H. Adrian (Holcim): Green Deal means huge investment needs for cement plants

Holcim maintained its activity in Romania with no incidents caused by Covid-19. “During this period, our first concern was the safety of our employees,” said Horia Adrian, CEO of Holcim Romania. In terms of business decisions and short-term economic prospects, they are “under the spell of individual and collective responsibility for adapting to a new normal”. In Romania, just as it is the case at the level of the LafargeHolcim group as a whole, constant work is being done to improve the energy efficiency of operations and to reduce carbon emissions, investing in the best equipment and technologies available, said Horia Adrian.

How is Holcim’s activity influenced by the crisis caused by the COVID-19 pandemic?

During this period, our first concern was the safety of our employees. Therefore, we have increased prevention measures and we sought solutions to any possible problems we may have encountered, implementing many of them proactively. Thus, our regular activity continued all this time without having registered any COVID-19 case in our operations. At the same time, we have adapted our business continuity plans with multiple scenarios depending on the evolution of the situation and we have taken measures of efficiency and financial discipline, which would allow us to keep our promises to the employees and to the longer-term partners.

What are the economic prospects for the next 6-18 months on which you build your business decisions?

I believe that the evolution in the next period is under the spell of individual and collective responsibility to adapt to a new normality and to continue to respect some strict rules of hygiene and physical distancing. Only in this way will we all be able to carry out our activity safely and give a new impetus to the economy. At the same time, the state will play an important role in revitalizing local businesses. I think that it will be necessary to reschedule the calendar of taxes payments for the companies affected by the pandemic and an infusion of state investments will also be needed. It would also be a good time for the Romanian state to start new projects in the construction area, such as, for example, the expansion of road infrastructure. Public investment in the construction sector proved to be a good tool for reviving the economies of many countries in 2008 and could significantly reduce the impact of the crisis on the Romanian economy.

What are the main elements of the energy strategy at the level of the Holcim group in Romania – are there any annual targets?

Cement production requires large amounts of heat and electricity. We work constantly, both at the level of Holcim Romania and in the entire LafargeHolcim group to improve the energy efficiency of our operations and to reduce our carbon emissions, investing in the best equipment and technologies available. In the last 30 years, at the level of the group, the energy consumption needed for production has decreased three times, thus making us one of the most efficient cement producers in the world in this respect. In Romania, our factories in Aleșd and Câmpulung use a series of alternative processes such as co-processing waste and recovering residual thermal energy from the cement production process to reduce our dependence on energy generated by burning fossil fuels.

What are the tools to achieve such goals and what are the key indicators you are monitoring?

Co-processing of waste is a method of full recovery, in the process of cement production, both of energy and of the mineral content. This solution allows the partial replacement of traditional fuels and raw materials with alternative resources, derived from waste.

Industrial co-generation means the simultaneous production of electricity and thermal energy, necessary for the industrial process of cement production. Basically, it means the continuous recovery of residual thermal energy resulting from the production of cement clinker and its simultaneous transformation into electricity. The Aleșd plant was the first cement factory in Romania to implement this innovative technology, and approximately 15% of the electricity needed for its activities is now provided by the co-generation plant.

Beyond COVID-19, we are in a period dominated by the oil price war, globally, with an impact also on the natural gas markets in Europe. In a short time, Romania promises to completely liberalize electricity and natural gas prices. What is the anticipated impact on competitive industrial consumers’ markets?

As I said before, cement production requires large amounts of heat and electricity. As a result, it is a process sensitive to energy price fluctuations, with major impact on the financial performance of our company. I believe that the liberalization of the prices for electricity and natural gas can increase the competitiveness of the local market, making it more attractive for large-scale investments in industry, but also supporting existing production companies, including Holcim Romania, to be more efficient.

Have you already carried out an analysis of the anticipated impact of European Green Deal policies on the activities in the cement industry?

LafargeHolcim supports the Green Deal objectives and is committed to helping achieve a carbon-neutral economy by 2050. A competitive European industry anchored in this approach needs similar conditions in terms of environmental costs enforced for importers outside the European common market, and a proper adjustment mechanism at the EU border is essential in this regard. This mechanism needs to be tested and introduced in parallel with the emissions trading mechanism until it becomes fully operational and proves effective in fully avoiding the risk of carbon relocation.

A preliminary analysis of the total impact of European Green Deal policies estimates enormous investment needs for cement plants that are already at the forefront of technology, such as those we have in Romania, which reach levels similar to investment in a new factory outside the EU.

For such investments to be made within the borders of the European Union, they must be supported by co-financing from the funds dedicated to the implementation of the European Green Pact, and also by policies to support demand for low and carbon neutral products and solutions.

What is the group’s policy on energy consumption and environmental impact?

In our long-term strategy, sustainable development is a key element and a direct consequence of how we adhered to the basic principle of our organization: to build the foundation of a prosperous future.

In our vision, by 2050, the built environment will be neutral in terms of carbon emissions and circular in terms of resource use, and the production processes, products and solutions we offer will have a beneficial impact on the environment. We have ambitious intermediate targets in this regard. Achieving these goals will help us remain the most efficient company in our industry in terms of energy efficiency and CO2 emissions.

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This interview firstly appeared in the printed edition of Energynomics Magazine, issued in July 2020.

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