OnSeptember 12, California’s legislature passed two landmark climate disclosure laws. Senate Bill 253, the Climate Corporate Data Accountability Act, and Senate Bill 261, the Climate-Related Financial Risk Act, require disclosures of greenhouse gas (GHG) emissions and climate risk for California companies exceeding certain revenue thresholds. On October 7, Governor Gavin Newsom signed both bills into law.
Here are some key points on each bill:
Some key pieces of both laws will need clarification during the rulemaking process. At the forefront are those raised by the Governor around the implementation deadlines and reporting challenges. The Governor has instructed the California Air Resources Board (CARB), the agency tasked with implementing the program, to monitor the financial impact on businesses closely. Additionally, policymakers will have to define what it means to conduct business in California and provide guidance on reporting in a manner “easily understandable and accessible” for stakeholders.
The passage of these laws in California could impact the SEC rulemaking process. Since thousands of companies would already be required to report under the California disclosure laws, the cost-benefit analysis for the SEC rule would improve, making it easier to issue a final rule. As it stands, the SEC is expected to vote on the climate disclosure rule by the end of October.
Our Sustainability, Policy, and Advisory team is equipped to answer questions related to these new laws and help companies prepare for compliance. Contact us today at firstname.lastname@example.org or through our contact page.
ClimeCo is a respected global advisor, transaction facilitator, trader, and developer of environmental commodity market products and related solutions. We specialize in voluntary carbon, regulated carbon, renewable energy credits, plastics credits, and regional criteria pollutant trading programs. Complimenting these programs is a team of professionals skilled in providing sustainability program management solutions and developing and financing of GHG abatement and mitigation systems.
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Cement is a powdery substance that can be mixed with sand, water, and gravel to form concrete.
Most people are familiar with cement, the key ingredient in concrete, but few are likely aware of how foundational this material is to contemporary life. Buildings, roads, bridges, canals, sidewalks, railways, ports, power lines, wind, and solar farms… nearly all infrastructure requires cement and lots of it. The International Energy Agency estimates that nearly 4.3 billion tons of cement were produced in 2021 alone, making enough concrete to build the equivalent of over 2,800 Hoover Dams.
And this number will only grow. By mid-century, the global population is expected to approach 10 billion people, over two-thirds of whom will live in cities, according to the UN Department of Economic and Social Affairs. Add to that the massive buildout of electricity, renewable energy, efficient transportation, and carbon capture infrastructure required to support a decarbonized society, and the need for a significant increase in today’s already record-high cement production levels becomes abundantly clear.
Why are cement emissions so difficult to reduce?
There is, however, a fatal catch to this skyrocketing demand: cement, as it is produced today, has a tremendous greenhouse gas footprint. And decarbonizing isn’t as simple as substituting coal with renewable energy or electrifying vehicles. At least half of all emissions generated from the production of Portland cement (the global standard) are released during production through the creation of “clinker,” one of the primary steps in cement production.
Clinker is produced in giant kilns, where limestone and other minerals are superheated to temperatures up to 2,700 degrees Fahrenheit. The chemical byproduct of this process is tremendous amounts of carbon dioxide (CO2): in the United States, one metric ton of CO2 is emitted for every metric ton of Portland cement produced. Because of the difficulty in avoiding the process emissions from this critical step in production, cement is considered a “hard-to-abate” industry.
With such huge volumes of cement produced each year at such high emission rates, the cement industry has become one of the most carbon-intensive on the planet, contributing approximately 2.4 billion metric tons of CO2. That’s more than all aviation and maritime shipping emissions combined, and these will only continue to increase unless rapid steps are taken to reduce cement’s carbon intensity.
How can we reduce cement’s hard-to-abate emissions?
With the increasing demand for infrastructure paired with the urgency for decarbonization, how can the cement industry balance this paradox? Unsurprisingly, there is not a single or simple solution.
Replacing traditional limestone-derived clinker with alternative materials; and
Deploying carbon capture utilization and storage (CCUS) technologies.
Each pathway can have a significant impact on lowering the carbon intensity of cement; however, only a couple of technologies can reduce the troublesome emissions released during clinker production – clinker replacement and CCUS.
Clinker Replacement: In certain applications, clinker can be at least partially replaced with alternative products called supplementary cementitious materials (SCMs). Typical SCMs are byproducts of industrial processes, such as coal and steel production; however, transitions in these industries, such as the closing of coal-fired power plants and the shift to more efficient steel-production furnaces, have limited the availability of these commonly used SCMs, creating a gap between supply and demand. Some companies have launched demonstration projects to produce additional clinker replacements, such as fly ash harvested from landfills and naturally occurring substances—known as “natural pozzolans”—like volcanic ash. But producing and treating these materials so that they can be used in cement is complicated and expensive, and they have not yet reached the scale needed to meet the worsening SCM supply void.
Carbon Capture Utilization and Storage: CCUS—in which the CO2 released in clinker production is captured and stored or used in other applications—is another key approach to reducing cement’s process emissions. Very few CCUS projects currently exist, especially at cement plants. Nearly all CCUS projects worldwide are still in the pilot phase as the technology faces substantial implementation challenges and is extremely cost-prohibitive.
Nearly 4.3 billion tons of cement were produced in 2021, which is enough concrete to build the equivalent of over 2,800 Hoover Dams. Leveraging the Voluntary Carbon Market
For hard-to-abate sectors to meet net-zero targets on time, they must work together to employ a mix of proven and emerging technologies, such as clinker replacement and CCUS. But how can the industry overcome existing economic and technical challenges to scaling these technologies? The voluntary carbon market could be an important lever in bringing new SCMs to market and making CCUS more economically viable.
Today, there are a growing number of opportunities for the cement industry to generate voluntary carbon credits. One of the most trusted carbon offset registries, the Climate Action Reserve, recently announced the development of a Low-Carbon Cement Protocol that will incentivize the production of innovative SCMs to address the current supply gap. In addition to tax incentives, new opportunities are also emerging to generate carbon credits from CCUS projects. The cement industry can leverage the voluntary carbon market to direct much-needed financing to the sector and accelerate the road to decarbonization.
About the Authors
Kayla Carey is a Manager for Program Development, specializing in decarbonization for hard-to-abate sectors. With experience in sustainability management and energy policy, she helps energy and industrial clients navigate environmental markets and develop new quantitative methodologies. She holds a master’s degree in Environmental and Natural Resources Policy and a Bachelor of Arts in Ecology and Evolutionary Biology, both from the University of Colorado Boulder.
Andrew Primo is a Manager on ClimeCo’s Program Development team, based out of Denver, Colorado. He assesses the feasibility of new emission reduction projects in hard-to-abate sectors, including heavy industry, waste management, and shipping. He works with corporate partners and carbon registries to develop new technical methodologies for carbon crediting programs.