidents e elyees in its ceent lntsve the eid f t his ccunts f ceent lnts lcted in cunties Accident feuencies f Austi eny nd nce e illinwkin hus cn be cnsideed s eltive hih Cients Clci t f the tlceentiu shws decese in feuency te f t ve eid f yes – whees ve the lst yes the fiues e stble nd n futhe iveent hsbeen chieved he n Ceent Asscitin ets the feuency te f the nufctuinindusty in t with stenth te nube f lst dysttl lb hus x f

ue t the ntue f the ceent nufctuin cess see tble in t ectin incidents nd ccidents with buns e e but d hen A study in yt ve the eid shws tht ccidents ccued n ultin f he ttl nube f wkin dys lst ws with en f dys e cse his study cn be seen s wnin t heihten sfety esues in the ceent ductin cess whee wkes cnce in cntct with ht clinke ceent wde

hile incidence tes e discussed in the et cehensive studies n the helth iskswee nt vilble in the develent f this et he fllwin discussin videsinftin eltin t tentil helth isks

xsue t dust cn cuse esity diseses A study in et indictes tht dustlevels nin f – hve been ecded in uies nd ceent wkswhees the edel esible dust stndd liits exsue t f n hu wkin shift n n individul cse t the sievin sttin level f ws eted nden fcties usin the wet cess the ue sht tie vlues e ccsinlly –

nd ice tehuse Ces “wd ustinble Ceent ndusty nvinent elth nd fety ubstudyet” httwwwwbcsdceentfinl_etss

bid

bid dn nd chfen ncycledi f ccutinl elth nd fety Chte Cnstuctin





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APPENDIX A:

SSuussttaaiinnaabbllee EEnntteer r ppr r iissee TToooollkkiitt





( T O W A R D A S U S T A I N A B L E C E M E N T I N D U S T R Y )

A-1

1. Using Tools for SDPursuing the recommended pathways toward sustainability will, in many cases, require cement

companies to alter their practices. This study has investigated a variety of available tools for supporting progress toward sustainable business practices and technical operations. Inaddition, several substudies have developed specific tools for use by the cement industry as itevaluates and selects practices to increase sustainability. Various individuals and groups withinan organization may use these tools. Some tools are more suitable for executive corporatelevel staff, while others are geared toward plant manager’s needs. The identified tools willcomprise a toolbox to support more sustainable practices.

2. Types of Tools for SD

The following summary represents recommended categories of tools that would comprise a

sustainable enterprise “toolkit.” For more information on specific tools, it is recommended thatthe substudy reports be reviewed. Wherever applicable, tools developed as part of this studyare highlighted and the relevant substudy is referenced. Substudies describe the specifics of using the tool and who would benefit from the use of such a tool within the industry.

2.1 Stakeholder Communicatio n and Involvement

Stakeholder engagement and dialogue are an important element of the recommendations.There is a significant body of knowledge regarding methods for industrial enterprises tocommunicate effectively with stakeholders regarding environmental and social concerns.

Tool Name: Communication and Stakeholder Involvement Guidebook

Intended Users: Cement plant managers, plant operations personnel, facility planners, andcommunications directors and staff.

Purpose: The guidebook, developed by Battelle and ERM during this study, is designed for I to help developand conduct effective communication and stakeholder involvement between the cement industry and itsstakeholders. The end goal is a stable, productive relationship between the cement industry and thecommunities and environment where they operate.

Description: The Guidebook is a resource that provides a background on the various forms of communica-tions, giving plant staff the foundations of communications theory and processes to understand the context of various kinds of communications that would be useful. The Guidebook provides information on the importance

of stakeholder involvement as a component of communications and examples of relevant cement facilitycommunications of each type.

It provides information useful in identifying which stakeholder groups should be involved in various types of communications. To establish a rationale for why communications and involvement is important, the guideprovides instances and characteristic events where the costs and benefits of communication and involvement,or the lack thereof, are described. It gives details and examples on when communication and stakeholder involvement should occur. For various types of events, it describes the overall process of building anddelivering the communications message, which can be tailored for the circumstances at a given site.



( T O W AR D A S U S T A I N A B L E C E M E N T I N D U S T R Y )

A-2

The Guidebook enables cement plant staff to understand the elements of Sustainable Development for both aplant level and corporate perspective, but more importantly it establishes the basis the connection with

communications and how a strong communications effort can reinforce and enhance the realization of other aspects of SD. It makes a case for defining and planning in advance what information is to be gained or shared and clearly distinguishes between public relations campaigns and conducting stakeholder involvement.

Finally, the Guidebook provides a wealth of case studies, from within and outside the cement industry. The17 cases internal to the industry covers specific events such as establishing a new facility, acquiring anexisting facility through a company merger, expansions of facilities, process changes, quarry operationschanges, decommissioning, plant tours, and responding to unexpected events. More general case studies oncorporate communications and using the staff as ambassadors to the community are also included.

Relevant Substudy for More Information: SS1/2 - Stakeholder Communications and Dialogue

2.2 Decision Support

In order to make progress toward SD, cement company decision-makers must be able create abusiness case for SD initiatives. They need a systematic approach to analyze the environmen-tal, economic, and social consequences of proposed capital investments and other importantbusiness decisions.

Tool Name: Sustainable Business Decision Framework (SBDF)

Intended Users: Business and investment analysts and decision-makers.

Purpose: The framework, developed by Battelle during the course of this study, provides a broader set of criteria, based on worldwide best practices, to improve decision-making and support development of acredible business case considering SD aspects for day-to-day decisions.

Description: The SBDF provides a way to systematically capture and analyze the SD implications of capitalinvestments or other important decisions. The framework supports the explicit identification of linkagesbetween SD achievements and the company’s ability to reduce costs, increase profits and build competitiveadvantage.

The framework was developed specifically for the cement industry, and includes consideration of SD impactsacross the operating cycle, from site development to cement production to plant closure and quarry rehabilita-tion. It was designed to mesh with existing cement industry decision processes and tools and can be custom-ized to the needs of individual companies.

The SBDF allows integration of SD into both tactical and strategic decisions and is intended to be used in oneof two ways: from a top-down perspective by senior management to help establish broad objectives and deci-sion guidelines that consider SD and from a bottom-up perspective for decision makers evaluating specificbusiness decisions.

The framework consists of a value matrix and an eight-step business case methodology. A User Manual wascreated to support the implementation of the tool. The analysis enables the assessment of stakeholder value – both enterprise value for the company and value for external stakeholders. Thus, it encourages decisionmakers to move beyond conventional financial analysis. Although some of the value linkages are quantitativeand others qualitative the framework integrates all of this information into a comprehensive “business logic” tosupport a given decision.

Several pilot applications were conducted to demonstrate that the framework is useful for a variety of cementindustry decisions.

Relevant Substudy for More Information: SS3 - Business Case (Note: The general philosophy behind thisframework was also discussed in Section 2 of this report.)






A-4

Cement companies can take actions to foster innovation in their companies by understandingthe drivers, barriers/obstacles, and enablers of innovation and developing process, product and

business strategy innovations.

Tool Name: SD Innovation Framework and Action Plan

Intended Users: Corporate R&D managers, business unit managers, human resources staff.

Purpose: Literature-derived factors that promote or hinder an organization’s capacity to innovate provided thebasis for Battelle to tailor a sustainability-focused innovation framework specific to the cement industry. A setof actions was identified to allow enhancements in how cement companies innovate in three areas, processes,products, and management systems, and to identify and implement changes.

Description: Cement companies will need to develop action plans for improving the nature and rate of their innovations. Battelle recommends a set of six actions to change the current innovation climate and processeswithin the cement industry:

! Soliciting innovation ideas: As a part of the alignment process around SD, companies will be explaining

sustainability concepts to employees at various levels within the company. This will provide a basis for developing ways for employees to offer suggestions for new product, process, and business conceptideas.

! Encouraging team thinking: Because innovation often is a team activity, creating or enhancing cross-functional interactions, job rotation, employee networks and mentoring around the area of SD should resultin a higher level of idea generation and cross-fertilization.

! Reward and recognize staff initiative toward sustainability-oriented innovation: A reward system designedspecifically to provide incentives for creativity and innovation related to SD should be tailored to differentcategories of employees and should consider benefits such as free time to work on an innovation that arenot typical. Conversely, barriers should be better understood. The disincentives need to be assessed andremoved.

! Conduct competitive intelligence and knowledge management: Seeking information about scientific,technological, and managerial innovations occurring inside and more importantly outside the companyneeds to be elevated in importance and integrated into the SD alignment and implementation process.Organized systems, including an enhanced emphasis on information technology, for technical intelligenceand environmental scanning, surveying customer needs, encouraging networking and supporting“communities of practice” around SD innovation are all needed.

! Manage the innovation stream: Improvements to the process of conducting “innovation” projects arerecommended to enhance and speed up the commercial implementation of new technologies or management practices are suggested. These are divided into two phases – the front end efforts to defineand conceptualize the ideas and the later project management activities to bring the innovation to fruition.

! Form partnerships directed at sustainability-focused innovation: Partnerships to promote collaborativeresearch and development will become increasingly important. Such partnerships would best be directedtoward pre-competitive research on both sustainable products and processes and could be conductedwithin the context of a formalized association or institute. It is also useful to develop relationships withother groups such as community organizations and regulators.

Relevant Substudy for More Information: SS7 – Innovation




A-5

2.4 Performance Measurement

Performance measurement is a critical capability for cement companies seeking to move towardSD. Cement companies will need to reinforce their long-term goals by using key performanceindicators (KPIs) that translate company-wide goals into operational targets. Cement companiesface numerous challenges, both in selecting KPIs at the strategic level and in implementingthese KPIs at the operational level.

Tool Name: SD Performance Measurement Process

Intended Users: Business unit managers, line supervisors, strategic planners.

Purpose: The process, recommended by Battelle, is a five-step process whereby cement firms canidentify key SD aspects, develop corresponding objectives and performance indicators, and flow these down

to the business unit and facility level.Description: A systematic process for selecting KPIs provides guidelines for conducting the following steps:

! Step 1 – Consider Stakeholder Needs. This step examines the needs and expectations of variousstakeholder groups and provides a useful starting point for identifying SD aspects and goals. It alsodescribes the utility of a baseline assessment of performance on previously established SD-related goals.

! Step 2 – Identify Important Aspects. This step provides a basis for identifying aspects and selecting thosethat are most significant in view of stakeholder expectations, emerging issues, industry trends and thecompany’s strategic goals. The process description provides examples of important linkages betweencement industry activities and known, potential or perceived SD impacts to support aspect identification.

! Step 3 – Establish Company Goals and KPIs. This step provides for selecting a high priority subset of those aspects identified in the previous step and establishing broad goals and KPIs for performanceimprovement. The process description provides examples for consideration.

! Step 4 – Select Performance Indicators and Metrics. This step takes the goals and KPIs from Step 3 and

determines how they will be implemented, including selection of focused performance indicators andcorresponding operational metrics. The guidance includes discussion of the translation process fromgoals to indicators and metrics and a candidate list of indicators and associated metrics specificallydeveloped for the cement industry.

! Step 5 – Set Targets and Track Performance. Although this is the last step in the process of KPI setting, itis the beginning of a continuous improvement process. Managers periodically establish measurabletargets and then monitor performance against the targets. The company should re-examine the goals andKPIs periodically as external conditions change. Guidance is provides on the number and characteristicsof the indicators and targets and on the nature of the on-going review process.

! The process includes suggested performance indicators specific to the cement industry.

Relevant Substudy for More Information: SS5 – Key Performance Indicators




A-6

2.5 Life Cycle Assessment

Building and construction specifiers, purchasers of materials, and other downstream customersin the cement industry value chain are increasingly demanding rigorous characterization of lifecycle environmental impacts. Life cycle assessment methods help in analyzing tradeoffs amongalternative processes and products.

Tool Name: Users Guide to Understanding an LCA Study

Intended Users: Product and process engineers, corporate communications staff, business unitdecision makers.

Purpose: The guide is intended to help identify the important elements of an LCA study.

Description: An LCA will include an inventory of the inputs and outputs of a product or service throughout itslife cycle and an interpretation of the results. It may also include impact assessment, in which inputs and

outputs are assigned to impact categories and used to provide indicators of the potential contribution to eachcategory. The study may also include an interpretation phase in which conclusions are drawn about the mostimportant impacts. The life cycle is generally defined from raw materials extraction (cradle) to final dispositionor recycling (grave) but may be narrower in certain cases. An LCA may be conducted on an individualprocess or service or may be comparative in nature.

The User Guide consists of instructions on becoming familiar with LCA terminology and how to fill in anevaluation checklist covering the basics of the study. Definitions are provided for about a dozen technicalterms that describe components or activities within the LCA so that readers who are not LCA experts canreview the study and complete the checklist. Finally, a checklist covering all of the important elements andquestions to be posed is provided. The checklist provides a comprehensive basis for assessing the coverage,completeness and characteristics of the LCA. It further allows a non-expert to test the adequacy of certaintechnical requirements, such as the scope definition, the data quality requirements of the inventory, themethods and results of the impact assessment. For comparative studies, the relative system descriptions,

functional unit usage and the differentiation of the systems being compared, can be assessed.

Finally, a filled in checklist for an actual cement-related LCA is provided to illustrate how one would use thetool and fill in the table.

Relevant Substudy for More Information: SS6 – Life Cycle Assessment




A-7

2.6 Eco-efficiency

Companies can benefit from tools that help them gauge progress toward eco-efficiency goalssuch as lowering energy or raw material use per tonne of product produced. These tools alsohelp connect technical considerations, such as eco-efficiency or energy reduction, to businessstrategies and goals.

Tool Name: Industrial Ecology Self-Assessment Tool

Intended Users: Strategic planners, business unit managers, corporate technical support staff.

Purpose: The self-assessment tool developed by Battelle provides a structured way for cementcompanies to measure the status of IE efforts within their organization and to analyze the extent to whichthese initiatives are integrated into the corporate business strategy.

Description: One of the key elements of the Industrial Ecology concept is the realization of value from

engagement in exchange of materials and energy with various partners. Such exchanges are greatlyenhanced if the practice of IE is part of the business strategy of the company or put another way if thebusiness strategy incorporates a strong IE component.

The self-assessment tool consists of a signal chart for gauging the status of the company on a number of dimensions of IE and a set of guidelines of completing the chart. The signal chart depicts three categorieslikely to be within a company’s business strategy –Management Practices, Operational Activities, andEnvironmental Aspects. Within each category are a number of elements. For each of the 17 criteria in thesignal chart, the tool describes varying levels of performance from absent or rudimentary (red) throughintermediate (yellow) to progressive (green). Descriptions of the characteristics of performance at a givenlevel are clearly and unambiguously presented so that a chart may be completed accurately and quickly.

Initial implementation or upgrading of an IE program is facilitated by use the signal chart to identify areas for further work and assess how comprehensive a program to pursue. The tool also provides commentary on theinterpretation of signal patterns that may emerge from the assessment process.

Relevant Substudy for More Information: SS9: Industrial Ecology




A-8

2.7 Policy Analysis

Analysis tools that make projections of future conditions under various sets of assumptions canbe used to study the economic and environmental impacts of various policy options. Thiscategory of tools can also help to frame alternative ways to achieve a policy objectives andsupport evaluation of the pros and cons of various alternatives.

Tool Name: Process Model for Policy Development and Influence

Intended Users: Corporate policy analysts, strategic planners, governmental liaison staff.

Purpose: The model developed by Battelle and ERM provides a basis for cement companies toinfluence policies on SD through involvement at various levels of policy development as it progresses frominitial conceptualization through implementation and monitoring of effects.

Description: Battelle and ERM crafted a step-wise process wherein a cement company can identify and

become involved in the creation, refinement and implementation of policies directed at SD. Activities in whichthe company and the industry should work collaboratively with other stakeholders are defined. The keyelements include:

! Identify and understand current policy – in this element the policies are identified within a given geo-graphic area that have the potential to be relevant to or affect the development or shaping of new policyaddressing an issue of interest

! Identify the key issues of concern – in this element, to provide additional focus, specific concerns withinthe policy area are identified. The report provides an extensive description of the current policy areas andissues facing the cement industry.

! Define policy objectives – in this step a clear set of objectives to orient subsequent activities and to pro-vide a basis for performance measurement are established.

! Identify the appropriate vehicle for developing, influencing, or promoting policy – this step involves theselection of those vehicles at the plant, company, or industry level that will need to be engaged to facilitate

the change.! Identify the range and specific stakeholders for the issue – in this element the stakeholder involvement

guidance of Substudies 1 & 2 is employed to identify which groups of external stakeholders are relevant,what types of interactions should occur, and how to clearly articulate, on the basis of these interactions,individually-held and commonly-held policy objectives.

! Help create policy – this step uses the best practices information developed in the study to assist in theputting forward of draft policies or policy positions.

! Support policy positions with credible data and information – this element identifies the types and potentialsources of technical information that may be used to inform the policy development process, includingother substudies conducted during the project.

! Communicate policy achievements – this step includes providing examples of how a policy has performedelsewhere or in the situation at hand and incorporates guidance from Substudies 1 & 2 on thecommunication process.

! Monitor policy effectiveness – periodic assessment of the degree to which the policy succeeds in meetingthe previously articulated objectives of the various stakeholders.

In addition to generally describing the elements of the policy development process, there is a worked exampleillustrating the application of the model for a specific case of climate change management in the cementindustry.

Relevant Substudy for More Information: SS13: Policy Instruments



APPENDIX B:

CCaassee SSttuuddiieess DDiir r eeccttoor r yy aanndd SSuummmmaar r yy






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1. Introduction

The various reports of this study have made extensive use of case studies to ensure that theissues and recommendations they present are grounded in experience. The final study reportprimarily uses short case studies to illustrate the main text with specific experiences and bestpractices in addressing SD issues. Each of these short case studies is based upon the widevariety of over 150 case studies found in the substudy reports. Most of these case studies aresimilarly short in length, while others are much longer and provide more in-depth, structuredanalysis.

This use of case studies is intended to enhance the overall value of the study in the followingways:

! Help ensure that concepts presented at an industry level are also relevant and tangible in aspecific, real-world situation

! Show the value of adapting general strategies for SD to the local context in which they willbe applied

! Facilitate a shared understanding of the challenges and barriers to SD faced by variousinternal and external stakeholder groups

! Present unique best practices and lessons learned that might be relevant elsewhere in theindustry

! Illustrate the interrelationships that often exist between multiple SD issues.

While many of the case studies focus on some aspect of the cement industry, case studiesrepresenting other industries have also been used throughout this study. To ensure that theobjectives described above are still met, examples from other industries were only used whenthe general activity or issue being shown would be highly relevant if applied within the cementindustry. To support this criterion, industries that have similar characteristics with the cementindustry (e.g., large capital investments, commodity products, etc.) have been favored whenidentifying case studies.

The sections of this appendix that follow include:

2. Directory of Case Studies: This section contains an index of case studies in three parts thatlists all case studies that appear in the different reports and where they are located.

3. Cross-Cutting Case Studies: This section presents a set of case studies developed incollaboration with several of the WGC companies to illustrate the relationships that exist among

multiple SD issues.

2. Directory of Case StudiesThe directory of case studies provides an index of many of the important case studiesdeveloped as part of this study (Table B-1). The following types of cases are included in thedirectory:

! all case studies that appear in the Final Study Report (regardless of length), and

! all “in-depth” case studies in the Substudy Reports.




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To find more information related to a case study described in the Final Study Report, first findthe section and page number in the first column. Because the directory organizes case studiesby the Substudy Report they appear in, finding the page number from the Final Study Report

may require scanning through the table. Once the page number is found, the second columnprovides the page number references to all versions of the case study that appear in the sameSubstudy Report.

Detailed notes on the directory:

! In-depth case studies are usually two or more pages long and provide a more structuredreview than other “short” case studies

! Most “short” case studies in the Substudy Reports do not appear in the directory. If one of these short cases is connected to another case study in the directory (for example, a boxedcase example in a Substudy Report that also appears in the Final Study Report) then itspage number will be added to the directory entry for the other case study.

!

Different versions of the same case study sometimes appear with different titles due to thenature of the discussion in the report where it appears. Where multiple names exist, thedirectory lists the title of the longest version of the case.

! In some instances, similar case studies appear in multiple Substudy Reports. Theserelationships are not referenced in the directory.

Table B-1. Directory of Case Studies

Location inIntegrated

ReportLocation in

Substudy Report Case Study Title

CaseStudy

Type(s)

Substudies 1&2Stakeholder Dialogue andCommunications Strategy

-- 2.2 Cement Industry Case StudiesApp A In-Depth Cement Case Studies

Site Level: RMC Rugby Cement, BarringtonPlant

Short,In-Depth

-- 2.2 Cement Industry Case StudiesApp A In-Depth Cement Case Studies

Industry Level: Cement Industry Federation of Australia (CIF)

Short,In-Depth

3.7 RegionalDevelopment

App C Cement Industry Case StudiesCommunication and Stakeholder

Involvement Guidebook for CementFacilities

Making Major Process Changes – Cimpor [Voluntary Agreement in Souselas, Alhandra,and Loule]

Short

1.5 Importance of Stakeholders

App C Cement Industry Case StudiesCommunication and Stakeholder


Changing Quarry Operations – Lafarge Short

2.7 CommunityWell-Being

App C Cement Industry Case Studies Staff as Ambassadors – Cimpor Short

-- App C Cement Industry Case StudiesCommunication and Stakeholder


Lampang Plant: New Cement Plant of SiamCement Industry

Short,In-Depth,

Cross-Cutting

Substudy 3 SD Business Case-- 3.3 Application to Cement Industry

DecisionsApp C Results of Pilot Applications

CEMEX – Business Case for Using PetCokeas Fuel at Torreon Plant

Short,In-Depth

2.9 Shareholder Value Creation

3.3 Application to Cement IndustryDecisions

App C Results of Pilot Applications

Holcim – Business case for Stakeholder Outreach

Short,In-Depth

-- 3.3 Application to Cement IndustryDecisions

App C Results of Pilot Applications

Italcementi – Business Case for Clinker Storage Options

Short,In-Depth





( TOWARD A SUSTAINABLE CEMENT I NDUSTRY )

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Report

Location in


CaseStudy

Type(s)-- App A Focused Case Studies Industrial Materials Exchange (IME) Tool In-Depth

2.2 ResourceProductivity

App A Focused Case Studies Industrial Symbiosis – Kalundborg, Denmark Short,In-Depth

-- 4.2 Incorporating IE in Business StrategyApp A Focused Case Studies

U.S. EPA’s Industrial Ecology Tool Kit(FaST/DIET/RealityCheck

TM)

In-Depth


3.1 Drivers, Barriers, & Current Status IEApp B Case Study

Alsen Cement and Salzgitter Steelworks Short,In-Depth


App D.3

3.2 Assessment of IE Practices inRelation to SD

App C Case Study

Toward a Zero Emissions Society:Contributions of a Cement Plant

Short,In-Depth,Cross-Cut

Substudy 10 Environmental, Health, and Safety3.3 Emission

Reduction

App D.3

Appendix CEMEX Ecoefficiency Program Short,In-Depth,

Cross-Cutting

2.6 Employee Well-Being

7.2 Toward an Occupational Safety &Health Management System

CEMEX Safety Management System Short


Background Document Third example Obourg (Belgium) – [Supporting the Case for Using Waste as Fuel ]

Short,In-Depth

3.3 EmissionReduction

3.4 Renewable Fuels Use of Secondary Materials at Rüdersdorfer cement works

Short

Primarily contains short case examples

Substudy 11 Land Use and Biodiversity2.7 Community

Well-Being3.1 Stakeholder Concerns Aboriginal Relations Short

2.5 EcologicalStewardship

3.2 Current Practices Quarry Management for Environmental andCultural Values

Short

-- App B Case Study Land use Minimization during Mine Operation – Andhra Pradesh Cement Works, Larsen &Toubro Ltd., India

In-Depth

-- 3.2 Current PracticesApp C Case Study

Land use Management during Siting of Cement Project – Chamba Cement Project,Larsen & Toubro Ltd., India

Short,In-Depth

-- App D Case Study Marine Conservation and Creation of Wetland – Cockburn Cement, Australia

In-Depth

-- App E Case Study Mine Restoration Simultaneous to Operation –Jaiprakash Industries Ltd., India

In-Depth

-- App F Case Study Quarry and Surrounding Land useManagement – Jalaprathan Cement,Italcementi, Thailand

In-Depth

-- App G Case Study Mine Rehabilitation – Railton Cement,Australian Cement Holdings, Australia

In-Depth

-- 3.2 Current PracticesApp H Case Study

Land use Management in Limestone MiningOperation – St. Constant Cement, Lafarge, CA

Short,In-Depth

2.5 EcologicalStewardship

App D.3

3.2 Current PracticesApp I Case Study

From Limestone Quarry to an EcologicallyDiverse and Economically Self-sustainingEcosystem – Bamburi Cement, Lafarge, Kenya

Short,In-Depth,Cross-Cut

Substudy 12 Socio-economic Development1.4 Forces of

Change &Barriers

App D.3

Appendix Privatization in the Egyptian Cement Industry In-Depth,Cross-Cutting




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Report

Location in


CaseStudy

Type(s)1.6 Linking Sust.

Development toBus. Value

App D.3

Appendix Lampang Project—Creating Enterprise Value In-Depth,Cross-Cutting

2.6 EmployeeWell-Being

App D.3

Appendix Rüdersdorfer Zement GmbH In-Depth,Cross-Cutting

The report contains short examples drawn from 10 large country-based studies not included in the substudy report.

Substudy 13 Public Policy Instruments

App D.3 5.1 Addressing Major PolicyChallenges: Policy ProcessRecommendations

App C Mini-Case Studies

Building Consensus Towards Sustainability:The Enlibra Principles

Cross-Cutting,

Short,

In-Depth,App D.3 4.1 Initiative 1: Create a Cement Policy

Institute

App C Mini-Case Studies

The Use of Life Cycle Costing for HighwayContracting in Canada

Cross-CutShort,In-Depth

-- App C Mini-Case Studies The United Kingdom’s Climate Change Levyand Carbon Taxes

In-Depth

-- App C Mini-Case Studies British Petroleum’s Climate Change Program In-Depth

-- App C Mini-Case Studies Brownsville, Texas Publicly InitiatedEcological Industrial Park

In-Depth

-- App C Mini-Case Studies Sustainable Development Dialogue onBuilding/Living (Sweden)

In-Depth

-- App C Mini-Case Studies Management of Construction and Demolition

Waste in the European Region (EU)

In-Depth

3. Cross-Cutting Case StudiesMost case studies in the Integrated Report are used to illustrate a single SD issue or topicdiscussed in its own section of the report. In reality, the key SD issues can best be understoodas parts of an interconnected web of relationships that link social, environmental, and economicissues in both positive and negative ways. For example, a single, integrated approach tobuilding positive relationships with the local community while also adopting the use of hazardouswastes as fuel will likely be more successful in achieving both objectives than developing

unrelated strategies with more focus.

Therefore, Battelle has collaborated with several Working Group Cement companies to developa set of in-depth case studies that illustrate some of their experiences in managing this form of complexity. These case studies are called “cross-cutting” case studies here because they“intersect” multiple issues. None of these case studies is truly unique in having connections tomultiple SD issues. Virtually any real-world situation involving SD issues represents acombination of issues at work and could rightfully be called “cross-cutting.” However, the casestudies have also been selected to work together as a set so that all together, they represent alleight of the “cross-cutting” case studies, and each of them connects a unique set of issues.

These case studies also have been selected to represent a variety of geographic regions and

WGC companies within a small set of case studies. This may make them especially valuable to




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anyone unable to access the other in-depth case studies in the substudy reports. To that end,additional information for each of these “cross-cutting” case studies is included later in thisappendix.

An overview of the cross-cutting case studies is presented in Table B-2 on the next two pages.For each case study, relationships between key SD issues are described and graphicallyrepresented using the form of the Sustainability Compass. The Sustainability Compass in thetable header serves as a key for the eight key SD issues. Note that at most three key SD issuesare shown for each case study, even when it clearly involves additional issues.

The rest of this appendix following Table B-2 includes summaries of each of the cross-cuttingcase studies.

Table B-2. Overview of Cross-Cutting Case Studies

Shareholder value

Regional development

Community well-being

Employee well-being

Ecological stewardship

Emission reduction

Climate protection

Resource productivity

#WGC

Company Case Study Country Key SD Issues

1 CEMEX Cemex Eco-Efficiency

Program

Mexico CEMEX identifies and implements improvements inresource productivity at plants worldwide to achieve

resulting in quantified cost savings (shareholder value). Improvements often affect working condi-tions and health and safety performance (employeewell-being).

2 Heidelberg ReductionPotentials of CO2 Emissions inAccordance withthe GermanIndustry’sCommitment 2000

Germany The Lengfurt plant’s use of alternative fuels and rawmaterials (resource productivity) contributes to asignificant reduction in its CO2 emissions (climateprotection). By implementing cost-effective reductionsin CO2 emissions, the cement industry is helpingGermany reduce the total economic costs of meetingnational goals for emission reductions (regionaldevelopment).






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Table B-2. Overview of Cross-Cutting Case Studies (Cont.)

Shareholder value

Regional development

Community well-being

Employee well-being

Ecological stewardship

Emission reduction

Climate protection

Resource productivity

#WGC

Company Case Study Country Key SD Issues

7 Taiheiyo Towards a ZeroEmissionsSociety:Contributions of aCement Plant

Japan “Through the unique ability of the cement industry toaccept many wastes and new technologydevelopments, Taiheiyo will become the nucleus for across sectional zero emissions network [emissionreduction] that is not simply a waste recycling plant,but also conserves resources [resource productivity]and contributes increasingly to the longevity of landfillsites.” Landfill shortages have become an importanteconomic issue for many industries and municipalitiesin Japan (regional development).

8 -- Privatization in theEgyptian CementIndustry

Egypt Significant market opportunities within Egypt hasattracted the interest of foreign investors who want tobuild a new plant or buy shares in a state-ownedcement company and enhance its value throughimprovements in management and efficiency(shareholder value added). These capitalinvestments could help fund environmentalimprovements to reduce the high emission levels of

some plants (emission reduction). Despite thesebenefits, many Egyptians fear that continuedprivatization will result in increased unemployment andforeign control of an important national industry(regional development).

3.1 Cemex Ecoefficiency Program

Company: CEMEXLocation: The program described in this case is a part of all CEMEX operations in 22 countries;examples from Mexico and Venezuela are used in this summary.For More Information: This summary is based on a longer case study by the same name

prepared by Battelle and included as an appendix in the Environment, Health, and SafetySubstudy Report.

Overview

CEMEX defines ecoefficiency as "efforts to optimize energy and raw material efficiency toproduce an economic and ecological benefit derived from a reduction of environmental impact."The company has achieved these benefits through the implementation of innovativetechnologies throughout its history, but in 1994 the CEMEX Ecoefficiency Program (CEP) waslaunched to systematically pursue further improvements and to share best practices betweenoperational facilities.




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CEMEX has expanded rapidly throughout the 1990s and is now the third largest cementproducer in the world. By rapidly applying CEP at newly acquired plants, CEMEX has been ableto grow its cost savings from ecoefficiency alongside the growth of the company. CEMEX

estimates that since 1994, it has achieved a total financial benefit of more than US$60 millionand has reduced CO2 emissions by 2.5 million metric tons.

Context

CEMEX’s first plant, constructed in 1906, became the first in Latin America to use rotating kilns.This early emphasis on technical innovation and operational efficiency has grown along with thecompany. Between 1976 and 1985, CEMEX invested in new production technologies at all of its plants and opened a new facility that made it the country’s largest cement producer.Overseeing the modernization program was Lorenzo Zambrano, who carried this experienceinto his new role as CEO in 1985. CEMEX expanded internationally with operations in threecountries by 1992. The pace of growth accelerated so that by 1999 CEMEX had operations in

22 countries and had become one of the three largest cement companies in the world.CEMEX’s rapid expansion multiplied the cost savings that could be achieved throughoperational efficiency and environmental performance. Because much of the expansion hasbeen through acquisition, achieving these benefits at the new plants has depended on CEMEX’sability to rapidly share and implement best practices between plants.

Actions

In 1994, what would become known as the CEMEX Ecoefficiency Program (CEP) was launchedas a program designed to leverage the experience and innovative capability of its technical andadministrative people to capitalize on opportunity areas that contribute to the company'secoefficiency. CEMEX defines ecoefficiency as "efforts to optimize energy and raw material

efficiency to produce an economic and ecological benefit derived from a reduction of environmental impact." The principal initiatives of this program include:

! Technological development and implementation for production processes, mining,and new plant design: CEMEX has included the environmental, health and safety functionas part of its technology organization, and EHS personnel take part in cross-functionalteams that lead research and development for new ecoefficient technologies. In 1995,CEMEX completed its Tepeaca plant, which features calcination preheaters, drying systems,process control systems, and other leading edge technologies. Tepeaca uses geostatisticaltechniques to develop precise quarry mining plans that optimize raw material extraction.These technologies lowered production costs to US$25 per ton compared to the industryaverage of US$35 per ton.

!Recycling and reuse of materials: The Tepeaca plant’s dust collectors and electrostaticfilters capture over 25 tons of dust each hour, creating a cleaner and safer work environmentfor employees. The dust is then recycled back into the production line.

! Use of natural cementing materials: At its Portugalete Plant in Venezuela, CEMEXevaluated the quality impact of dolomite as a limestone substitute. Based on the study’spositive findings, the plant has eliminated the need to dispose of 1,600,000 tonnes/year of solid waste when quarrying limestone. This has reduced pressure on municipal landfills,increased the life of limestone reserves by four years, and created costs savings of US$1,112,000 in 2000.

! Use of alternative fuels and raw materials: New technology for burning alternative fuels atthe Torreon Plant in Mexico has created $2.4M in annual cost savings and the substitution of




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370,000 tonnes of clinker with by-products, which represents a reduction of 296,000 tonnesof CO2 emissions.

! Promotion of an ecoefficiency culture: The empowerment and training of all personnel in

accident prevention and environmental protection is a basic component of the company’sEHS management systems. CEMEX encourages suppliers and community stakeholders topromote the multi-faceted benefits of ecoefficiency.

A Post Merger Integration (PMI) process is initiated for newly acquired operations, bringing ateam of experienced CEMEX managestogether to rapidly identify and implementchanges required to integrate the new plant.The PMI includes the implementation of CEMEX technologies and managementsystems that provide direct and oftenimmediate improvements in ecoefficiency.

Within three days of the acquisition, CEMEX installs a private data link into CEMEXNet, anIntranet tool that connect employeesworldwide using conversation groups anddatabases for different technical specialties

with information on problems, resolutions, benefits, and costs experienced at other plants.CEMEXNet is a key tool used both to share best practices with new plants and to continuouslyimprove ecoefficiency at existing operations.

Outcomes

In 2000, the activities of the CEMEX Ecoefficiency Program reduced the company’s total use of electricity by 160,000 MJ and saved 723,050 MM BTU in thermal energy, creating a reduction of CO2 emissions by 263,000 tons. CEMEX estimates that since 1994, it has achieved a totalfinancial benefit of more than US$60 million and has reduced CO2 emissions by 2.5 millionmetric tons.

Lessons Learned

The ultimate success of company’s expansion through acquisitions depends on its ability to addvalue to the newly acquired operation. The CEP is a key mechanism that CEMEX uses toimprove the operational, financial, and environmental performance of acquired operations. Thiscreation of value does not occur in only one direction, however. The value of a networkincreases as new members are added, and likewise each acquisition increases the value of theCEP to CEMEX as new knowledge resources are incorporated into CEMEXNet and other aspects of the program.

3.2 Reduction Potentials of CO 2 Emissions in Accordance with theGerman Industry’s Commitment 2000

Company: Heidelberg CementLocation: Lengfurt, Germany For More Information: This summary is based on a longer case study by the same nameprepared by Heidelberg Cement. This original Case study is available as an appendix to the

Financial Impact of the CEP in 2000

Million USDOptimized use of energy 9.2Optimized use of materials and

natural resources (including water)5.6

Use of alternative fuels and wastes 2.5Reduction of emissions and wastes 1.4Office paper recycling 0.05TOTAL 18.75




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Climate Change Substudy Report. (Note: The Oekopol Institute provided additional analysis of industry sectors other than cement.)

Overview

Reducing CO2 emissions has been a priority at Heidelberg's Lengfurt plant, which has beenmanaged by the company since 1923. In terms of heat consumption, Lengfurt is a world-classexample of a highly efficient kiln line. The Organic Rankine Cycle plant – the first plant of itskind in the German cement industry utilizes the waste heat of clinker cooler exhaust air and alsoallows alternative fuels to substitute for coal. Substituting by-products, such as blast furnaceslag, for clinker also dramatically lowers CO2 emissions per tonne of cement sold.

Context

Its central business principle of “partnership and ecological responsibility” has led Heidelberg

Cement to take an active role in several industry forums and business associations that promotesustainable development. Among other activities, the company helped initiate the voluntaryagreements of the German cement industry to help reduce greenhouse gas emissions. TheGerman cement industry has committed to decreasing its specific fuel energy consumption by20% from 1990 until 2005, and also to decreasing its CO2 emissions by 28% below 1990 levelsthrough the period 2008/2012.

In its own operations, Heidelberg is economical with natural resources and gives special priorityto saving energy and substituting native rock and fuels with recycled waste materials. TheLengfurt plant is one of six Heidelberg plants in Germany and is a standard-setting plantregarding the active approaches of environmental concerns. Originally founded in 1899,Lengfurt uses a wet process for grinding and a new generation kiln-line, installed in 1970, with a

double-string, four stage cyclone preheater, a rotary kiln, and a grate collar for recuperation of energy. In the 1980s, the plant began using waste oil and tires as a fuel substitute for coal.Today, the plant produces an annual capacity of 1.3 M tonnes cement and 1.1 M tonnes clinker,making Lengfurt one of the largest production sites owned by Heidelberg Cement.

Actions

Process improvements made at the Lengfurt plant since 1990 demonstrate several approachesavailable to the cement industry to meet its commitments to reduce energy consumption andCO2 emissions.

Usage of waste heat for energy co-generation: Some of the waste heat from the kiln gas was

used to preheat the raw meal, but the gas leaving the cyclone preheater was still as hot as350°C. Heidelberg Cement saw an opportunity to generate electrical energy with this wasteenergy using a new co-generation method called the Organic Rankine Cycle (ORC) Process. In1997 the company decided to implement this process in an industrial scale pilot plant.

Usage of alternative cement additives: Heidelberg has begun producing cement types with alower clinker content and a high content of recycled materials such as blast furnace slag. Theseblended cements allow the plant to reduce the costs and environmental impacts of clinker production for each tonne of cement sold.

Usage of alternative fuels and waste raw materials: Lengfurt has also adopted the use of various by-products and wastes, such as used sand from a foundry, as alternatives for raw




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meal. In 1997, the plant began using waste plastics as substitutes for coal in addition to wastetires and oil.

Other process improvements: Examples of process improvements that have increased theenergy efficiency of the Lengfurt plant include the installation of a roller press in 1990 and the1996 relocation of the quarry crusher to reduce transportation. Efforts to decrease non-CO2 emissions include the injection of ammonia solutions, a waste product of photo production, intothe exhaust gas. Through Selective Non-Catalytic Reduction (SNCR), these ammonia solutionsact to reduce NOx to N2 and O2, resulting in a decrease in NOx emissions.

Outcomes

Usage of waste heat for energy co-generation: The electrical energy generated by the ORC-plant has enabled Lengfurt to decrease its net electrical power demand per tonne of clinker production by 25.4% from 4231 KW to 3156 KW, an overall decrease of 12.0% for the plant. An

estimated 30,000 tonnes per year of CO2 had been emitted from German power plants to meetLengfurt’s power demand for clinker production. Lengfurt’s self-supply of electrical power hasreduced these CO2 emissions by an estimated 7,620 tonnes per year. The benefits of this pilotimplementation will be further extended as Heidelberg applies its experience in the design andoperation of an ORC-plant to some of its other cement plants.

Usage of alternative cement additives: In the cement types produced at Lengfurt, up to 70%of the clinker is substituted by additives such as gypsum, blast furnace slag, and other by-products. This substitution greatly reduces the consumption of limestone and energy and theCO2 emissions associated with the clinker content in each tonne of cement.

Usage of alternative fuels and waste raw materials: About 91,400 tonnes of alternative raw

materials were used in 2000 as substitutes for original raw materials, reducing the use of rawmeal by 5.5%. This substitution enabled Lengfurt to avoid the CO2 emissions that would havebeen created by decarbonization of this raw meal.

Other Process Improvements: Process improvements made since the installation of thecurrent kiln-line in 1970 have reduced the average heat consumption per tonne of clinker fromover 3.6 GJ down to 3.13 GJ, which is comparatively low for kilns of this type. Taking accountof all efforts to reduce energy consumption and to reuse energy produced, a thermal efficiencyof 80% is achieved in the Lengfurt plant.

Lessons Learned

While each plant will have a different potential for CO2 reductions based on a variety of technical, regulatory, and business factors, a general strategy of pursuing incrementalreductions while investing in the development of new technologies and process can achievesignificant long-term results for most plants, even those over a century old like Lengfurt.






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! In Ontario, the Ministry of Transport adjusted certain factors in its costing models basedupon the recommendations of an independent consultant. Calculations using theseadjustments proved concrete the more cost-effective material for high truck traffic roads. In

May of 2001, the first highway contract was awarded based upon this new model.

In both cases, the concrete promoters did not try to claim more of the market than scientificstudies found a basis for – only high truck traffic roads were targeted. Like many changes thatoccur in the political realm, the process of changing paving policy was an uphill battle againstwell-entrenched operating procedures. The concrete industry also had to counteract thepolitical clout of the asphalt industry.

Enlibra Principles

Initiated by the Western Governors’ Association (“WGA”), Enlibra is the name of an evolving setof new principles for environmental management designed to help resolve the increasingly

complex and urgent environmental and natural resource debates in an inclusive, fast and lessexpensive fashion than traditional policy approaches. Holnam recognized that stakeholder activists pressuring the company on AFR were likely to support a process that could achieveenvironmental objectives in addition to business objectives. In 1998, Holnam joined theadvisory committee of Enlibra and committed itself to the principles.

Actions

The eight Enlibra principles provide a means to demonstrate that progress is realized wheninterested parties are able to identify shared goals and collaborate. Examples of theseprinciples include “Reward Results, Not Programs—Move to a performance-based system” and “ Science for Facts, Process for Priorities—Separate subjective choices from objective

data gathering.”

Holnam has utilized Enlibra at its Trident Plant in Montana to address the issue of using scraptires as fuel for its cement kiln. Holnam contracted a third-party facilitator to design andimplement a community discussion process. The facilitator assembled a working grouprepresenting a cross-section of stakeholder interests and asked them to discuss the issuesassociated with using scrap tires as a fuel, to identify factual information, to identify peoplequalified to provide answers and finally to provide recommendations to Holnam.

Outcomes

Enlibra’s eight principles have thus far proven effective in helping to address environmental

issues at the Trident plant. The practicalities of greater participation in decision-making,focusing on outcomes rather than just prescriptive programs, and recognizing the need for avariety of tools beyond regulation to improve environmental performance, should address thecommunity’s fear of the unknown and lead to a greater understanding with the plant.

Lessons Learned

! Environmental policy making based on positive coalitions focused on producing netenvironmental gains can minimize the delays and wasted resources produced byconfrontational practices.

! Cooperative approaches to stakeholder engagement form positive relationships that create

ongoing benefits that often outlast specific issues under current negotiation.




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3.4 From a Limestone Quarry to an Ecologically Diverse & Economically Self-Sustaining Ecosystem

Company: Bamburi Cement Ltd., a unit of LafargeLocation: Mombasa, Kenya For More Information: This summary is based on a longer case study by the same nameprepared by Lafarge and HOLTEC. This original case study is included in the Land Use andBiodiversity Substudy Report as Appendix I.

Overview

Bamburi Cement, has rehabilitated its disused limestone quarries over the last 30 years,transforming them into an ecologically diverse and economically self-sustaining ecosystem.Rene Haller provided the vision to launch the project and the leadership to found and manageBamburi Farm, a company subsidiary responsible for the rehabilitation project. He used

indigenous species to colonize the former quarry, starting forest ecosystems that now supporthundreds of animal and plant species, including valuable hardwood timber trees and rare andendangered plant species.

In addition to funding for maintenance activities, various economic development programs usethese ecosystem resources to benefit the local community by providing them with employmentopportunities, food products, recreational activities, and increased local tourism. Theseprograms include timber utilization, an aquaculture system, and a variety of parks, trails,exhibits, and restaurants open to the public. Other outcomes that have created additionalconservation and business benefits include a conservation trust organization, partnerships withlocal, national, and international organizations, and corporate best practices that can be appliedat other sites.

Context

Bamburi Cement was built in 1954 at the Kenya coast near Mombasa In 1959, BamburiCement employed Rene Haller, an agronomist and landscaper, to beautify the land around thefactory and to use reserve lands to produce food for employees. During the 1960s and 1970s,more than 2 km2 of unproductive “secondary bushland” was cleared and quarried. During thisperiod, Haller’s agricultural project enjoyed the support of Government policy and the company’sfounder and grew until it employed about 100 employees, and was incorporated as a limitedsubsidiary of Bamburi Cement named Bamburi Farm. In 1971, Haller received managementapproval to start a rehabilitation project under the condition that it be economically self-sustaining, and this project was later integrated into the responsibilities of Bamburi Farm.

Actions

The evolution of the Bamburi rehabilitation project can be roughly organized into four phases:

! Phase 1 included the planning work for rehabilitation (which should be started as part of quarry site selection) and the handing over of excavated areas to the rehabilitation project.Haller planned for a long-term forestry program and a fish farming project with a fasteconomic return to fund the longer-term program.

! Phase 2 involved shaping the physical landscape to create features such as ponds and hillsand to prepare the land for planting.




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! Phase 3 was the main planting stage in which pioneer vegetation species are used tocolonize the quarry lands as a first step towards ecosystem development. Haller identifiedCasuarina equisetifolia as a promising pioneer species that could survive in the barren

quarry. Haller successfully cultivated these trees and then identified an indigenous millipedespecies that could feed on the Casuarina’s leaf litter, speeding humus formation.

! Phase 4 was focused on ecosystem development. Baobob Farm thinned the Casuarinaplantations to make room for new tree species selected for their potential economic value,their value in supporting forest biodiversity, and their status as rare or endangered species.Many animal species were introduced, or found their own way into the new ecosystem,helping to disperse the seeds of food plants.

After the rehabilitation work was done, Baobob Farm continued to maintain the ecosystems andused them for various educational and income-generating projects.

OutcomesThe former quarries now supports a complex ecosystem with forest, grasslands, and wetlandhabitats that support more than 350 species of indigenous forest plants, 30 species of mammals, 180 species of birds, and more than 30 species of butterflies. Several economicdevelopment projects now use these ecosystem resources to provide continued funding for maintenance activities, tourism attractions, and a variety of products, employment opportunities,and recreational facilities for the local community.

! Timber: Casuarinas poles are used as fence droppers, roof supports, and building poles or as firewood or charcoal. Kenya’s wood carving industry uses wood from other species.

! Aquaculture system: An integrated aquaculture system of fish tanks, quarry ponds, andrice paddies has been established to produce rice, Tilapia fish, and crocodile meat for local

markets, and crocodile skins for export.! Recreational Facilities: Visitors can walk through Haller Park’s lush forests, grasslands,

and wetlands and enjoy up-close views of the abundant wildlife and an on site restaurant.Opened in 1997, Bamburi Forest Trails is a network of walking, cycling, and jogging pathsthat also includes bikes for hire, a snackbar, and a butterfly house

Other outcomes have created additional conservation and business benefits:

! Baobab Trust: This offshoot organization works as a charitable conservation trust devotedto carrying out non-commercial activities in the field of conservation, including educationaloutreach activities such as tours, lectures, and courses.

! Stakeholder relationships: Bamburi Cement enjoys positive community support and has

formed partnerships with the World Wide Fund for Nature and the Kenyan government.! Best practices: In “Best Practice for Quarry Rehabilitation,” Lafarge has documented a

structured, four-phase process for rehabilitation activities as guidance for new projects.

Lessons Learned

! It is possible for quarry rehabilitation to create an ecosystem that is more economically andecologically valuable than what was present before quarrying began. However, the uniqueexample described in this case was only possible due the presence of a committed andvisionary leader, the support of top corporate management, and strong interest fromgovernment and community stakeholders.




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! In addition to creating environmental value, successful management of land use andbiodiversity issues can make significant contributions to community well-being and economicdevelopment.

3.5 Rüdersdorfer Zement GmbH

Company: RMC Readymix ZementLocation: Rüdersdorf, Germany For More Information: This summary is based on a longer case study by the same nameprepared by RMC and by ERM, the principal subcontractor which led the development of theSocioeconomic Substudy Report.

Overview

In 1990, RMC acquired the Rüdersdorfer works and began investing in an extensive investmentprogram involving major changes in production technologies, management practices, the sizeand skills of the workforce, and the relationship with the local community. These changes haveall been guided by a company strategy that aims to achieve economic gain throughenvironmental consideration and social responsibility. After ten years they have transformed theworks from an outdated, state-owned factory to one that is at the forefront of technology,innovation and environmental management.

Context

The Rüdersdorfer Zement works, located to the east of Berlin, have been producing cementsince 1885. In the former German Democratic Republic (GDR) the government-owned cement

works supported 3,000 jobs and were intrinsically linked to the local community. In addition toproviding full employment for the area, the company provided homes for employees, nurseries,crèches and youth clubs. The cement works had earned a reputation as “the nation’s championpolluter” with more than 5,000 tonnes of dust being emitted every year. In 1990, Rüdersdorfer was taken over by RMC’s German subsidiary Readymix AG, which responded to governmentincentives and regulatory pressure with an extensive investment program to modernize theworks and take advantage of new processes and technologies that could significantly improveits operating, financial and environmental performance.

Actions

The dramatic modernization that occurred during the 1990s has been achieved through new

programs and management practices that have redefined the role of the works with internal andexternal stakeholders and a considerable investment in new technologies.

Changes in Community Support and Engagement and Internal Management

! Workforce Reduction: A workforce reduction from 3,000 down to 700 employees andcontracting jobs was carried out as a partnership with the workers council. Older workerswere retired and other employees were given settlements and assistance with finding jobswith the company’s contractors and western German companies.

! Community Engagement: The works has used open days, environmental newsletters, thelocal press, and local council meetings to reach out to local residents who were never before




B-18

involved in discussions over development or environmental matters, creating more informalrelationships with the community based on mutual openness and trust.

! Community Support: The works sponsors a large number of local community activities

including sport activities, a local cultural centre, and a museum park that has become amajor tourist attraction for the area.

! Management Structure: New corporate objectives were established including addressingthe environmental impacts associated with the works and encouraging stakeholder dialogue.The works appointed officers for environmental management and plant safety andintroduced a formal environmental management system.

! Role of Employees: Responsibility for innovation is now shared across the company.Workers are encouraged to suggest continuous improvements, and about 300 are actedupon each year. Bonuses are paid based on the value of savings to the company, andrange from 200-300 DM to several thousand DM. The works also runs a 3½ year longapprenticeship programs for industry mechanics and electricians.

Investments in New Technologies

! Raw material extraction: Changes in quarrying methods have reduced visual, noise, andvibration impact, and a new central crushing plant and storage building for crushedlimestone have reduced dust emissions from the quarry.

! Air pollution control: About 60% of the 100 million DM spent for environmental protectionhas been used for air pollution control measures. Kiln line 5 became the first in the world tobe equipped with a circulating fluid bed gasifier for the utilization of secondary material,enabling this new kiln line to replace the output of seven old kilns and lower emissions of SO2 and NOx. A “fail-safe control system” is used to ensure plant safety.

!Noise abatement: The reconstruction of the works from 1992 to 1996 incorporated a varietyof noise barriers, acoustic treatments, silencers and other noise reduction equipment.

! Use of water: As a result of installing a cooling water circuit and building a rainwater-collecting tank, abstraction of surface water has been cut by two thirds. In 1999, 32% of thewater requirement was met with rainwater and re-circulated cooling water.

! Energy Management: New technologies implemented to reduce energy consumption haveincluded efficient pre-heater and clinker cooling technologies, the use of alternative fuels andraw materials, and renewable energy generation using wind turbines.

! Waste Management: The works tries first to reduce waste generation, and wastes are onlydisposed when they have no use as alternative fuels and raw materials.

Outcomes

The RMC Group has invested more than 500 million DM in the Rüdersdorfer works and hasreceived financial support from the Federal and Brandenburg state governments and supportfrom employees and the local community. All of these contributions have enabled thesuccessful transformation of the works into one of the most modern and efficient in Europe. Theworks provides RMC a return on this investment through its action-oriented management andempowered employees, enhanced operational and environmental performance, positivestakeholder relationships, and sharing of expertise with other RMC-Group plants.

Rüdersdorfer remains the largest employer in the area and continues to play an active role insupporting the community. Employees and local residents have been able to address their






B-20

Actions

To avoid a similar conflict, SCI began the project by identifying and engaging communitystakeholders, including local leaders, monks, private businesses, governmental and non-

governmental organizations, and the general public. Stakeholders were asked to identifyconcerns and to propose ideas for addressing those concerns. SCI developed systems tocollect, evaluate, and synthesize these suggestions into its planning process and communicateprogress back to stakeholders. The company arranged for local stakeholders to visit its plant inthe Central region to enhance their understanding of cement production processes andenvironmental management practices. Press conferences and press releases were used ascommunication channels to keep all stakeholders informed on the progress of the project.Finally, the community was encouraged to participate in a plant site selection process that wouldacknowledge the project’s investment costs to SCI as well as local impacts to the localenvironmental, economy, and society.

SCI incorporated this community input into its plans for the new plant, with a focus oncommunity development and environmental preservation.

Community Development

SCI responded to suggestions for community development by establishing a fund to supportsocial and environmental programs benefiting the local community. These programs haveincluded a variety of educational activities (school building construction, scholarships, andtraining), participation and support for local religious and cultural activities, infrastructuralsupport activities (water supply, traffic equipment, and hospitals), and a reforestation program.With the establishment and registration of the company at Lampang, all tax payments and other fees associated with the new plant would be directed to the local community. SCI committed to

hiring 70% of the plant’s workforce locally during the construction period and adjusted its longer-term hiring criteria to give local residents first priority.

Environmental Preservation

The plant’s design included a highly-efficient rotary kiln and the use of materials, such as fly ashand petroleum coke, to prolong the life of local raw materials and fuel reserves and also helpreduce the plant’s greenhouse gas emissions. Investments in high-efficiency dust collectorsand a closed-circuit water cooling system were planned to further reduced air and water emissions below regulatory requirements. An innovative, new quarrying method called semi-open cut mining was planned that would combine aspects of open pit mining and open cutmining. With this method, an inner crust is excavated while the outer inclined shell of the

mountain remains intact, preserving the mountain’s outer appearance and enabling promptrehabilitation.

Outcomes

The Lampang project’s integrated planning process established a collaborative relationship withstakeholders with a shared goal of enhancing the total value created for the plant and thecommunity. SCI was able to complete construction of the Lampang plant without any obstaclesarising from concerned stakeholders. Though the achievement of this goal has added newinvestment costs and operating expenses for the plant, it has also allowed SCI to avoid themany costs and delays faced by its power-plant predecessor. Business benefits that willcontinue into the future include the transportation cost advantages, access to large fuel




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reserves, reduced energy and material costs, and the positive relationships formed with acommunity that has recognized the Lampang plant as a model local company.

Lessons Learned

! Companies aspiring to continuously strengthen business operations and market growthshould strive to obtain the acceptance of society by committing themselves towards social,economic and environmental sustainability.

! Guiding principles and best practices for sustainable development are important to defineand identify at a corporate level, but their value will be greatly enhanced if they can becustomized to meet the unique needs and concerns of stakeholders for a specific businessinitiative.

! Some business benefits such as energy cost savings are realized from operational changesalone. Other significant benefits are based on improved environmental practices but require

effective stakeholder engagement and communication to realize their full business value.

3.7 Towards a Zero Emissions Society: Contributions of a Cement Plant Company: Taiheiyo Cement Corporation

Location: JapanFor More Information: This summary is based on a longer case study by the same nameprepared by Taiheiyo. This original case study is included as an appendix in the IndustrialEcology Substudy Report.

Overview

The Zero Emissions concept is aimed at eliminating waste emissions by creating industrialclusters that link the production processes of various industries, allowing wastes and by-products to be interchanged and effectively monetized and/or eliminated. The cement industryis uniquely suited to play a central role in multiple industrial clusters. Taiheiyo has implementedseveral different clustering relationships with other industries and municipal governments.Though they have all provided significant environmental and economic benefits and are basedon the same concept of industrial clustering, each of these examples had very differentenvironmental, economic, and regulatory drivers and required very different levels of technicalinnovation and stakeholder engagement.

Context

Due to a cement plant’s large capacity, high kiln temperatures, and ability to incorporatepotential pollutants into clinker, the cement industry has a unique ability to receive and safelyuse large amounts of waste. In addition to environmental benefits, the cement plant will oftenget paid for receiving wastes, with the producer still able to reduce its total waste disposal costs.

These concepts are particularly important in Japan, where 450 million tons of waste isgenerated annually, of which 90 million tons is required to be disposed of at final treatmentfacilities or landfill sites. With a diminishing capacity to dispose of waste at final treatmentfacilities, incineration provides an alternative, but incineration plants have been accused of emitting dioxins and usually have no useful output. Also, the remaining landfill capacity toreceive the ash generated from incineration will only last three years in the Tokyo Metropolitan




B-22

area, and seven years on average across Japan due in part to the country’s high populationdensity. New landfill sites are costly (~US$500 million) and often face local opposition.

Actions

At present, the Japanese cement industry annually receives 26 million tons of waste and by-products as alternative raw materials and fuel. There are many potential cluster linkagesbetween industry and the cement plant. Three examples for Taiheiyo Cement are:

! Desulfurization Gypsum: Cement plant power station cement plant

! Ecocement: Household waste incinerator cement plant

! CFC destruction: Household appliance municipality cement plant

Desulfurization Gypsum: The relationship between cement plants and the electrical power generation industry became established with the use of flue gas desulfurization equipment in

power stations to combat air pollution and acid rain. This technology can use calcium carbonatesupplied by the cement industry from their limestone quarries as a de-sulfurizing reagent. Theresulting spent calcium carbonate residue from the desulfurization process is calcium sulfate(gypsum), which is used as raw material for the production of cement.

Ecocement: Ecocement uses incineration ash or other waste materials such as sewage sludgeto replace approximately 50% of the cement raw materials. In Ecocement production, CO2

emissions will be cut by 50% and energy consumption by 11% compared to that of conventionalcement production. Taiheiyo began researching this linkage in 1992, and in April 2001 the firstcommercial Ecocement plant in Ichihara City, Chiba started operation, using ash from the localgovernment’s incineration of municipal solid wastes. Another plant is being planned in Tokyo.

CFC Destruction: Under joint research with the Tokyo Metropolitan Government, TaiheiyoCement was the first in the world to successfully destroy these ozone-depleting chemicals in acement rotary kiln. The system uses the rotary cement kiln into which CFCs, which have beencollected by the municipality at appliance dismantling centers, are injected. The kilntemperature of 1,450oC decomposes the CFCs within seconds of entering the kiln.

Outcomes

These three examples all demonstrate how it is possible for the cement industry to successfullybe at the center of an industrial clustering system.

! Desulfurization Gypsum: Thermal power plants and cement factories, through industrialclustering, have become indispensable to one another and play integral roles in each other’s

industries. The opportunity for this linkage was first identified by the energy producers, andfew technical changes were required for implementation.

! Ecocement: The cost of disposal of municipal incineration ash at an existing Tokyo landfillsite is around (US$250/tonne) excluding the cost of special treatment of fly ash containingheavy metals. Due to the significant environmental benefits and cost savings to themunicipal government, Taiheiyo has been able to obtain between 25% and 50% of theconstruction costs of the Ecocement plant from the Japanese Government (Ministry of Environment). In addition to the extensive research required to develop this technology,Taiheiyo faced additional challenges to implementing the first Ecocement plants, includingthe need to obtain the licenses and permission to use municipal waste and the need to haveEcocement added into the Japanese standards. Overcoming both of these challenges has

required extensive stakeholder engagement and communications.






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stimulating economic growth and supporting the nation’s urbanization and infrastructuredevelopment. Large-scale urbanization projects undertaken by the government, such as theToshka development plan, and growth in construction activities in the private sector have

created an increasing shortfall in the supply of Egyptian cement, which is being covered bycement imports. The high growth of cement demand reached its peak in 1998-1999 and thenfell down to 1% in 1999-2000, but a future recovery from this recession is expected.

Actions

In 1991, the Egyptian government introduced an economic reform program promoted by the IMFto help cut budget deficits and stimulate economic growth. With this program, the governmenttook a major step towards the privatization of industry by allowing manufacturers to set their ownprices and by introducing plans for the sale of 314 state-owned firms, including all eight cementcompanies. The Ministry of Public Enterprise (MPE) has faced many challenges andcontroversies as it has managed this program.

Employment: Privatization has often resulted in job losses as issues of excess employment incement plants are addressed by new management. To mitigate the social impact of these joblosses, the MPE has used a portion of privatization proceeds from each sale to fund the EarlyRetirement Scheme (ERS). Workers are eligible for this voluntary program if they are younger than retirement age but older than a specific minimum age (about 45 years old). The ERSprovides alternative housing and compensation of up to LE 35 thousand per individual. TheMPE has often used the ERS to help restructure a public company in preparation for its sale.For some private sales, the MPE also addressed this issue by obtaining commitments frominvestors that employment levels would be maintained as a condition of the sale.

Foreign Ownership: Early sales of ownership in public cement companies were usually to local

Egyptian investors and employee groups. The late 1990s boom in demand for cement attractedthe interest of foreign multinational companies and alleviated any concerns of local stakeholdersregarding foreign ownership, resulting in three sales of majority stakes to foreign companiesoccurred in 1999. The MPE usually favored offers from investment groups that included bothEgyptian and foreign investors, but the recession in 2000 revived concerns over foreign compe-tition, and the MPE was pressured to restrict sales to domestic investors. Many local investorslacked liquidity during the recession however. The Al-Ahram Cement company was created toprovide a local bidder for the sale of Amiriya Cement, but this action was viewed as a back-wards step for privatization because this company was owned by public sector companies.

Loss-Making Companies: The most efficient and profitable cement companies were among thefirst ones sold in order to take advantage of strong investor interest. However, this strategy led

to a residual set of public companies that were less profitable or even loss-making in 2000.These companies were a financial drain on government resources and were the most difficult tosell, especially with the poor foreign exchange rates at this time. The MPE decided torestructure each of these companies prior to sale to increase their profitability and increase their sale price, but potential investors protested this program as an unnecessary delay. Finally, theMPE used tax exemptions as an incentive for investors in loss-making public companies.

Air Emissions: Some sales were complicated by stakeholder demands to relocate the plantsaway from urban areas. The Egyptian Environmental Affairs Agency (EEAA) passed Law 4 in1994, which set restrictions on air emissions with a four year grace period. In recent years,community groups and other stakeholders have begun to demand more uniform enforcement of this law and increased transparency of environmental performance information. Egyptian




B-25

cement plants now use self-monitoring equipment, and the EEAA receives environmental datain real time and can monitor this data to detect any violations.

Outcomes

All eight companies are now at least partially owned by private investors, with 30% foreignownership by late 2001. Private investors have extended the financial capital required toimplement new managerial systems and technologies in order to modernize and expandexisting plants and improve their financial and environmental performance. Publicly heldcompanies have also improved their efficiency and profitability during this period. The MPEplans to continue privatization until 100% of ownership in the industry is privately held.

Lessons Learned

A company’s relationship with stakeholders is often influenced by their perceptions of the

industry as a whole. Many foreign investors have greatly improved the environmentalperformance of their plants and yet still were perceived by external stakeholders as being part of a highly polluting and problematic industry. Many participants in the Cairo stakeholder dialogueconducted for this study felt that cement companies had not historically taken steps to initiatediscussions with them on issues of concern. They expressed enthusiasm for having a forum todiscuss of issues of concern and to identify opportunities for continued dialogue with theindustry as a whole as well as with individual companies.



APPENDIX C:

CCeemmeenntt IInndduussttr r yy FFaaccttss aanndd FFiigguur r eess






C-1

1. IntroductionThis appendix provides additional factual and trend information about the performance and

characteristics of the cement industry. The purpose of this material is to supplement informationthat has been discussed in the body of the report. Information in this appendix will not includean analysis of the topics listed, nor opportunities for improvements, because these areas havebeen discussed in the project reports. For additional information, the substudy reports providemore detailed data and discussion. Copies of these studies can be downloaded from the projectwebsite at http://www.wbcsdcement.org/final_reports.asp, 2002.

Information in this Appendix is divided into two main parts, Industry Structure and Operationsand Environmental and Social Impacts. Both sections discuss the current status of the industry.The first part provides information on the production processes and types of cement products,and the second section provides additional insight into the current status of the industryregarding the environmental and social aspects.

2. Industry Structure and OperationsThis section provides an overview of the cement industry, including the process of makingcement, the products developed and their uses, trends in consumption and demand, and theimportance of the cement industry as it relates to economic development and employment.Specific financial performance for the industry is not included in this Appendix Cs the data topresent a thorough and comprehensive overview were not available. However, it should benoted that capacity utilization and the longevity of plants are important drivers in many industrydecisions.

2.1 Cement ManufactureThe cement industry in some regions is presently still using two different types of manufacturingtechnologies—vertical kiln technology (shaft kilns) and rotary kiln technology. The rotary kilntechnology, which requires a substantial investment, enables large-scale cement production.Small-scale cement producers often utilize the vertical kiln technology.

In a vertical or shaft kiln, fuel (coal) and raw materials are ground and fed to the top of the kilnwhile air is introduced at the bottom. In most countries, rotary kilns, which enable larger scalecement production, have replaced shaft kilns. However, in India and China shaft kilnapplications are still widespread and may continue to be built during the next decades (inaddition to small-scale rotary kilns). According to the Chinese government, in 2015 the Chinese

industry will produce 50% of its cement production using shaft kiln technology.

121

Additionally, there has been a tendency in many countries to move toward using larger kilns.Countries that have average capacities greater than 0.5 million tonnes generally have thenewest stock of capital. For example, countries such as China, Germany, Spain, and the U.S.are still using a significant stock of older equipment. Average kiln sizes for a variety of countriesare shown in Figure C-1.122

121Battelle, “Toward a Sustainable Cement Industry: Trends, Challenges, and Opportunities in China’s Cement Industry”,http://www.wbcsdcement.org/final_reports.asp, 2002.

122CEMBUREAU, “Best Available Techniques for the Cement Industry: A contribution from the European Cement Industry to theexchange of information and preparation of the IPPC BAT Reference Document for the Cement Industry,” 1997.

http://www.wbcsdcement.org/final_reports.asp








C-2

In addition to the types of kilns used in cement production, there exist four main cementproduction process routes – the dry, semi-dry, semi-wet and wet process – for rotary kilntechnology. In the past, it was easier to handle and to homogenize the raw materials when theywere ground to a slurry, especially raw materials that were set and sticky in their naturalcondition. Today, more advanced technologies are available to prepare homogeneous rawmeals in a dry process. The main advantage of a modern dry process over the wet process isthe far lower energy consumption, and consequently lower fuel costs.123 Therefore, there is astrong tendency to replace wet systems with dry options.

2.2 Cement Products

Cement products come in a variety of different compositions, but the most commonlymanufactured product is Ordinary Portland Cement (OPC). In Western Europe, for instance,43% of the output in 1994 consisted of OPC (Figure C-2). Blended cements, such as blastfurnace (slag) cements, contributed the majority of the rest of production.

123Battelle, “Toward a Sustainable Cement Industry: Environment, Health and Safety Substudy Report,”

http://www.wbcsdcement.org/final_reports.asp, 2002.

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

A v e r a g e C a p a c i t y , M

i l l i o

t o n n e s

B r a z i l

C h i n a

E g y p t

G e r m a n y

M e x i c o

S a u d i A r a b i a

S p a i n

U S

Figure C-1. Average Kiln Size for Selected Countries







C-3

In the U.S. production is dominated by OPC, and other types have a meager 6% share (FigureC-3). Standards in the U.S. tend to discourage blended cement since the standards are basedon the components comprising cement rather than the performance.

Apart from the types of cement produced, the flow of cement into various end uses differsamong regions. For instance, the relative use of cement for building construction in Europeexceeds that in the U.S. by a considerable margin, probably reflecting the volume of construction as well as preferences for specifying concrete construction (Figure C-4).

Blended cement

43%

Pozzolanic

cement

5%Blast furnace

cement

8%

Other cements

1%

cement

Portland

43%

Sources: CEMBUREAU, Cement Production, Trade, Consumption Data 1994-1997, World StatisticalReview Nos. 19 and 20, CEMBUREAU, The European Cement Association, Brussels, Belgium, 1999.

Figure C-2. Distribution of Cement Products, Western Europe

Sources: CEMBUREAU, Cement Production, Trade, Consumption Data 1994-1997, WorldStatistical Review Nos. 19 and 20, CEMBUREAU, The European Cement Association,Brussels, Belgium, 1999.

Figure C-3. Distribution of Cement Products, U.S.

Other cements

4.8% Pozzolanic cement

0.3%

Blast furnace cement 0.7%

Portland fly ash

0.5%

Other blended 0.2%

Portland cement

93.5%






C-5

The demand for cement varies by region, with rapidly developing economies typically having thehighest per capita consumption because of heavy investment in physical infrastructure. Ageographical breakdown of cement consumption is presented in Figure C-6.

Consumption of Cement by Region

China

37%

America

14%Europe

16%

Oceania

1% Africa

5%

Former US SR

3%

Asia (excluding

China) 24%

Apparent Consumption

AfricaAmericaAsia (excluding China)ChinaEuropeFormer USSROceania

World average

(Kg Per Capita)

91271173458416136310

259

Source: ERM, “Toward a Sustainable Cement Industry: Socioeconomic Development Substudy Report,”http://www.wbcsdcement.org/final_reports.asp, 2002.

Figure C-6. The Demand for Cement by Region (1997)

Cement consumption varies considerably across countries and time periods (Figure C-7). Asevidenced by historical and geographical trends, cement consumption is closely tied toeconomic growth. Countries with robust economic growth consume more cement as demandfor building construction and infrastructure development flourishes. In the short term, economicbooms and recessions determine the magnitude of increases or reductions in country-specific

cement use. In the long-term, however, growth in cement consumption as a function of economic performance levels off as service industries absorb an increasing percentage of economic growth in mature economies. Total cement consumption in China and in Post-WWIIWestern Europe increased markedly as economic growth fueled cement demand for buildingand public works construction.124 Cement consumption in the U.S., and more recently inWestern Europe, has leveled off.125

124“The Global Cement Report: Fourth Edition”, International Cement Review, 2000.

125Note that specific recent GDP data for Western Europe was combined with EU data; therefore, Western Europe is not included in

Figure C-4.







C-6

Figure C-7. Trends in Cement Consumption per Unit of GDP, 1970-1995

0

10

20

30

40

50

60

70

80

90

1965 1970 1975 1980 1985 1990 1995 2000

C o

n s u m p t i o n ( M t a ) / G D P ( M i l l i o n U

S )

China

India

Latin America

JapanUSA

Sources: CEMBUREAU, 1997, Unpublished data–ConsumptionWorld Bank

126

In the late 1990s, global trends, such as increased trade liberalization and industry

consolidation, combined with regional trends, such as the Asian economic crisis, shaped distinctimport and export patterns. In general, exports from Asian countries (particularly Thailand) rosesignificantly while those from European and Latin American countries as well as the U.S. either were stable or declined (Figures A-8 and A-9). As the Asian economic crisis enveloped manyAsian economies in the late 1990’s, some countries such as Thailand adopted a strong exportstrategy to maintain capacity utilization.

As an example of strong demand in a country running at peak levels of capacity, U.S. imports of finished cement more than doubled from 1997 to 1999. In 1999, the United States receivedimports of 22.86 Mt cement.127 Three countries contributed 49% of U.S. imports: Canada(18.8%), Thailand (17.5%) and China (13%).128 Other countries with significant importing,particularly in relation to consumption, include Egypt, Germany, and the UK. Egypt’s importtrend is anticipated to be downward as new internal capacity continues to come on line.

126The GDP data for China unlikely under-represent the value of services and therefore give the impression that the consumption of cement per unit GDP is considerably higher than that of the other countries shown. A. Maddison, “Chinese EconomicPerformance in the Long Run,” Development Center of the Organization for Economic Cooperation and Development, 1998.

127U.S. Geological Survey, 2000.

128 U.S. Department of Commerce – Customer’s Office (includes aluminous cement)




C-7

Source: “The Global Cement Report: Fourth Edition,” International Cement Review, 2000.

Figure C-8. Trends in Cement Exports129

CEMENT EXPORTS

0.000

5.000

10.000

15.000

20.000

25.000

30.000

35.000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

C e m e n t , M t a

China

Egypt

Germany

Thailand

United States

129130

129Other countries for which data were available, including Greece and Mexico, had less than one million tonnes of annual cementexports.

130Other countries for which data were available, including India, Mexico, and Thailand, reported less than one million tonnes of

annual cement imports

Source: “The Global Cement Report: Fourth Edition,” International Cement Review, 2000.

Figure C-9. Trends in Cement Imports130

CEMENT IMPORTS

0.000

5.000

10.000

15.000

20.000

25.000

30.000

35.000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

C e m e n t , M t a

China

Egypt

Germany

Greece

United States




C-8

2.4 Other Industry Trends

The industry has been consolidating over the past decade, although there still are many

hundreds of cement firms. The industry is becoming more concentrated as acquisitions,mergers and joint ventures occur on a regular basis.131 One measure of the consolidation of thecement industry within a country is called the “concentration ratio.” This measure shows thedegree to which the top five companies own the cement capacity in a region or country. Only afew companies will typically dominate the cement industry in small countries. However, larger countries vary in their ratios, indicating the influence of consolidation. The data in Table C-1indicate that the industry in certain countries, such as Greece, South Africa, and the UK, arehighly concentrated.

Foreign ownership also is a measure of globalization. As seen below, foreign ownership insome key countries, such as the United States, the UK, and Germany, exceeds 50%. From theperspective of SD, consolidation and globalization suggest that companies need to recognize

the important environmental and social aspects at the local and regional level and tailor their policies and operating practices accordingly in order to operate effectively under various politicaland stakeholder constraints.

Table C-1. Concentration and Foreign Ownership Ratios in SelectedCountries132

EstimatedConcentration

Ratio133

Estimated ForeignOwnership134

Brazil 80% 27%

China 3% 1%Egypt 63% 45%

Germany 58% 52%

Greece 100% 61%

India 42% 3%

Mexico 95% 0%

Russia 10% 0%

South Africa 100% 57%

Thailand 93% 12%

United Kingdom 99% 77%

United States 49% 89%

While globalization is a common theme in industry trends, improvements in productivity alsohave an impact on cement industry employment rates. The trend in employment per milliontonnes of output outside China is illustrated in Figure C-10 below. Although global data for employment impact of the cement industry are desirable, time series data on China (the largestcement market which has above average labor intensity) were not available. However, it is

131“The Global Cement Report: Fourth Edition,” International Cement Review, 2000.

132Ibid.

133Production capacity of 5 largest firms/cement capacity of country.

134 Where foreign ownership is >51%.




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estimated that employment in China was approximately 1,000 persons per million tonnes of output in 2000.135

As can be seen, the industry outside China has achieved considerable labor productivityimprovements in recent years and the trend is likely to continue. Fewer than half the number of workers per unit of output were required in 2000 than in 1980. However, it should be noted thatthe majority of the companies included in this data set were members of the major multinationalgroups in the cement industry.

While output per unit of employment has increased as a result of new investments andmanagement efficiencies, output has continued to grow. Within China, output has grownenormously, but often through the construction of small, inefficient and environmentallydamaging plants. However, recent years have seen the construction of larger, more efficientplants and the entry of foreign companies, which typically have higher productivity (and better environmental performance). While employment per unit of output continues to be to be four or

five times international norms, it is likely that these trends have reduced employment per unit of output in the Chinese industry.

Source: ERM, “Toward a Sustainable Cement Industry: SocioeconomicDevelopment Substudy Report,” http://www.wbcsdcement.org/final_reports.asp,2002.

Figur e C-10. Direct Global Employment per Million Tonnes of Output (Excluding China)

Figure C-11 presents estimates of total employment in the industry mapped against output datafrom Cembureau. Given China’s importance, the charts are presented with and without data for that country. As noted above, estimates of employment in China consist of only a snapshot in2000. Therefore, an estimate of a ten percent labor productivity efficiency improvement per decade was used to determine time trends in employment for China.

135Battelle, “Toward a Sustainable Cement Industry: Trends, Challenges, and Opportunities in China’s Cement Industry”,


272

555

527

146

-

100

200

300

400

500

600

1980 1990 2000 2010

Year

N u m

b e r E m p l o y e d p e r M i l l i o n

T o n n e s O u t p u t










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3. Environmental and Social AspectsThis part of the overview provides a description of the environmental performance of the

industry, including energy consumption and fuels used. This information provides a summary of the emissions and other interventions that have defined the environmental issues for theindustry.

3.1 Fuels and Energy

Among the most important aspects of cement plant operations are considerations of the energyused and the fuels consumed to provide that energy. Over the last decade, the process of clinker making has improved from the long dry process kiln with an energy consumption of up to5000 kJ/kg clinker to the (current state-of-the-art) dry, multistage cyclone preheater andprecalciner kilns with an energy consumption of 3000 kJ/kg.

From an SD perspective, the industry’s choices of fuels determine the consequences for notonly environmental emissions but also occupational safety and health and the impacts of transportation of the fuels to the plant. The use of alternative fuels, waste materials andrenewable biomass-derived fuels, have been on the increase, although conventional fuels stilldominate. The fuels most used are coal/coke and natural gas; see Figure C-12. From thefigure it can be seen that alternative fuels comprise about 10% of the total fuel input. Dependingon local circumstances, the fuel input of an individual cement factory can range from all virgin toprimarily alternative fuel.

Sources: U.S. and Canadian Portland Cement Industry; Plant information SummaryDecember 31, 1999; Australian CIF (Cement Industry Federation):http://www.cement.org.au/industry/Chap 3 Performance_right.htm page 8 CEMBUREAU BATReference Document - 1999-12.pdf;http://www.cembureau.be/Publications/TechnicalPublications.htm IPPC Reference document onBAT in the cement and lime manufacturing industries March 2000; Table 1-4.

Figur e C-12. Thermal Energy Sources In the Cement Industry

0%

20%

40%

60%

80%

100%

Europe

1995

Australia Canada US

Lignite

Alternative

Gas

Petroleum products

Petcoke

Coal

http://www.cement.org.au/industry.htm

http://www.cembureau.be/Publications/TechnicalPublications.htm

http://www.cembureau.be/Publications/TechnicalPublications.htm

http://www.cement.org.au/industry.htm




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The total energy consumption of the cement industry worldwide in 1994 was 6600 PJ. 137 According to the World Resources Institute, global energy consumption in 1999 was about400,000 PJ.138 Cement industry energy consumption thus equals 1.7% of the global total.

The cement industry is a highly energy intensive industry and the energy costs of cementproduction are substantial. Thermal energy and power each account for about 15% of the totalmanufacturing cost of cement. In China, energy costs accounted for roughly 40% of the totalmanufacturing cost in the early 1990s.139 As a consequence, there was an economic driver prior to an environmental one, for a reduction in energy consumption. Energy consumption inEurope, for instance, has been reduced in recent decades by about 30%, primarily by theintroduction of more advanced technologies. Further reduction of energy costs is realized bythe utilization of low cost fuels in the thermal process, such as coal residues and pet coke.Following this line, the next step is the introduction of other waste materials.140

There is ample literature and experience on the technical aspects of waste recovery in the

cement industry that shows, within technical limits, it is possible to recover waste in a cementkiln and maintain appropriate environmental limits.141 However, in dealing with waste, sometechnical limitations have to be taken into account; for example:

! the volatile metals – mercury, thallium, and cadmium – are not well entrapped and materialscontaining these metals should not be used unless additional measures are taken to preventemissions;

! inorganic wastes containing volatile organic compounds cannot be fed into the cold kiln sidedue to possible VOC emissions occurring without special control measures.

Some cement companies have gathered considerable experience and know-how with regard tothe handling of alternative fuels. CEMBUREAU states that, in 1995, 10% of thermal energyconsumption originates from alternative fuels, equivalent to 2.5 million tonnes of coal.142 Manyplants in the U.S. and Canada also use alternative fuels (see Tables A-2 and A-3). Websites of cement industries in Middle-and South-America and Asia indicate their growing interest in AFR.

Well-known examples of alternative fuels are:

! coal residues and tires;

! industrial or household sewage sludge (accepted, but its energy content originates from adrying process elsewhere);

! hazardous sludges such as paint sludge, processed into solid fuels for the cement industry,e.g., by mixing with saw dust;

! waste wood and impregnated wood;

!liquid hazardous wastes, spent oil and solvents, blended to a mixture with homogeneousproperties.

Plants operating on as much as 60% alternative fuel are reported. These alternative fuels areconsidered technically proven, in that their properties and handling methods are well known.

137Note: 1 PJ (petajoule) = 10

15joules.

138TNO and PricewaterhouseCoopers, “Toward a Sustainable Cement Industry: Environment, Health and Safety Substudy Report,”http://www.wbcsdcement.org/final_reports.asp, 2002.

139Battelle, “Toward a Sustainable Cement Industry: Trends, Challenges, and Opportunities in China’s Cement Industry”,http://www.wbcsdcement.org/final_reports.asp, 2002.

140The use of slag and fly ash for cement production from cl inker after the kiln is also important for energy reduction.

141TNO and Pricewaterhouse Coopers, Op. Cit.

142 CEMBUREAU, “Alternative Fuels in Cement Manufacture,” 1997.










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Their availability and attractiveness depend on the local environmental legislation and wastemanagement structures.

Table C-2. Distribution of Fuel Consumption (U.S. cement plants)Source: PCA, 1999 U.S. and Canadian Labor-Energy Survey.

1972 1995 1999Coal and Coke 36.1% 70.4% 74.1%

Natural Gas 45.1% 10.7% 6.5%

Petroleum Products 12.2% 1.0% 1.0%

Electricity 6.6% 10.0% 10.3%

Wastes 0.0% 7.9% 7.7%

Total Fuel 100.0% 100.0% 100.0%Based on MJ’s consumed

Table C-3. Waste Fuel Summary (U.S. cement plants)Source: PCA, 1999 U.S. and Canadian Labor-Energy Survey.

1990 1995 1999*

Total Plants Reporting 76 90 93

Plants using WasteFuel

25 48 51

Percent 33 53 55

Types of WastesFuels Utilized **

Tire Derived 9 23 35

Waste Oil 5 9 8

Solvents 4 2 12

Hazardous 2 2

Waste Derived Liquid 8 11

Other Solid Waste 11

Other 14 22 6* Waste Fuel Categories redefined** Plants may use more than one type of waste fuel

CO 2 Emission Trends

According to estimates made in the Climate Change Substudy, over the decade of the 1990s,global cement production increased approximately 20% while unit-based cement industry CO2 emissions decreased by ~1.5%.143 As discussed within the substudy and within this report, unit-

based emissions vary across regions from 0.73 to 0.99 kg CO2 per kg of cement.144 As a basisfor comparison, over the same decade in some other sectors of the economy, the intensity of energy use and associated CO2 emissions decreased by more than 10%.145 Thus, on anindustry-wide basis, the cement industry has a very modest level of CO2 emissions abatement

143Battelle, “Toward a Sustainable Cement Industry: Climate Change Substudy Report,”http://www.wbcsdcement.org/final_reports.asp, 2002.

144Based on an average of different cement types (OPC, Blended, etc).

145“Energy efficiency in the 1990s is generally accepted by the energy analysis peer community as having improved about ~1%/yr or 10% for the full decade. This is an estimated value, as energy efficiency improvement is not consistently measured on aglobal basis. Typically, energy intensity per GDP is the metric measured country-by-country and for the globe. However, thismetric includes effects in addition to energy efficiency (e.g., productivity improvement, shifts between manufacturing and serviceelements of the economy, and other factors). For example, in the U.S., energy consumption per GDP increased about 1.8%

during the 1990s, but only about half of this is attributable to energy efficiency improvement.”






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improvement. This is not to say that individual regions, companies or plants have not mademore substantial progress.

While the climate change substudy captures information on the current status of the industry,the focus is on future projections of CO2. Scenarios were used to represent a range of possiblefutures, and no scenario is necessarily more likely than another (though one can pass judgmenton which assumptions are more likely to hold true in the future). Using the projected cementdemand and current unit-based CO2 emission factors, future reference emissions wereprojected for each of the four scenarios (see Figure C-13 for an example using one scenario).This growth trend in emissions can be significantly slowed by taking the proactive stepssummarized in Table 3-3.

Figure C-13. Projected Global Cement Industry Reference CO2, Million Metric Tonnes146

3.3 Other Emissions

The subject of emissions from the cement industry is discussed in the project report. Thefollowing information provides additional information and context beyond what is provided in thetext. A considerable amount of additional data may be found in the EH&S Summary SubstudyReport.147 The emissions of the cement industry that require the most attention are emissions

146Projections are based on a scenario that assumes the income gap between developed and developing countries closes; theworld experiences rapid economic growth and low population growth; new and more efficient technologies are rapidlyintroduced; and the world has high per-capita energy use. Projected cement demand in 2020 ranges from 2.5 to 3.2 billiontonnes annually, depending on the scenario – Battelle, “Toward a Sustainable Cement Industry: Climate Change Substudy”,http://www.wbcsdcement.org/final_reports.asp, 2002.

147TNO and PricewaterhouseCoopers, “Toward a Sustainable Cement Industry: Environment, Health and Safety Substudy Report,”


0

1000

2000

3000

4000

5000

Baseline:

1990

Baseline:

2000

Baseline:

2010

Baseline:

2020

Baseline:

2050

Transport Emissions Fuel & Electricity Emissions Process Emissions










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into the air from the cement kiln. Wastewater discharge is usually limited to surface run off andcooling water. Contributions to water pollution are limited and site-specific. The storage andhandling of fuels is a potential source of contamination of soil and groundwater, although easily

controlled. The contribution of gaseous emissions released from the production of cement tototal emissions in countries of the CORINAIR90148 inventory is shown in Table C-4.

Table C-4. Contribution to Total Emissions of the CORINAIR90 Inventory (1990)

Contribution to total emissions [%]Source-activity

SO2 NOx NMVOC CH4 CO CO2 N2O NH3 Cement 0.8 2.3 <0.1% <0.1% 0.2 2.1 0.3 -

Power plants>300 MW

85.6 81.4 10.2 5.5 16.8 79.0 35.7 2.4

Incineration of Domesticor Municipal Wastes

0.1 0.2 <0.1% <0.1% 0.2 0.4 - -

0 = emissions are reported, the exact value is below the rounding limit (0.1%)- = no emissions are reported

Though the data are not current and only cover European data sources, the relative importanceof the cement industry’s contribution to emissions into the air is evident.

Table C-5 shows differences in emission limit values for waste combustion plants, power sta-tions and cement kilns. Cement kiln limits hold for waste co-incineration; the power plant valueshold in the absence of waste. If waste is co-incinerated in a power plant, a mixing rule can beused to calculate an average value between waste incinerator values and the presented values.

Table C-5. Emission Limits for Power Plants and Cement Plants in Europe with Energy Input Equal to100 MWth (mg/Nm3 at 10 vol% O2 unless otherwise stated)Source: “Best Available Technologies for the Cement industry-BAT Reference Document,” CEMBREAU, Brussels, Belgium,December 1999.

Component

Power Plant149

(100 MWth) Waste incinerator Cement Plant

Dust 22 10 30

SOx 620 50 50

NOx 300 500500 (new plants)

800 (existing plants)

Cd+Tl 0.035 0.05 0.05

Hg 0.035 0.05 0.05

Sb+As+Pb+Cr+Co+Cu+Mn+Ni+V 0.35 0.5 0.5

Dioxin 0.073 ng/Nm3

10 vol% O2 0.1 ng/Nm3 10 vol% O2 0.1 ng/Nm3

10 vol% O2

Despite the availability of options to avoid exceeding emission limits by proper process and dustcontrol, there is a trend toward application of additional abatement techniques. In the pastdecade, a wide range of technological options for emission reduction has been developed and

148CORINAIR 90 is a study of emissions of air pollutants in Europe, initiated by the European Environment Agency Task Force. Thestudy has attempted to produce a complete, consistent and transparent emission inventory for eight pollutants, derived frominformation about 31 countries/regions (the twelve EU countries, five EFTA-5 countries, ten PHARE countries and also Croatia,Malta and the former East Germany).

149 Emission limit values for power plants for SO 2 decrease with increasing capacity of 100 – 300 MWth for power plants. A

100 MWth cement kiln would produce approx. 2700 tonnes/day of cement.




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demonstrated. The most important type of equipment for emission control is the dust filter.Many metals, SOx, and Cl strongly adhere to the dust particles. With the latest dust filters, dustconcentrations down to 10 mg/Nm3 are achieved.

Examples of other techniques to ensure control of the emissions from the clinker productionprocess are:

! Low-NOx Burners (NOx Control)

! Multi-Stage Combustion (NOx Control)

! SNCR (NOx Control)

! Precalciner Addition of Slaked Lime (SO2 Control)

! Circulating Fluidized Bed Absorber (SO2 Control)

! Wet Scrubber (SO2 Control)

! Adsorption on Activated Coke (SO2, VOC and Heavy Metals Control especially for the

control of NOx emissions).Other end-of pipe solutions (e.g., scrubbers and coal filters) are becoming more prevalent tosolve local emission problems.

3.4 Land Use and Landscape Management

Cement is a mineral based industry and requires extraction of a large amount of raw material for its operation. On a global basis the reserves of limestone (and other minor mineral additives tocement) are sufficiently abundant that they are practically inexhaustible.150 Even in most local or regional instances, the reserve supply is expected to last several hundred years or more.

Although individual cement plants may eventually find that the local supply of limestone,gypsum, or clay is exhausted, mineral resource depletion is not a major SD issue for theindustry. This is not to say that efforts to substitute alternative raw materials are not worthwhile,only that the benefits of doing so are largely associated with other environmental or socialaspects.

Mineral excavation in the industry is done predominantly through surface mining in various typesof geographic settings. The mining activities as well as construction of a cement plant directlyinfluence the land use pattern and biodiversity. The cement industry affects land use andbiodiversity by way of:

! displacing current activities and the existing biological life on land to be occupied by theplant/quarry,

! degrading the land and the existing biological life during mining activities, and

! creating a land use in conflict with adjacent land uses and impacting the landscape bycausing a visual disruption of the landscape.

Many practices are in place to eliminate or mitigate the impacts of mining/quarrying, althoughtheir implementation varies from location to location (Table C-6).

150 U.S. Geological Survey, Mineral Commodity Fact Sheets - Limestone, 2000.




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Table C-6. Current Land Use Management Practices for Mining and Material Transport151

Life Cycle Stage Current Practices

Stage I: Siting

Siting criteria in different countriesare governed by concerns for protection of different naturalheritage features and regulationsthat require providing a safedistance between a sensitive siteand the proposed plant.

! Restraining the location of plants within municipal limits and within

specified distances from large cities/towns.! Restraining the location of plants within specified distances from wet

lands, national parks, sanctuaries and the core zone of biospherereserves, railroad and important roads (National Highways etc.),archeological monuments, national heritage sites, rivers, etc.

! Restraining the location of project within a specified distance fromhigh tide in coastal regions.

! Restraining projects in reserve/protected forest areas.

Stage II: Site DesignTo address the various mining andenvironmental concerns in their proper perspective, formulation of design plans is a common practice

in all regions. The monitoring andenforcement of adherence to theplan varies.

! Mining Plan. Preparation of a mining plan and its approval fromstatutory authorities for various raw materials (limestone, clay, shale,gypsum etc.) is mandatory in most places. The current regulations inmany countries require such mining plans to include addressing of environmental concerns.

! Environment Impact Assessment & Management Plan(EIA/EMP). EIAs/EMPs for the plant and mines are prepared toestablish the currently prevailing environmental conditions, to assessthe likely impact that the proposed project activities may cause, andto plan the ways and means by which the adverse impacts would beminimized. The documents also outline the post-project monitoringschedules to keep a check on the impacts. EIAs/EMPs aremandatory in most countries including members of the EU, the CIScountries, the USA, Canada, and countries of Southeast Asia.

! Public Hearing. In countries where a public hearing is mandatory atthe time of siting, the EIA is presented to the stakeholders. Thestakeholders are given an opportunity to make oral or writtensuggestions to the statutory authorities/project proponent at such ameeting. Discussion on each of the concerns takes place andobservations and remediation measures are recorded which form apart of the approval of the project.

Stage III: Site Operation Current practices for land usemanagement in mining operationsvary quite widely depending uponone or more of the following:! Location and geographic

setting! Type of mine: deep pit vs.

shallow mines! Economic considerations! Technological level of plant! Date of commencement of

mining, which defines theregulations that becomeapplicable, since newer andstricter regulations cannot beenforced retrospectively

! Varying regulations andvarying enforcement andmonitoring levels

! Land Use and Landscape Management. Cement companiesworldwide are taking various steps to minimize the impacts duringresource extraction. Simple management techniques include:

− developing the bare minimum area needed for mining andrelated activities at a given time during operations

− mine planning and optimization

− use of industrial wastes to replace natural resources to theextent possible.

! Visual Impacts. Surface mining is the most prevalent mode in the

cement industry. As pressures from the government and localcommunities increase, cement plants all over the world are adoptingthe following measures to minimize impact:

− Planting of trees around mining areas,

− Creation of landscaping stockpiles in the form of greenmeadows,

− Shielding the mining face of the hill from public view by erectingvisual barriers, and

− Mining from hill faces away from public view.

151Holtec et.al., “Toward a Sustainable Cement Industry: Land Use and Biodiversity Substudy Report,”






( TOWARD A SUSTAINABLE CEMENT I NDUSTRY )

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Water Regime of the Area: In some instances, mining adversely affectsthe water resources of the region because of continuous drawing downof ground water during excavation, as well as silting of excavatedmaterials in surface water bodies. Many mines extend below the water table, making pumping an integral part of mining activity. De-watering of the sump lowers the water table. Steps taken include improvingrecharging of the water table in the area and drilling of deep bore wellsfor regular supply of water to neighboring population.

Noise: Noise pollution is effectively addressed by taking the followingsteps:

− Providing soundproof padding wherever possible

− Timely maintenance of plant and vehicles

− Erecting boundary walls (baffle walls) and waste banks asacoustic barriers

− Developing a greenbelt around the mine area

− Locating a residential settlement in an upwind direction away

from the mining premises (where possible). Vibrations: Blasting is used for breaking the in-situ rock for

excavation. Measures effectively adopted to reduce groundvibrations include:

− Trained personnel perform blasting with experts providingguidelines,

− Periodic recording of blast vibrations,

− Fixed day and time blasting with prior notice to the localpopulation,

− Use of milli-second delay detonator, deck charging, or other techniques to reduce vibrations and noise, and

− Use of new equipment like surface miners that do not requireblasting as an initial rock fragmentation method.

−Blasting activities can have negative impacts on biota.Sequential blasting and limiting the size of blasting and avoidingblasting at times when birds, bats, or other airborne creatures arelikely to be over or near the mine helps.

Dust Pollution: Dust is generated during blasting, loading/unloadingand transportation of raw materials from mines to the plant. Thefollowing measures are being taken during mining as well astransportation and dumping of overburden soil and limestone in mostplants.

− Use of drills with dust extraction,

− Use of a wet drilling system,

− Sprinkling of water while unloading materials in the crusher hopper,

− Dust suppression and extraction facilities at the crusher andvarious transfer points in the material handling circuit, and

− Water spraying on haulage roads in the mine.

Stage IV: Site ClosurePractices relating to restorationand rehabilitation of the miningarea after site closure vary widelyand are found to be in use mostlyif it has been: 1) required byenforcement of a statute or pressure from society and 2)found economical by the

company.

Agriculture and Forestry. Restoring soil fertility becomes animportant aspect of the mine rehabilitation program in instanceswhere agriculture or forestry is the anticipated post-closure use. Thereuse of topsoil or other overburden stripped off the site beforeexcavation is important because it contains a seed bank stemmingfrom the original vegetation on the site.

Biodiversity. Rehabilitation of mines for biodiversity has twoapproaches: to restore the habitat present during the pre-miningstage and to create “new” habitats different from the ones existing

before commencement of mining.



( TOWARD A SUSTAI NABLE CEMENT I NDUSTRY )

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3.5 Health and Safety

Several risks are involved with the production of cement. Health risks include: dust andtemperature exposure, contact with allergic components and toxic substances. Safety risksinclude: noise exposure, falling, burns, explosion and transportation. The main safety andhealth topics in the cement industry are:

Improvement of incidence rates;

Respiratory diseases caused by dust;

Contact with allergic and toxic components.

Accident rates reported by the larger cement companies show a decrease over the last fewyears.152 However, lethal accidents still happen. Economic consequences of incidents leadingto absence from work can be large and can be used as an incentive for prevention. Cemexestimates the economic impact of the improvement in accident rates at 5 million dollars. In thechemical industry awards are often given to local companies that perform with zero accidentsper million working hours, whereas a target is normally set at 0.5 or 1% (number of accidentsper 100 employees), a figure that is only within reach for the frontrunners in the cement industry.The cement industry, historically has reported incidence rates higher than other industries.153

In 1997, Cemex formulated a target for their safety performance of 1%. It reports a 63%decrease in the accident rate (number of accidents per 100 employees) in its cement plantsover the period 1997-2000, from 4.4% to 1.6%. This accounts for 40 cement plants located in10 countries. Accident frequencies of 42 (Austria), 16 (Germany) and 11 (France) per millionworking hours can be considered as relative high. Ciments Calcia, part of the ItalcementiGroup, shows a decrease in frequency rate from 29,8 to 13,7 over a period of 12 years (1987 –1999), whereas over the last 2 years the figures are stable and no further improvement hasbeen achieved. The Japan Cement Association reports the frequency rate of the manufacturingindustry in 2000 at 1.10 with a strength rate (number of lost days/total labor hours x 1000) of 0.13.154

Due to the nature of the cement manufacturing process (see table in Part 2, Section 2.6),incidents and accidents with burns are rare but do happen. A study in Egypt over the period1991-1995 shows that 155 accidents occurred on a population of 3200. The total number of working days lost was 4,776 with a mean of 31 days per case. This study can be seen as awarning to heighten safety measures in the cement production process where workers cancome in contact with hot clinker or cement powder.

While incidence rates are discussed in the report, comprehensive studies on the health riskswere not available in the development of this report. The following discussion providesinformation relating to potential health risks.

Exposure to dust can cause respiratory diseases. A study in a 1998 report155 indicates that dustlevels ranging from 26–114 mg/m³ have been recorded in U.S. quarries and cement works,whereas the U.S. Federal respirable dust standard limits exposure to 2.0 mg/m3 for an 8-hour working shift. In an individual case at the sieving station a level of 384 mg/m³ was reported. Inmodern factories using the wet process the upper short time values are occasionally 15 –

152

TNO and Price Waterhouse Coopers, “Toward a Sustainable Cement Industry: Environment, Health and Safety SubstudyReport,” http://www.wbcsdcement.org/final_reports.asp, 2002.

153Ibid.

154Ibid.

155 Prodan and Bachofen, 1998:Encyclopedia of Occupational Health and Safety; Chapter 93-Construction.






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20 mg/m³. In the U.S. a study showed that in the manufacture of cement, concrete, gypsumand plaster products, 17.9% of the 252 samples exceed the PEL (Permissible Exposure Limit)of silica.156

3.6 Standards, Regulations and Policies

Three categories of policy instruments were defined to evaluate the status and trends in policyfor the cement industry:

! Command & Control Instruments: government regulations and permits

! Financial Instruments: taxation and market or trade mechanisms

! Self-Regulation and Voluntary Initiatives: company-level policy and community or globalagreements.

A summary compilation is provided below of where the industry currently stands and some of

the challenges in progressing to more sustainable policies (Table C-7).

Table C-7. Policy Issues and Trends Summary157

Policy Area Policy Issuesand Trends

Do the issues or trends generally

promote or constrain

sustainabledevelopment?

How is thecement industry

affected?

How arecement

companies or plants affected?

Are there anysignificant regional

differences?

What are thechallenges to

implementationby the cement

industry?Climate Change Climate change

policy is stillforming at both theinternational and

national levels. Allpolicy types arebeing proposed anda few tested.Policy initiatives areexpected to expandbut thepredominantapproach is not yetclear.

In general, climatechange policiespromote sustainabledevelopment since

they promote cleanand efficient energyover the long-term.

As a large generator of CO2, the cementindustry will besignificantly

impacted by futurepolicies. Somepolicies may beflexible andpositively impact theindustry; others maybe more constrictive.

Limited directimpact at present.

The European Union isleading policydevelopment, and hasrecently published plans

for a mandatory EU-wide trading regime.Other developedcountries, such as theU.S., have notcommitted to reduceemissions. Manydeveloping countries,while not subject toemissions limits, will beable to benefit frompermit trading under theclean developmentmechanisms.

New regulationsand programs toreduce theemission of CO2.

New regulationsand programs torestrict the use of carbon based fuelsor increase energyefficiency.

Product life-cyclerequirements maylimit productionmethods thatgenerate certainamounts of CO2.

Industrial Ecology Policy focus ismoving beyondemissions to theproduction processand product lifecycle. Greater integration of productioninputs/outputsamong industries.Increasing use of flexible policy tools.

Industrial ecologygenerally promotessustainabledevelopment.

Increased use of reusable andrecyclable materialsand decreased useof raw materials.Formation of industrial symbiosisthrough eco-industrial parks.

Potentialcompetitiveadvantages tohighly efficientoperations andpotential costreductions as aresult of “looping” of materials andavailability of governmentincentives.

Financial incentives,voluntary programs andtechnical assistance incountries movingbeyond command-and-control regulation.Development of eco-industrial parks beingdriven in some locationsby economicdevelopment needs.

Regulations andstandards thatrestrict thetransport and useof materials fromother industries.

Zoning regulationsthat limit eco-industrial parks or membership in aneco-industrial park.

156“Encyclopedia of Occupational Health and Safety,” Prodan, Bachofen, Chapter 93 ‘Construction’, 1998.

157Battelle, “Toward a Sustainable Cement Industry: Public Policy Instruments Substudy Report,”








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affected?

How arecement



differences?

What are the

challenges toimplementationby the cement

industry?Environment,Health and Safety(EH&S)

Traditional EH&Spolicies arecommand andcontrol (e.g.,emission limits,worker safety).EH&S policiesbecoming moreflexible andincorporatingfinancial and

voluntary programsto further reduceemissions.Expanding into newpollutants andactivities, includingclimate changegases.

In general, theypromote sustainabledevelopmentalthough may inhibitsome innovativeapproaches unlesscarefully crafted.

Existing EH&Spolicies havesignificant effect onindustry. Increaseduse of alternativefuels will increaseimpact of existingregulations. Newregulations that seekto reduce emissionsof both traditional

and new (e.g., CO2)pollutants will havestrong impact.

Increase in existingand new regulationswill requireincreased reporting,inspections, andstaff to addressthese newrequirements.Internal and costbased policies willrequire innovative

approaches andultimately couldresult in cost-effectiveimprovements tooperations.

EH&S regulations arerelatively similar acrossregions. Differences inenforcement and focusoccur at the countrylevel and are not relatedto regional differences.

New environmentalregulations andfinancialdisincentiveprograms toreduce emission of traditional andnewly-regulatedpollutants,including CO2.

New and existingenvironmental andsafety restrictionson the transport,storage, use, andhandling of bothconventional andalternative carbon-based or hazardous fuelsand raw materials.

Land Use andBiodiversity

Land use planningis moving towardwatershed or other natural boundariesrather than

geopolitical limits.Biodiversity policiesare emerging toprotect geneticdiversity and criticalhabitats, andcontrol invasivespecies.

Evolving land usepolicies likely topromote sustainabledevelopment on aregional scale;

biodiversity policiesmay force increasingconservation andconstraints onindustrialdevelopment.

Plant sitedevelopment andquarrying practiceswill be increasinglysubject to these

emerging policies,both throughregulation andfinancialinstruments.

Zoning, generally alocal matter, maybecome moreregional inapplication;

biodiversity policiesmay change impactassessmentprocesses andoutcomes. Plantimpacts on water resources may bemore closelycontrolled.

Land use and zoning isa larger issue indeveloped nations;biodiversity initiativesstronger in developing

countries having less-impacted species andhabitats.

Urban sprawl andthe increase of people moving intorural areas mayresult in new local

restrictions ontransportation,noise, fugitive dust,pollutantemissions, or material storage.

Policies on zoningand biodiversitywill become moreregional and mayrestrict expansionand plant siting.

Socio-economicIssues

Increasingpressure, vianational legislationand internationalagreements, onmultinationals tocontribute to socialand economicdevelopment of thecommunities inwhich they operate.

Promotessustainabledevelopment if applied equitablyacross socio-economic groupsand all threecomponents of sustainability(environment,economics, andsocial) areconsidered.

The cementindustry’s globalreach places it in awide variety of socio-economicsettings and it mustadjust appropriatelyto each.

Cement plants areoften a major localemployer, whichcreates significantlocal expectationsto contribute tocommunity well-being.

Level of economicdevelopment in acountry determinesrequirements placed oncompanies, andinfluences voluntarycontributions. For example, companiesoperating in developingcountries are muchmore likely to contributeto basic needs such ashousing, healthcare andeducation.

Zoning and other operationalrestrictions maylimit expansion andcontribution tolocal economies.

Investment in moreefficient andenvironmentalequipment andfacilities can resultin reducedemployment.




C-22







affected?

How arecement



differences?

What are the

challenges toimplementationby the cement

industry? Alternative Fuels Use of alternative

fuels regulated bycommand andcontrol regulationson transportation,storage, use, andemissions.Regulatorsconcerned that useof waste materials,as fuel may not

conform to wastemanagementhierarchy. Somefinancial incentivesdo promote reuse.

Use of somealterative fuels canpromote sustainabledevelopment.Others require life-cycle environmentalreview to confirmtheir benefit. Use of hazardous waste asfuel may not besustainable over the

long-term.

Current policies tendto inhibit use of some alternativefuels important tothe industry.General concern bythe public andenvironmentalcommunity on thetransport andincineration of some

materials.

Use of alternativefuels generallydecreases directcosts; yet use of hazardousmaterials canincrease worker exposure andcompliance costs.Relations withneighbors can

becomechallenging.Pollution preventionpolicies make fuelsupply sporadic.

Some countries aremore active inopposition to the use of hazardous alternativefuels, but no regionalgeneralizationspossible.

Regulations thatrestrict thetransport, storage,and incineration of different types of wastes.

Urban sprawl andzoning that maylimit thetransportation of

hazardousmaterials to aplant.

Product life-cyclerequirements thatlimit use of certainmaterials inproduction.



APPENDIX D:

SSttaakkeehhoollddeer r DDiiaalloogguueess SSyynnooppssiiss

Round 1: Curitiba, Brazil; Bangkok, Thailand; Lisbon, Portugal, and Cairo, Egypt;Round 2: Washington, DC; and Brussels, Belgium

November 29, 2000 – September 5, 2001






D-1

1. IntroductionThis appendix presents highlights of two sets of stakeholder dialogues conducted to support the

Toward a Sustainable Cement Industry project. (A more in-depth documentation of each of thedialogues may be downloaded from the project website at http://www.wbcsdcement.org/.) Thepurpose of the dialogues was two-fold, 1) to confirm that the SD issues identified for investigation in the study were the right ones for the cement industry and 2) to confirm that thesynthesis of findings and actions from the various studies was carried out in a meaningful andactionable way.

Round 1 Dialogues:Goal: To assess cement industry sustainable development issues from a diverse set of stakeholders. Event Locations: Each of the four events took place in different cities around the world,including Curitiba, Brazil; Bangkok, Thailand; Lisbon, Portugal; and Cairo, Egypt. These cities

were chosen because they represent areas of high cement manufacturing and yet are verydifferent in their cultures, levels of economic development, and geographic locations.Timeframe: Separate three-day events from November 29, 2000 to March 1, 2001.Engagement Process: Stakeholders were introduced during an informal setting, provided anoverview of the current SD issues, given a tour of a local cement facility, and presented a seriesof key questions to assess issues and to motivate dialogue in group settings. Expert facilitatorswere used to ensure the rigor and effectiveness of the process. Some one-on-one interviewswere conducted with stakeholders to supplement the findings in cases where key stakeholder groups were unavailable to participate in the event.

Round 2 Dialogues:Goal: To gain feedback on interim project results and to assess the coverage and feasibility of

recommendations.Event Locations: The two separate events took place in Washington, DC and Brussels,Belgium. These cities were chosen because they represent focus areas for policy andregulatory development and implementation organizations.Timeframe: The Washington dialogue consisted of a series of interactions over a three-dayperiod between July 17 and 19. The Brussels dialogue was a single day meeting onSeptember 5, 2001.Engagement Process: Stakeholders in Washington met as separate interest groups. Theywere first presented the results to date, and then asked key questions to promote dialogue andunderstanding of the issues of most importance to the represented organizations. Thedialogues in Brussels were conducted through a series of small group and plenary settingsmoderated by expert facilitators. The initial group session allowed discussion of the preliminaryfindings. This was followed by a plenary discussion of the most important areas of concern or interest.

http://www.wbcsdcement.org/






D-2

2. Themes Developed During Round 1 DialoguesSimilar topics and questions were addressed during each of the Round 1 Dialogues and the

feedback received was categorized into one of following three broad topics:! Communication, Dialogue, and Social Aspects: Including stakeholder dialogue and

communication approaches and contributions to socio-economic development

! Business Practices and Governance: Including public policy instruments, innovations,key performance indicators, and the promotion of sustainable development

! Technology, Environment, and Innovation: Including climate change mitigation;environmental, health, and safety performance; land use and biodiversity, and industrialecology.

Feedback from each of the four dialogues is presented under these themes, below.

2.1 Communication, Dialogue, and Social Aspects

The cement industry is important to the economy. Concerns about environmental effectswere tempered with positive feelings about job creation and other positive economic impactsassociated with cement plants.

Stakeholder familiarity with the cement industry varies. The cement industry generally isnot a high profile industry that has frequent interaction with the public. However, in somecountries the industry has recently become the subject of controversy, so people in thosecountries are more aware of certain aspects of cement operations. Stakeholders in Portugalwere much more aware and vocal about the cement company activities associated with wasteburning than was the case in the other regions

The cement industry often has a “dirty” image. Many stakeholders consider cement industryoperations to be “dirty”. This impression is based primarily on dust emissions and on thevisibility of quarrying operations, which generate noise, traffic, and dust. Increasing theeducation of communities at the local/regional level, closing old factories, removing stacks andother prominent features of inoperable plants, and communicating about environmentalimprovements and environmentally friendly (“green”) products being manufactured would helpimprove the industry’s image. Stakeholders in Thailand thought of the industry in a much morebenign fashion than in the other areas, partly because of the companies actions and partlybecause of the Royal Family involvement in the industry.

Trust between communities and the cement industry varies among locations and

companies. The level of trust varies among countries, ranging from the situation where thepublic has considerable trust that the cement company is looking out for the communities inwhich it operates, to a situation characterized by deep distrust. Stakeholders in Brazil andPortugal did not trust the companies to do the right thing, either because communication wasgenerally lacking or because they perceive that the companies are causing environmental andhealth harm, despite what they say.

Changing demographics have affected the connection between cement plants and their neighbors. Cement plants are increasingly distanced from the communities in which theyoperate. Because of urban growth, plant employees no longer dominate communities aroundcement plants. In addition, many communities have grown significantly since plants were sitedand are now abutting plant property lines.




D-3

Communication between the cement industry and its stakeholders is usually notadequate. In general, stakeholders do not think the cement industry is transparent or open and a more proactive approach is needed. Suggestions for improved stakeholder communications

include setting up advisory committees that involve community leaders and the government,adding communications departments at cement plants, hiring risk communication specialists todescribe risks and approaches to reduce risks, adapting communications appropriately for different kinds of stakeholders (e.g., technical versus “lay” audiences), involving teachers in theindustry, and encouraging the public to visit plants.

The sense of empowerment by stakeholders varies among countries. As citizens are givenmore voice through political liberalization, the public interest becomes vocalized and the power to influence and even disrupt industry’s plans become more possible. The industry needs toadjust to this shift in empowerment. In Brazil and Thailand the voice of the public is justbeginning to be heard and changes in the constitutional rights of the people are just beingimplemented.

Stakeholders feel the cement industry can contribute to social development. The cementindustry needs to take responsibility for considering the surrounding community’s rights, needs,and interests, and companies must design and operate their plants in a manner that protectspublic health and helps the community. In addition, citizens should be encouraged to definetheir priorities and communicate them to the cement industry.

NGOs play both constructive and non-helpful roles in monitoring and raising concernsabout the cement industry. The role of NGOs varies greatly among regions. Some groupsappear to have a limited role in monitoring the cement industry, while others are more active.For example, through litigation, some NGOs have been partially responsible for improvementsin environmental standards. NGOs potentially could serve as a bridge between the people and

the government. In Egypt and Portugal there was a sense that some NGOs are qualified and tryto exert positive forces for social and environmental change while others are just trying topromote their own agendas and really do not know the subject matter.

The role of the media in monitoring the cement industry varies among countries.Although the media have been accused of reporting only the controversial issues, and althoughmedia outlets sometimes play a limited role in reporting on cement industry operations, a well-informed and free media potentially could spur the development of sustainable practices in theindustry. To help the media become a positive force, stakeholders have suggested that journalists be trained in cement industry operations, the impacts on the environment andeconomy, and the technologies available for environmental control.

Employees want a more significant role in representing their companies and in insuringthat their principles are reflected in company operations. If given the opportunity toparticipate, employees can serve as “ambassadors” for cement companies in their communitiesand can communicate facts and dispel concerns about cement plant operations.

Health should be monitored and people compensated for negative health effects. Somestakeholders feel that citizens living near a plant need to be compensated for health problemsarguably caused by plant operations (e.g., respiratory diseases). Suggestions include adoptingan Environmental Management System (EMS); establishing a committee involving politicians,media, academia, and experts to serve as a channel for communicating with the public;communicating monitoring results to the nearby community; and establishing an independententity to track community health.




D-4

2.2 Business Practices and Governance

Stakeholders want a clear, practical definition of “sustainable growth.” Businesses must

be able to understand the concept and act on the idea. Presently, the term “sustainability” isabstract; it needs a practical definition.

The regulatory permitting process could be improved. Better cooperation between thecement industry and policy developers/regulators could eliminate or at least minimizeinconsistencies and conflicts among regulations affecting the industry. Some stakeholders feelregulatory practices need to change from a traditional emphasis on specification of emissionsand control of compliance (command and control) to a trust-based relationship (more voluntaryor beyond compliance actions).

Both government and industry must be held responsible for environmental health andsafety. Government organizations need to develop both their skills and their strategic programs

so they can better perform their functions and exert better oversight of the industry. Existingregulations must be enforced. Responsibility also rests on the international cement companiesto raise industry ES&H standards.

Opinions about plant siting differ among countries. Zoning is important in establishing anew plant and continued operation of existing plants. Stakeholders in some countries would liketo see leisure areas created alongside cement plants. Others think plants should not be locatednear population centers. Dealing with stakeholder views about having a cement plant “in their backyard” is one of the biggest challenges faced by the cement industry today. Stakeholders inPortugal were especially vocal about the preservation of environmentally and culturally sensitiveareas. The fact that some cement plants had been located in such areas prior to their designation and the increasing environmental awareness in Portugal made them very sensitiveabout the locations suitable for plants. Stakeholders in Egypt were also sensitive to urbanencroachment. Plants built in what had been remote areas are now suburban neighborhoods.

Stakeholders want methods to measure progress toward sustainable development.Industry needs to define and use indicators to measure its sustainable development improve-ments. At a minimum, this includes environmental performance (e.g., tons of CO2 or particulateemissions per ton of cement produced). Other indicators suggested were: material useefficiency, energy use efficiency, releases of toxics, amount of recycling, exposure to hazardousproducts, eco-efficiency, and community health.

Indicators should include measures of internal company performance and alignment withsustainability goals. Companies first need to solve any internal social problems (e.g.,employee relations) before they can make contributions to the broader community. Stake-holders believe that the entire company needs to be engaged in the sustainability goals, andthat a company cannot become sustainable without a CEO who is sincerely committed tosustainability.

Industry should exercise product stewardship and corporate responsibility over theentire supply chain. Stakeholders feel that a company’s responsibility must go beyond theresponsible use of resources and better reuse of resources. The cement industry shoulddevelop stronger product stewardship and corporate responsibility programs that include their supply chains and life cycle considerations. The industry needs to think beyond its current focuson cement production volume and think about long-term pollution and natural resourcemanagement.




D-5

Foreign ownership of plants in developing countries was viewed both positively andnegatively. “Outsiders” from other countries can be viewed either positively or negatively,depending on the situation. Cement companies should strive to create a positive image and be

sensitive to both profitability of new markets and the payback to the public needed to maintaintheir license to operate. Stakeholders in Thailand had a very nationalistic perspective and feltthat local ownership preserved the relationship to the government and the culture. Stakeholdersin Egypt felt that the privatization of companies by international firms provided a strong basis for performance improvement.

Governments and other institutions have a role to play in encouraging sustainability.Governments can provide incentives, such as tax relief for energy efficiency and pollutioncontrol projects. Banks and other lenders can establish stricter requirements for loans thatincorporate environmental and social criteria. In addition, international bodies, such as UNEP,could establish a sustainability report to serve as a guide for the industry on environmental,economy, and social elements of sustainability.

Globalization of the industry is not necessarily viewed as a positive force for sustain-ability. Although some stakeholders encouraged reduction of custom duties and increasedtrade, others had concerns about globalization of the industry. Although free markets are verygood in theory, globalization can be a problem because environmental requirements are notalways the same in different countries. For example, the dynamics of the market might changewith a CO2 tax, which could create incentives to move production to countries that do not have asimilar tax. Stakeholders in Portugal and Brazil felt that globalization carried more negativeimpacts than did stakeholders in the other regions.

Leading cement companies could act as surrogate NGOs to effect sustainable changesby other cement companies and industry as a whole. Leading cement companies could

grow an NGO voice by providing increased access to information and best practices and bylinking stakeholders to decision makers. These industry leaders could encourage action byindustry peers as well as actively support government regulatory enforcement.

The pursuit of sustainability could lead to business opportunities for cement companies.Cement companies are gaining new competencies by pursuing their sustainability efforts. Oneparticipant suggested that cement companies might want to consider a “spin off” business inhorticulture and silviculture based on their experience in quarry recovery.

2.3 Technology, Environment, and Innovation

Environmental impacts must be addressed. Stakeholders in all of the dialogue sessions

expressed concern about environmental effects, although their level of concern varied. Duringthe dialogue sessions, stakeholders raised concerns about air pollution (the greatest air pollution concerns were dust particulates), heavy metals, dioxins associated with co-incineration, CO2 emissions and global warming, water use and water pollution, the impacts of quarrying, blasting noise, road damage from trucks, and landslides caused by quarrying.Stakeholders in Egypt and Portugal were very concerned that the impacts on the environmentand health were not being sufficiently addressed. In both regions the experiences with theeffects of plant operations was more direct than in the other areas.

Environmental/health impacts must be better understood. Environmental impacts andrelated health problems caused by dust and by-pass material need to be better understood. Ingeneral, studies relating epidemiological phenomena to air pollution are lacking. More pollution

monitoring and risk analysis are also needed.




D-6

Technology upgrades and innovations are needed. The cement industry needs to exploreconcepts that would involve different manufacturing methods and uses of cement. Specificsuggestions include:

! Installing efficient and effective dust filters in all plants! Being willing to close plants that use inadequate technologies and where maintenance is

difficult

! Finding ways to use less cement while maintaining performance

! Changing cement packaging towards larger bags and bulk, which are “greener” than smallbags

! Looking at old concrete buildings as a source of raw material; designing concrete for recycling

! Designing quarries for reclamation

! If using municipal waste, consider use of a system to bypass a portion of the dust for

collection and proper management and for product quality assurance! Lengthening trailers for transporting raw material to spread out the load and minimize road

impacts

! Designing and adopting pollution prevention programs at cement plants

! Reducing electricity consumption.

Certain technological options should be pursued to reduce the amount of CO2 released.Suggestions included the following:

! Using the exhaust gas from a plant to produce liquid CO2

! Changing from a wet process to a dry one when possible

!

Using process additives to act as a fluxing agent! Reducing the melting point of the clinker with fluoride to allow lower operating temperatures

! Using fly ash and pozzolan as a substitute for clinker

! Using gypsum and other similar additives derived from other processes

! Locating companies that need CO2 near cement plants

! Capitalizing on opportunities to reduce emissions of greenhouse gas at negative cost byadopting energy efficiency technologies and pollution prevention methodologies.

Attitudes toward alternative fuels and raw materials (AFR) vary, and some stakeholdershave apprehensions about AFR. The cement industry considers the use of AFR to be animportant strategy for reducing energy costs and carbon emissions. The views of the

stakeholders, which vary from country to country, should be considered when contemplating if and how this strategy should be implemented. One stakeholder reported that because 40-50%of the cost of cement is related to fuel, reducing the amount of virgin fuel used in the cementproduction process would have positive economic and environmental outcomes. However,many stakeholders have concerns about potential alternative fuels, including used tires,hazardous waste, and in some cases municipal waste. Stakeholders in Portugal voiced agreater concern about the use of AFR than stakeholders in other regions because of feelingsabout the political nature of the government actions.

Cement manufacturers will need to educate consumers. If the recipe of cement or its major manufacturing processes is changed dramatically as a result of efforts to improve the




D-7

environmental aspects, global markets need to be educated on the continued quality of theproduct.

Mechanisms to foster innovation should be explored. Stakeholders shared many ideasabout ways to share information and foster innovation. For example, the industry couldorganize a yearly symposium with suppliers to help them understand what sustainable practicesare being expected of them. Some stakeholders suggested establishing a “Cement IndustrySociety for Environmental Conservation” for sharing information. Others suggested establishinga cement company consortium that will take the lead in solving common problems, introducingnew technologies, and supporting R&D activities.

3. Common Topics Discussed During Round 2 Stakeholder Dialogues

The following summary is based on considerations of the preliminary report findings andrecommendations as addressed by the various Round 2 stakeholder groups. This informationwas used to enhance the analysis and actions contained in the report. Comments provided byU.S. and Canadian participants are distinguished from their European counterparts.

3.1 Product and Process Improvement

United States and Canada

! A "sustainable cement industry" needs to focus on the performance of the final product -concrete - and to work with downstream customers to increase the durability of concrete.This will involve a change of philosophy away from the traditional approach of "use morecement", towards the more efficient use of materials and optimization of concrete mixes for durability and performance. In considering sustainability, the industry should note how longpeople are in their cars in backups during re-paving. There are obvious social, economic,and environmental costs in repaving.

! Innovation could be stimulated by Federal directive on environment/recycling. It will need tobe determined who will get credit for CO2 reductions (cement company or concretecompany) with innovations if trading becomes an issue. Research & development needs tofocus on demand rather than supply.

! One area where there may be a need for residual risk assessment is in mercury emissions.Companies should try to build up their knowledge and engage other facilities actively tobetter understand these concerns.

! The very different view in the U.S. vs. Europe regarding the use of waste materials wasmentioned. It was suggested that the multi-national companies should adopt aninternational measurement protocol and performance standards that are independentlyverifiable. There should be no “pollution havens”. The application of best practices shouldoccur immediately for new facilities and should be phased in for existing plants.

! On CKD there has been very little commentary from community groups. The feeling of agency staff was that they had moved on to other issues – that is, this was only a temporaryarea of focus. There is agency interest in looking at recycled materials use in general – thiscould include the cement industry. The whole area of performing R&D and working withusers to create market acceptance was supported. As an example, in Canada CanMet isworking with architects and the Asia Standards Institute in India to fund such work.




D-8

Europe

! There needs to be a balance between short-term "quick fixes" of innovation, which tend tobe product-based, and focus on longer-term technology R&D. Do not just focus on cement

as the product. Think laterally from making cement to making construction materials.! Have more people committed to research and development – right now they are behind their

peer industries.

! The industry should ”pledge” to phase out their least efficient manufacturing processes,e.g., wet or semi dry.

! Explore ways to create solutions at all different stages of the life-cycle.

3.2 Performance Measurement and Management Systems


! The establishment of environmental KPIs is essential. Social considerations are thought

less important in this regard than economic and environmental ones and more tractable.! The industry should make extensive use of the World Wide Web in communications, e.g.,

publish electronic monographs for cement performance.

! The U.S. perspective regarding cement and concrete is very traditional and oriented aroundspecifications. In this regard there are some philosophical differences with the Europeancounterparts. There is some possibility to set a new tone though. This needs to occur inseveral steps:

- Establish a process to further change the standards and codes- Have well respected performance testing methods- Build on the emerging R&D agenda, e.g., EPA’s Environmentally Preferred Purchasing,

BEES, TRACI, and other life cycle approaches

-Educate and train consumers, e.g., “Guide to the Selection and Use of Cements”.

! The industry should consider becoming a participant in EPA’s Climate Leaders program.Climate Leaders set a corporate-wide GHG reduction goal and inventory their emissions tomeasure their progress. Inventory data submitted under the program will not be released tothe public without the partner's permission. The overall goals are established for a 10-year time horizon and participants are encouraged to be aggressive in setting targets. Byreporting their inventory data to EPA, partners create a lasting record of their accomplishments. Partners also identify themselves as corporate environmental leadersand strategically position themselves as climate change policy continues to unfold.

! The industry could show leadership in the revamped Energy Star Program. EPA hascreated new incentives for involvement. The governance of the program has beenconsiderably simplified from what it previously was.

! The business arrangements for use of AFR were thought to be unfair to the cement industry.When the electric utilities specify the contract terms, it results in an unfair exchange andpoor quality material. Also in Canada there is consideration of classifying slag as wastematerial subject to additional regulations. Finally, the establishment of a surety package isbeing implemented in the mining industry to keep the public and the government from havingto pay to remediate abandoned facilities.

! Stakeholders would like to see specific commitments to act with transparent targets (e.g.,water, energy, waste) and timeframes. Examples such as a Seattle utility deciding that it willreduce its GHG by 100% were mentioned. One idea was to have a Harvard BusinessReview article written on what the WGC is doing.




D-9

Europe

! Recommendations should be step changes/challenges to industry

! Cement companies should create a culture in management systems for innovation, and

modify management schemes to induce product innovation. The alignment piece is key andshould be highlighted in the report with regards to change management.

! Companies should utilize the opportunity of this project to present a united voice for theindustry. The SD Institute is a great idea and needs to own a process that people can sign upto and be seen to sign up to (has to add value). The initial concept could start with the10 companies and attempt to recruit others. In the establishment of the Institute, care shouldbe taken not to divide industry because it could dissipate the ability to change:

- Use Trade Associations as leverage - using their skills and resources, don't duplicate(Trade Associations are perceived as "conservative" and leading companies distancethemselves)

- Don't forget to collaborate within your company.

-Collaborate with local NGOs to implement Agenda 21 to include management systems

! On climate mitigation there should be GHG accounting over the entire value chain and thecompanies should project their anticipated reductions over time.

! Collaborating with government (e.g., planning ministries) is extremely important.

! There is a need for bench marking through the SD process and setting stretch targets for energy efficiency over appropriate timescales. The companies should show commitment tohigher standards or targets for new plants and equipment.

! Cement companies need to look at their environmental footprints when looking at sites.

3.3 Stakeholder Communications


! The industry should be very clear about their motivations for doing this study. What is thelevel of stakeholder dialogue convergence with the companies? Are there actions thatstakeholders are taking against cement companies? In the U.S. in developing countries?One of the important outcomes of this study should be to build capacity in developingcountries. Discussion on how that should or can occur is needed.

! Overall, the industry needs to be characterized for where it is today, what the vision couldbe. Don’t slip to the lowest common denominator; adopt a progressive stance. The use of business language is encouraged – focus the forward progress around competition. In fact,the action category “compete” should be added to the other four. Make it simple tounderstand. One way to do this is to take out all of the basic compliance “minimally

acceptable” language; that level of performance is already expected.! The study coverage may be too broad and therefore perceived as too ambitious. Need to

address inter-goal trade-offs in a forthright way. Understand what messages are being sentto the financial community, as it is an important stakeholder. Be aware there are effectsassociated with the impact on the company and industry reputation. Increased stakeholder participation may actually slow down implementation, so prioritize when and howstakeholder engagement should occur.

! Look at the study and the findings from different viewpoints. If an activist looked at it theymight ask “Why is this different?”. From a CEO perspective, there might be resistance if heor she perceives the company’s future may be jeopardized. From an investor perspective,“If the industry is doing well financially, why do anything? These perspectives will allow two




D-10

things to be stated: 1) What are the threats to the industry? and 2) What is the context of SDand the motivation(s) for the companies?

! Opportunities in developing countries need to be shown. One action should be to (better)

connect companies and NGOs in developing countries. Should consider cultural differencesbetween nations. In addition, the global players should seek to raise standards and their visionstatement should embody a reference to continuous improvement

Europe

! The cement industry is generally poorly understood, therefore, there is an opportunity for increased understanding and trust through tours of facilities and open communication.

! Companies should aim to report on all parameters of concern from all countries of operation.A formal structure for sharing best practices should be developed.

! Continuing dialogue with stakeholders is important part of formulating a credible response.All commitments need to have a written strategy to support them. Examples of

recommendations, techniques, and tools should be explicitly described.! Social responsibility should preserve and respect the local habits and cultures of local people

and local habitats and eco-systems.



APPENDIX E:KKeeyy FFiinnddiinnggss aanndd RReeccoommmmeennddaattiioonnss






E-1

1. IntroductionThis appendix provides a consolidated set of tables of Findings and Recommended Actions for

each of the substudies. These tables also include information on whether the finding is specificto an SD issue (as described within Part 1 of this report) or multiple substudies. The purpose of the consolidation is to provide a concise set of findings and to direct the reader to appropriatesubstudies for further information about specific items. The substudies are listed in Table E-1.

Table E-1. Sustainable Cement Substudies

1. Stakeholder Dialogue 8. Climate Change

2. Communications Strategy 9. Industrial Ecology

3. SD Business Case 10. Environment, Health, and Safety (EHS)

4. SD Alignment 11. Land Use and Biodiversity

5. Key Performance Indicators (KPI) 12. Socioeconomic Development6. Life Cycle Assessment (LCA) 13. Public Policy Instruments

7. SD Innovation

In addition to findings and recommendations from each of the substudies, this appendix alsoprovides a set of findings and opportunities from a focused country analysis on China. A listingof abbreviations used in the following tables is provided below.

Issues:RP = resource productivityCP = climate protectionER = emission reductionES = ecological stewardshipEW = employee well-beingCW = community well-beingRD = regional developmentSV = shareholder value

Substudies:1/2 = Stakeholder Dialogue and Communication3 = Business Case4 = Alignment on SD5 = Key Performance Indicators

6 = Life Cycle Assessment7 = Innovation8 = Climate Change9 = Industrial Ecology10 = Environment, Health and Safety Performance Improvement11 = Land Use and Biodiversity12 = Socio-economic Development13 = Public Policy Instruments




E-2

2. Findings and recommended actionsSS1&2: Stakeholder Dialogue and Communication

Findings Communications and stakeholder involvement needs to occur on an on-going basis, not just when there is a crisis or major event. When these events do happen, there needs to be specific activities that take place tied to the event.

Stakeholders of the cement industry care about and want to communicate about a very specific set of areas andissues.

The industry cannot let a few poorly communicating plants or companies give the industry a bad reputation. Cementcompanies should share communications concepts and plan to conduct joint communications in the future.

Recommended ActionsSDIssues

SSLinkage

Three key areas: set specific objectives for Sustainable Development (SD) and the role of communication; make a commitment to open and productive communication; and identifyspecific actions to communicate with and involve stakeholders in decision-making.

EW, CW

Community investment and environmental actions are done in collaboration and areclearly communicated to all stakeholders to demonstrate that cement facilities are integralto communities and environments in which they operate.

CW, RD

Establish a stakeholder tracking database and apply it to map and address all concerns. SV SS3

Operate the organization and its component facilities in a way that increases plantefficiency and reduces or eliminates damage to the environment, employees, and the localcommunity.

RP, CP,EW, ER

SS10

Adopt use of the Communications Guidebook EW, CW

Create a citizen advisory or community liaison group and encourage the public to visit theplant.

CW, SV SS4,SS10,SS11

Use a third party to solicit feedback from internal and external stakeholders on how wellthe corporation is performing on SD.

SV SS4

Adopt an Environmental Management System (EMS) and communicate its progress andimpact. At the national and global level, develop a communications strategy and launch a

campaign to communicate plans for implementing the results of this project.

CW, SV SS10,SS11

Consider supporting community services and infrastructure projects consonant with SDgoals.

CW, RD SS12

Develop environmental performance measures at plant and corporate levels andcommunicate them openly

ER, CP,CW

SS10, SS5

Communicate benefits of new technologies and processes. Mentor smaller companiesand quarry operators.

SV, ER,CP, RP

SS3, SS7,SS10

Work with stakeholders to influence governments where there are shared goals. SV SS3, SS11

Provide real-time information about emissions and Occupational Safety and Health (OSH)to the community

ER, SV,EW

SS10,SS12

Address concerns with AFR and communicate results of research on risks and benefits. RP SS9, SS3

Develop an industry-wide SD communication program SV

Involve communications staff in strategic business and investment decisions*158

SV, CW SS3, SS4

Create a policy research and communication institute SV, CW SS13

158An asterisk (*) indicates that a recommendation was not incorporated in the study report actions either because it wasincompatible with other recommendations or was not consistent with overall SD progress.




E-3

SS3: Business Case

Findings

Even pro-active SD leadership companies have not adopted a broad, systematic decision frameworkincorporating SD considerations

Companies often separate “SD” projects from “business projects” and use different criteria. These distinctionsare being reduced as “SD” projects need to be economically and strategically justified from a cost/benefit view

Adoption of a customized Sustainable Business Decision Framework (SBDF) will facilitate moving toward SD.Management challenges exist to doing this, but no fundamental technical barriers.

To derive maximum benefits, companies will need to:! Have a clear upper management commitment! Align toward the company SD vision! Share commitment through SD-based performance goals and compensation packages

Identified success factors for the SBDF! Clarity and simplicity of approach! Coverage of triple bottom line aspects!

Quantitative and qualitative methods! Relevance to cement industry decisions! Ease of integration with existing processes! Flexibility to support a variety of needs(see substudy report, section 3 for more detail)


SSLinkage

Adopt the SBDF, customizing it for individual company needs. Application of theSBDF should be accompanied by the establishment of key performance indicators(KPIs) that can be used to monitor critical outcomes. To support implementation, ashared repository of business case examples should be established for companymanagers and, with suitable removal of company confidential information, for use atan industry level.

SV, RP,CP, ER,EW

SS4, SS5,SS7, SS8,SS9,SS10,SS11,

Important decisions should be preceded and supported by stakeholder dialogue, andtransparency of the decision rationale will be important. The SBDF applicationresults can be a helpful communication tool.

SV, CW SS1/2




E-4

SS4: SD Alignment

Findings

The industry is not very aligned at present around SD. There are several impediments that contribute to thissituation:! Awareness – the knowledge of the concept is limited to environmental specialists and a few top managers! Understanding – there is a lack of understanding of the connection of the business case for SD! Commitment – there is little personal commitment around this idea and it is not clear what actions are

needed or appropriate! Action – commitment does not translate into action, there have been no crises and a general reluctance to

change! Maintaining momentum – there has been inconsistent follow up for other change initiatives.

The industry has some strengths to build upon, including:! Top management awareness – this is a critical starting point for change! Talented and motivated staff in environment, HR, and communication – understand SD and what it means

to the organization!

Change initiative experience – previous efforts with SAP and Total Quality Management (TQM) have builtexperience and knowledge of the challenges! Internal training programs – many companies already have extensive courses, workshops, and computer-

based systems and materials in place.

The Best Practices survey of leading SD practitioners showed a number of characteristics of successful,although still on-going, programs:! Top management commitment! A well stated SD strategy – one that is connected to the business strategy! Tangible Projects – high profile initiatives that create SD visibility and commitment! Key manager commitment at mid-level – workshops and other training, external SD thought leaders! Goals and Objectives – goals translated into short- and medium-term objectives for business units and key

managers! Communications – use various means tailored to need and group!

Tailored approach – most focus on senior and middle managers! Assign staff resources! Total employee involvement.

Sustainable development framework recommendation elements:! The initiative will be longer lasting if the employees see a personal connection between goals and what

matters to them! Use a specific stepwise process to build and maintain momentum and have measurable goals for business

units and individuals! Time phase over a number of years (3-5)! Employees eventually act as a link to the community in local events.


SSLinkage

As part of the implementation and alignment process, the SD strategy is put into a

business case that shows the balance of benefit versus cost for the company as awhole and for the employees.

EW, SV SS3

Individual and team action plans, short and medium term objectives, and tangibleinitiatives are developed and implemented.

EW, SV SS5

Employees help externally communicate about the company’s SD initiative byparticipation in local community events.

CW, SV SS1/2




E-5

SS5: KPIs

Findings

Leading companies are striving to measure “triple bottom line” performance, however, there are no uniformstandards for Key Performance Indicators (KPIs).

Good SD performance indicators measure resource conservation and/or value creation over the full product lifecycle and are linked to strategic goals.

The least developed areas are indicators of socio-economic benefits such as quality of life and communityprosperity.

The cement industry is less advanced than others in SD performance measurement, but there is a need andinterest in developing KPIs (see also SS report).

Many companies are becoming more conscious of environmental quality and social responsibility.

A number of companies use environmental indicators as facility-level KPIs, but the use of social indicators israre.

Some companies have introduced voluntary goals and indicators related to energy efficiency and use of AFR.

Recommended Actions

SD

Issues

SS

LinkageDevelop an internal sustainability performance measurement program consistent withthe company’s stated policy and goal and using a 5-step process to identify keyaspects and develop company-wide indicators:! Consider stakeholder needs! Identify key SD aspects! Specify company SD objectives! Develop corresponding indicators! Set targets and flow down to business units and facilities.The program should support continuous improvement, including periodicreconsideration of what indicators should be included.

SV SS4, SS3

Work collaboratively with other cement companies, NGOs, and interested parties toestablish worldwide standards for performance indicators in order to facilitate

benchmarking and stakeholder communication.

SV SS1/2

It may be advisable to charter an independent entity to support benchmarking of SDperformance.

SV SS13

Work to incorporate one or more sustainability KPIs into the key company goals thattypically form the basis for executive compensation.

SV

Consider adoption of a multi-dimensional approach, which combines financialperformance measurement with measurement of key drivers such as operationalexcellence, customer relationships, and organizational learning.

SV, RP,EP, CP,CW, EW

SS3

Establish an approach to “flow down” from long term goals to specific operationalobjectives for plant managers or other decision-makers.

SV, EW SS3




E-6

SS6: LCA

Findings

LCA is a rigorous, well-defined approach, but is still reliant on well-defined goals and objectives in order tolead to conclusive results in any particular situation.

The view that LCA is time consuming or biased is no longer valid. Today LCA studies vary in complexity fromsimple to comprehensive, can be internally or externally focused, and are used for a wide variety of purposes(see Figure 3 in SS report).

International standardization of LCA provides transparency and clarity of results, although conclusions fromresults rely on value judgments.

LCA supports eco-efficiency, as it can help frame the benefits provided by cement applications, in relation tothe impacts of production.

To date, use of LCA by the cement industry has been fragmented and of mixed value. Significant value hasbeen demonstrated through its use in technology assessment and, in some regions, with the provision of LCAdata in support of customers and other stakeholders. Lesser value was found in other areas.

Software and databases are available, regionally and internationally, providing analysts with quick and easy

tools necessary to conduct a study.One of the greatest values of LCA for the cement industry is indirectly, via its use by stakeholders such asarchitects and engineers. It is important for the cement industry to support these groups.

LCA is a tool for SD: for market support, to assist in communication of environmental information aboutproducts, for technology assessment including potential use to support industrial ecology, for GHGmeasurement, and for supporting environmental performance improvement through benchmarking and EHSanalysis.


SSLinkage

The industry should compile LCA data on cement and make this informationavailable to customers and other stakeholders. Although already well underway insome regions, more needs to be done. Moreover, LCA profiles of cement productsand downstream applications of cement should be developed; the sector needs to be

prepared to participate in initiatives and provide LCA profiles and data to decisionmakers (architects, engineers, government purchasers).

RP, ER,CP, SV

SS1/2,SS3,SS5,SS7,

SS8,SS9,SS10

Internal use of LCA by the sector should continue. Cement industry experienceto date has shown LCA to be valuable on a case-by-case basis in areas such asintra-industry benchmarking, performance improvements, greenhouse gas measure-ment and AFR evaluations. Under this vision, companies would have current LCAdata on each of their facilities, be able to compare from site-to-site and benchmarkthemselves to industry best practices.

RP, ER,CP, SV

SS1/2,SS3,SS5,SS7,SS8,SS9,SS10

Cement customers and users should be informed on LCA by the cementindustry. At a general level, consumers and professionals like architects andengineers need to be aware of the environmental advantages and disadvantages of

cement and cement applications throughout the whole life cycle, not just duringproduction.

RP, ER,CP, SV

SS1/2,SS3,SS5,

SS7,SS8,SS9,SS10

Coordination of LCA efforts is recommended. A mechanism is necessary toensure consistency and accountability of methodologies and databases across theindustry and internationally. Existing associations might take this role, or perhaps itis a job for the proposed Sustainable Development Institute of Cement and Concrete.

RP, ER,CP, SV





E-7

Regional assistance will be required. In some areas and markets, the level of interest and effort in LCA is already underway, but in other regions the demand for LCA information is low, and LCA use is apparent only on a case-by-case basis.Larger cement companies with broader and deeper resources are in a position tocontribute to the overall industry effort, to support smaller companies, and to transfer experience from one area to another. The value of LCA is common to the wholesector. Cooperation within the industry will allow it to better meet user needs, toprovide higher quality and more comprehensive datasets, and to better manage dataas they are picked up and used.

RP, ER,CP, SV

SS7,SS8,SS9,SS10

More proactive options, too, are apparent. Cement companies can lead by engag-ing their suppliers and downstream partners. Leadership could be taken externallytoo: companies and associations should maintain LCA profiles of alternative productsand applications and know their product’s environmental value relative to alternativematerials. Reporting and communications can be enhanced by LCA. Sales andmarketing of cement should be aligned with sustainable development objectives,giving informed positions regarding appropriate—and inappropriate—applications of cement.

RP, ER,CP, SV







E-9

Increase emphasis on developing product, process and management innova-tions that make stepwise improvements in environmental and societal aspectsof cement production and use, while maintaining the viability of the cementindustry.! Increase cement company role in cement process design. Help equipment

suppliers set an R&D agenda for SD-oriented cement process change. Providefinancial support for SD-oriented process R&D, including work at universities andby other parties outside cement companies. Work cooperatively with other com-panies, suppliers, and universities on long-term projects leading to dramaticallyimproved cement production processes, emphasizing low emissions (includingCO2 emissions).

! Develop or support development of (e.g., by universities and outsideparties) new, cement-based products specifically aimed at environmentaland social improvements. For example, create or support creation of novelproducts for developing economies that safely meet their construction needs in acost-effective manner, and develop cement products that can be used toameliorate environmental problems. And, develop high-value products that helpsolve environmental clean-up problems, reduce CO2 emissions, or have other environmental or social benefits. To accomplish this, include environmental or societal benefit criteria in R&D project selection and specifically seek outsustainable product ideas. Experiment with marketing new SD products withinniche markets to gain more experience with such products and to break downbarriers in the companies and in the marketplace.

! Encourage creative SD thinking among employees by providing support,incentives and rewards for SD innovation. For example: use knowledgemanagement systems and cross-company meetings to share innovative ideas,expand personnel reward programs to include rewards for SD innovation, solicitSD innovation ideas, encourage teamwork, and effectively manage the innovationstream.

!

Conduct or support research to characterize the risks and benefits of innovations, such as use of alternative fuels and raw materials. Conductresearch on health and environmental impacts of AFR and other innovations.Develop/apply lifecycle assessment methods and methods to evaluate societalcosts and benefits of innovation.

! Create the Sustainable Development Institute of Cement and Concrete to promote worldwide progress toward sustainable production and use of cementand concrete. Leverage resources with other member institutions (cement andconcrete companies, suppliers, universities and other research organizations,cement associations, government institutions, economic development organiza-tions) to conduct early-stage research to develop and assess new process andproduct technologies. Work collaboratively to lower the risk and hasten thedevelopment of breakthrough innovations.

SV, CP,ER

SS3, SS8,SS9,SS10,SS11




E-10

SS8: Climate Change

Findings

Industry must pursue a strong CO2 management campaign. Scenarios were modeled to derive the size of theCO2 challenge. All show significant potential financial impacts. Different paths to SD emerge from thealternatives.

Creative companies will generate positive financial returns through CO2 management and associatedinnovations.

A time-phased strategy will allow the transformation to occur in an orderly and minimally disruptive manner.

Some companies are becoming aware of what their CO2 footprint is and are beginning to formulate possibleresponses.

Some companies are participating in discussions to develop a procedure for accounting for their emissions,both direct and indirect.

Some companies in certain regions have committed to specific reductions.


SSLinkage

Establish corporate carbon management programs, set company-specific andindustry-wide medium-term CO2 reduction targets, and initiate long-termprocess and product innovation.! Establish a CO2 emissions baseline and mechanisms to enable cost-

effective emission reductions. Develop and implement a standardized cementindustry CO2 accounting protocol, which allows companies to establish emissionsbaselines and to track and report future progress

! Set challenging emission reduction targets and state them publicly. Estab-lish goals and adjust them over time as technology and management techniquesadvance.

! Cooperate with stakeholders to develop government policies, productstandards, and market practices to remove barriers to: 1) the sale of innova-tive (and safe) cement products with lower embodied CO2 emissions, and

2) the use of appropriate waste fuels that reduce lifecycle CO2 emissions,when the specific waste fuel proposed for use has been proven to cause noother environmental harm. Encourage industry associations to support suchpolicies. Develop government liaison function related specifically to climateissues within individual companies

! Explore prospects of reducing CO2 emission reduction costs through emis-sions trading or offset schemes. Investigate cost of controlling CO2 using vari-ous options, and compare control costs among plants and between cementindustry and non-cement emission sources.

! Cooperate with governments, customers, suppliers, and competitors onpre-competitive R&D projects that develop low-carbon products andprocesses. Initiate a major R&D effort focused on long-term, cost-effective CO2 reductions. Work collaboratively to lower the risk and hasten the development of

breakthrough innovations.

SV, CP,ER, RP

SS3, SS7,SS9,SS10,SS13




E-11

SS9: Industrial Ecology

Findings

IE is a necessary but not sufficient condition for sustainability. IE can point to how an industry might adapt toits changing environment as well as the consequences of such change.

IE is related to other concepts such as The Natural Step (TNS) and Zero Emissions (ZE). IE differs from thesein that it is a scientific framework whereas TNS and ZE are respectively natural system and engineeringphilosophies that use science principles.

At the base of IE are materials and energy exchanges to mutual advantage. But current AFR usage does notgo far enough.

A cement-specific definition of IE is that it is a business relationship among a set of partner organizations inwhich a cement company uses or provides materials and energy carriers that cannot be reused or recycled inthe generating process and which otherwise would have little or no economic value as co-products. Thecement company’s use or provision of these materials must correspond to the creation of system level netbenefits as well as benefits to the cement company.

Four factors: financial, governmental, waste infrastructure, and community considerations, constitute current

drivers for IE. Successful implementation shows strong positive evidence of all four.Easy availability of the cement kiln option may create less incentive for other partners to engage in wastereduction or pollution prevention.

Third party guidance on processing of certain materials or fuels is useful in enhancing the adoption of thepractice.

Governments can facilitate and promote IE in a number of ways ranging from land grants for eco-parks (or other set asides) to requiring waste exchanges to be created to establishing guidelines and nationalstandards.

Innovation can also be a motivation for IE. Successful exchanges built upon process changes and newmaterials within both the supplying industry and the cement company are not uncommon.

Educating and conditioning the marketplace to accept and welcome products derived for IE interactions iscritical in some cases.

Seven characteristics of a sustainable industrial ecosystem were defined: 1) true partnership, 2) all must

benefit, 3) waste management hierarchy applies (except as counter-indicated by LCA studies), 4) zero netwaste, 5) quantitative benefits, 6) innovation and tools, 7) appropriate location and relationships.

A self-assessment tool for a company to determine where its current activities stand and formulate businessstrategy around IE was found to be useful.

Some relationships have benefited from broad-based planning or analytical models showing the type of opportunity and the economic and environmental consequences.


SSLinkage

Develop an integrated IE component of corporate strategy using the process devel-oped and show how this systematic approach has supported the identification of specific areas of improvement.

SV, RP,CP

SS3,SS5,SS7,SS8,SS13

Set and communicate goals for specific performance indicators for the corporation,the local company and individuals that reflect a true sustainable IE focus and work toalign the various responsible groups to achieve success.

SV SS3,SS4, SS5

Provide operating companies and facilities with the necessary information and toolsto fully evaluate and implement the attractive opportunities.

SV SS3, SS5

Obtain a more complete picture of the range of IE opportunities regionally and locallyand identify which organizations to work with to remove barriers. Consider collabora-tions with organizations emerging as brokers to introduce potential IE partners.

SV SS3,SS13

Build strong ecosystems by engaging with multiple partners and establish workingrelationships at several levels in the partnering companies. Consider expanding intothe collection, processing, and delivery of waste materials where a business casecan be made and where the local infrastructure is an implementation barrier.

SV, RP,ER

SS1/2,SS3




E-12

Condition and educate the marketplace if the results of an IE implementation willchange product characteristics or composition

SV SS1/2,SS3, SS7

Conduct or support research to characterize the risks and benefits of an IE opportu-nity for the company, plant workers and the communities and other components of society affected. Do not rely on generic data unless it is clearly relevant andapplicable.

CW, EW SS1/2,SS10




E-13

SS10: Environment, Health, and Safety

Findings

On a technology scenario basis, several options for improving the environmentalperformance are possible.

Use of alternative fuels indicates that when an infrastructure for waste processing has not been developed,there is a strong opportunity for optimization, including cement kiln options. Conversely, where a wasteinfrastructure already exists, it competes politically and economically.

Specific characteristics:! Controls and emissions are not well suited to handle some wastes! LCA and Life Cycle Costing (LCC) can show that for some wastes (e.g., plastics and spent oil), kiln

processing is superior to other methods higher on the waste hierarchy due among other factors to the lackof solid waste generation.

Biomass fuels in the right circumstances could be feasible, but a site-specific analysis is required and theindustry may be in competition with other users for these fuels.

Recommended Actions SD Issues

SS

LinkageTechnology development and environmental performanceTo foster additional cost-effective improvement, process and product research anddevelopment should have an important position in the cement industry to assure theenvironmental as well as the safety performance of the process and to minimizehealth effects.! Cement process emissions (due to the high process temperature, raw materials

quality) such as dust, NOx, SOx and/or VOC are often accepted to be higher than emissions from other industrial installations. For sustainable cementproduction, the cement industry should aim at a situation with a comparableemission limits.

! The cement process has a relatively uniform production process globallyapplied on many hundreds of locations in many different companies. Further-

more, the cement process has inherent features (basic material, high tempera-tures, AFR options) for good environmental performance. The cement industrycould consider the option to enhance this performance and to become anindustry with an excellent environmental record.

! Exchange of information and experience, monitoring, benchmarking, enhance-ment of process development are possible instruments.

! Investigate for the long term, the option of co-operation with municipal andindustrial waste combustion companies or technology suppliers to developcement production processes based on these wastes.

ER, SV,CP, RP

SS1/2,SS3, SS7




E-14

Fuel use! State clearly the intent to use wastes only in case of waste recovery and if

processing is an environmentally sound practice. Define waste recovery usinga clearly defined method. Handle other waste materials for instance only if requested by authorities. Develop a code of conduct for environmentally soundand safe performance.

! In the Kyoto protocol, emissions from burning waste of fossil origin are con-sidered to result in a CO2 emission. Nevertheless, incineration of these wastesis environmentally attractive as they replace fossil fuels. The cement industryshould discuss this apparent contradiction to ensure the sustainability of fossilwaste that cannot be re-used or avoided.

! Give priority to the use of renewable fuels derived from biomass and biomasswaste. Sewage sludge, saw dust and waste wood are already used. Globallythere is a large potential in agricultural and forest residues.

! Consider the use of wastes of AFR from municipal and similar (office, industrial)wastes. The fuel is partly renewable. Local sources can be explored and localwaste management costs can be reduced. Economically less attractive thanhazardous waste.

! Enter early in emerging waste markets and in waste markets where specializedwaste incineration is introduced to become optimally placed for using environ-mentally and economically attractive AFR material

! Separate cement production from fuel production. Fuel production from wasteis a small-scale activity requiring other capabilities than needed in a cementproduction facility.

ER, CP,SV

SS7,SS8, SS9

Alternative raw materials! Intensify co-operation with fly ash and slag producers to maximize the use of

AR in the cement industry. Develop technology if necessary.! Investigate the role of cement standards in impeding maximum use of inorganic

alternative raw materials. Consider redefining cement standards.!

Consider for the long-term options to reuse potential raw materials in demolitionwaste to demonstrate responsible care in the building materials chain and topreserve resources.

RP, ER,SV

SS7, SS9

OSH performance! Understanding the basic risk factors underlying accidents and near-misses are

a necessity to achieve improvement of the safety and health performance. Anactive program of analyzing and controlling these factors should beimplemented

! Implement an OSH management system with full commitment of topmanagement and elements as:- Top management commitment (policy, CEO direct involvement), EHS

steering committee)

-Corporate standards (OSH corporate manual, auditing criteria, riskmanagement standards)

- Indicator system (Intranet system for indicator and accident report, quarterlysafety indicators report)

- Company infrastructure (with EHS-coordinators per country with operations,intranet EHS - conversation network, EHS annual meeting & report, use of Intranet system for indicator and accident report, periodic working meetingsvia video conference)

- Sharing best practices among plants.! For the long term, develop an approach toward Inherently Safe and Healthy

Operation by creating a situation in which improving the S&H performance isconsidered as important as other objectives and which risk factors induced byhuman or system failure are systematically reduced.

EW, CW SS3,SS5,SS12




E-15

EHS management! In order to reshape EHS management according to the enhanced requirements

of stakeholders, a strong top corporate involvement will be required in EHSissues. This will facilitate a shift from short-term technical support to long-termstrategic thinking in EHS management strategy.

! Implementing a sound knowledge information system for EHS-issues willenable the monitoring and auditing of the progress made. It is ideally linked or integrated to the ERP system in use. KPIs addressing EHS managementissues are a prerequisite for performance based EHS management.

! Effective stakeholder involvement will become a prerequisite to create competi-tive advantage. It is recommended to involve (groups of) stakeholders in theprocess and operational aspects of EHS management. The Global ReportingInitiative (GRI) can offer an opportunity to help shape EHS management andstakeholder communication.

! As the cement industry is a major player in the value chain of concrete buildingproducts, it should take responsibility for product stewardship related to the useof cement.

CP SS8, SS9






E-17

Recommended Actions (continued)SDIssues

SSLinkage

! To detect, measure and assess changes in the status of biodiversity due toplant/quarry operation and other factors, appropriate monitoring methodsemploying specific indicators of biodiversity attributes should be implemented.

! Rehabilitation costs both simultaneous to operations and at closure stage, shouldbe made a part of project cost at the time of project decision.

! Annual budgets should have specific allocation for quarry rehabilitation, itsmonitoring and appraisal.

! Performance of persons involved with rehabilitation activity should be evaluatedwith respect to relevant performance indicators: When introducing plant species,it is recommended that native plants instead of non-native/exotic species must beplanted as introduction of exotic species accelerate the loss of individual specieswithin ecosystems. Introduction of native flora also facilitates re-colonization of the area by the surrounding native fauna.

! Strict penalties and legal action should be enforced by statutory organizationsagainst defaulters of environmental regulations especially in developing countries.

! Economic incentives and disincentives should also be used in inducing projectproponents to incorporate sustainable practices in their operations.

! Large corporations having multi-location operations should create examples of leadership in sustainable practices for local companies to emulate, even if itmeans doing more than what the current regulations or social pressures requireat that time.

! Documentation of “good practices” as described in this study should receiveworldwide circulation in the industry.

! Organizations like trade associations and research organizations/manufacturers’associations of different countries should be encouraged to conduct regionalseminars/workshops/training programs on SD.

! Adequate resources need to be devoted to higher education in the quarrying

sector and emphasis created on education on sustainable practices: Statutoryprovisions regarding maintenance of biodiversity may be properly elaborated interms of expectations and obligations to promote specific actions by the plants.

! Increased support should be given to restoration and utilization of degraded landsand ecosystems related to mining operations, especially in developing countries.For small quarries that are difficult to monitor, recommendations were proposedat UN sponsored International Round Table on Quarrying and the EnvironmentCongress held at Berlin in 1991 that re-cultivation guarantee funds should be setup i.e., a suitable amount should be included in the concession fee. If theoperator fails to rectify environmental damage at the time of closure, financialreserves will be available for rehabilitation. This is already done in somecountries but needs to be enforced in all countries.

! Necessary regulations/statutes as well as actual action monitoring mechanisms

need to be put in place in most countries for rehabilitation of closed quarries andtheir aftercare. Strict penalties and punishment should be imposed on defaultersnot rehabilitating quarry sites after closure.

CP, ES,CW

SS1/2,SS3




E-18

SS12: Socioeconomic Development

Findings

The industry has reduced the number of workers per unit of production over the past 20 years by

approximately 50 percent.Total (direct) employment globally is estimated at approximately 850,000; including indirect employment, it isestimated to be about 1,000,000.

Companies identify projects in a number of ways:! Consistency with corporate objectives! Through plant level or employee initiatives! Through focusing on company strengths! Developing partnerships and consultation with community-based organizations.

There are a variety of ways that companies provide resources for projects:! Donations and sponsorship! Revolving credit! Leveraging funds from donor or economic development agencies! Using influence with governments or other businesses! In-kind contributions! Spinning out internal functions! Purchasing from disadvantaged suppliers.! Tendencies are to be less interested in direct financial solutions, an increasing emphasis on using the core

competence of the company and staff expertise, and, finally, environment is of increasing interest.

The business case for SD is supported by the following identified benefits:! Staff motivation due to the company being a positive contributor to the community! Cultural awareness to create knowledge of other elements of the community and foster better worker

relations! Improving future labor supply through education and training and the awareness of work opportunities in

the industry! Developing brand loyalty through customer training and creation of enterprises that boost cement

purchasing! Developing networks on major projects to establish contacts and target market! Developing trust with regulators, neighbors, and local government to facilitate negotiations for new

developments/proposals! Reputation enhancements for awareness of company contributions to the community leading to improved

consumer and investor response! Operating benefits such as easier ability to change processes or other aspects! Access to soft loans through investment finance from multi-lateral agencies.


SSLinkage

! When developing or acquiring plants, undertake socio-economic impactassessments and implement necessary mitigation measures.

! When closing or rationalizing facilities, invest in diversifying local economies andtraining redundant workers where hardship might occur. Companies shouldtherefore adopt a more structured approach to managing socio-economic issues,which includes:- a decision at corporate levels on how the company will decide what level of

resources to devote to social investments and what types of project thecompany wishes to implement or support;

- profiling of the proposed investment location and a strategic assessment of socio-economic opportunities and threats;

- project specific socio-economic assessments, including stakeholder consultation, identification of positive and negative impacts and identificationsuitable of corporate social investments; and

- monitoring and evaluating impacts and social investments through the use of KPIs, and refinement of activities.

SV, CW,RD

SS1/2,SS3,SS4,SS5,SS13




E-19

SS13: Public Policy

Findings

The major policy/regulatory challenges the industry faces are as follows:! New regulations to reduce emissions, particularly CO2 and other climate change gases! Regulations and local policies restricting the use of hazardous waste or other materials as fuels! Policies governing zoning, urban sprawl, and biodiversity conservation that impact traditional operations,

restrict expansion, or limit siting of new facilities! Emerging product stewardship policies that may require producers to limit the environmental impacts of

their products through the product life cycle and accept long-term responsibility for the disposition of their products

! Inflexible regulations that hinder the use of alternative materials in the production process

Pockets of use of “best policy practices” for evaluating policy influencing strategies include:! Participate in public policy forums and advisory groups! Establish relationships with legislators and policymakers! Conduct and contribute balanced policy research!

Review and provide input to regulations being considered! Conduct public and stakeholder involvement and education related to specific policies! Identify, evaluate, and support financial incentives and voluntary programs for innovations to promote SD! Establish constructive relationships with stakeholder organizations to develop and promote mutually

acceptable policies on SD! Actively monitor the performance of SD policies! Create databases to provide technical support to policy development! Create or enhance the capacity of institutions that develop and implement policies


SSLinkage

The industry should take a more proactive and considered approach to its policy roleby adopting, as a standard industry practice, the principal elements of the policy pro-cess model developed. Recommended dissemination and use of “best policy prac-

tices” globally. The cement industry, as it engages with various stakeholder groups,can encourage those organizations to assist the industry to achieve policies thatpromote sustainable development.

CP, SV,ES, EW,RP, CW

All SS

Three specific initiatives are recommended to create and enhance SD policies:! Create a cement policy institute (and define roles of other stakeholder groups

such as NGOs and trade associations in relation to the institute.! Set industry sustainability performance standards.! Endow a fund to promote financial incentives policies.

RP, EW,ES, SV,CP

SS3,SS5,SS7,SS8,SS9,SS10,SS11,SS12




E-20

China Country Analysis

Findings

China produces over one-third of the world’s cement, yet most facilities lack economies of scale and rely onoutdated technologies. As a result, there are significant opportunities to increase efficiency, lower energycosts, and cut pollution.

The structure of the Chinese cement industry is changing significantly both at the national administrative leveland at the company level. The number of state-owned companies has shrunk to 24% while a growing number (3% of capacity) are foreign-invested enterprises. Over half of China’s cement comes from collectively-ownedenterprises. There is a centrally-directed trend toward consolidation.

About half of China’s 8,500 cement plants are located in rural townships with less than 30,000 tpy output,almost all of which is low grade 325 cement. Average production per plant will be gradually increased throughlarger plant construction and closing of small inefficient plants with a target of 200,000 tpy by 2005.Rationalizing production by closing small, inefficient plants remains a key challenge for government planners.

The key issue for plant closures is fear of political instability resulting from unemployment. Chinese plants

employ up to 10 times the labor of their developed country counterparts. A social security system is onlyslowly emerging to deal with redundant workers. Foreign companies do not always have an option to reducelabor when involved in joint ventures or other shared ownership.

Cement production generally tracks population density but there are some areas of high concentration. Thecentral government is emphasizing development in the Western provinces to alleviate overcrowding andregional income differences. Urban land pressures are also motivating the relocation of plants outside urbancenters and more towards limestone deposits.

Low-quality cement is cheap and oversupplied while high quality (425 - 625) grades are in short supply. Amajor factor in regional price variations is the cost of coal, which is by far the dominant fuel and will continue tobe so. China does not use alternative fuels widely.

Compared with domestic consumption, cement trade is relatively small. China is, however, the secondleading exporter in the world, with about 17% of world trade. Entry into the WTO is not expected to affect thecement industry very much, but could be influenced indirectly through the increased presence of international

construction enterprises.If China were to succeed in replacing low-grade (#325) cement with that from more efficient plants, it wouldsave roughly 15 million tonnes of coal per year, improve local environmental quality, and cut greenhouse gasemissions. Cement plants are responsible for 6-8 percent of China’s CO2 emissions and closing the #325plants would reduce CO2 by roughly 30 million tpy, sulfur dioxide by 250,000 tpy, and solid waste and dust by5 million tpy.

Environmental laws have been getting more stringent, although still less than in developed countries (e.g.,100 mg/m

3versus 70 for particulate emissions in Europe). Production and profit often supersede

enforcement. Environmental regulations are often poorly enforced, although foreign companies tend to followthe spirit of the law.

Domestic financing for projects is often difficult to obtain. The central government encourages foreigninvestment both because of the capital infusion and the superior technology. The legal system remains weakbecause:! Final decision-making authority is unclear ! Laws and regulations change rapidly and are not uniformly enforced! Information is not widely and uniformly available.Even so, promising investment areas for the industry include:! Bulk cement transport and storage infrastructure! Environmental control equipment! Precalciner and dry rotary kilns! Specialty cementsChina hopes to make foreign participation account for about 20% of production, but this may be ambitious.



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