Tuesday, September 04, 2018

Energy consumption and CO2 emissions in China's cement industry: A perspective from LMDI decomposition analysis

We analyze the change of energy consumption and CO2 emissions in China's cement industry and its driving factors over the period 1990–2009 by applying a log-mean Divisia index (LMDI) method. It is based on the typical production process for clinker manufacturing and differentiates among four determining factors: cement output, clinker share, process structure and specific energy consumption per kiln type. The results show that the growth of cement output is the most important factor driving energy consumption up, while clinker share decline, structural shifts mainly drive energy consumption down (similar for CO2emissions). These efficiency improvements result from a number of policies which are transforming the entire cement industry towards international best practice including shutting down many older plants and raising the efficiency standards of cement plants. Still, the efficiency gains cannot compensate for the huge increase in cement production resulting from economic growth particularly in the infrastructure and construction sectors. Finally, scenario analysis shows that applying best available technology would result in an additional energy saving potential of 26% and a CO2 mitigation potential of 33% compared to 2009.

Currently, China is the largest cement-producing and consuming country in the world. Cement production in China was 1.87 billion metric tonnes in 2010 (CMIIT, 2011), which accounts for about 57% of global cement production (USGS, 2011). The average annual growth from 1990 to 2010 was 11.6%, resulting in a total growth of 790% over this period along with the rapid growth of the Chinese economy characterized by the investment in the construction area (Fig. 1). The cement industry is a highly energy- and CO2-intensive industry, and the total energy use of the Chinese cement industry amounted to 4542 PJ (155 Mtce) in 2009,1 which accounts for about 7.1% of Chinese total final energy consumption and 10.1% of the final energy consumption of the industrial sector (NBS, 2011). Cement production also results in huge amount of CO2 emissions from calcinations of limestone and fossil fuel combustion. In 2009, CO2 emissions from cement production amounted to 1073 Mt, which corresponds to 15% of China's total greenhouse gas emissions (IEA, 2011). More than 80% of CO2 emissions from the construction of buildings stem from cement production (Habert et al., 2010). Further, the cement industry is considered the largest emission source for particulate matter (PM), accounting for 30% of total industrial particulate matter emissions in 2009 in China (CMIIT, 2010).
Fig. 1Sources: Chinese Cement Almanac (2009) and National Bureau of Statistics of China (2011).
Given the high importance of the cement industry with respect to energy consumption and greenhouse gas (GHG) emissions in China, cement production is increasingly the focus of energy efficiency and climate policies. In order to design efficient policies, knowledge about the influencing factors and their impacts on energy consumption and GHG emissions over time is required.
Energy efficiency in the Chinese cement sector has been intensively discussed in literature. Some studies focused either on the comparison of energy-efficiency policies (Price et al., 2001) or the cost of new technology and barriers to technical renovation (Liu et al., 1995) from an economic perspective, while other literature focused on retrofit measures, estimated conservation supply curves and energy-saving potentials from an engineering point of view (Li, 2004Lei et al., 2011Worrell et al., 2008Zeng, 2006Zeng, 2008). Hasanbeigi et al. (2010) compared the energy use of Chinese companies with international best practice and measured the average technical energy-saving potentials and costs for 16 cement plants in China. The increase of energy use observed in this study results in an important increase in CO2 emissions. By estimating the CO2 emissions from the cement industry in China, Lei et al. (2011) showed that replacing old shaft kilns by pre-calciner kilns and improving energy efficiency can effectively reduce CO2 emissions. Cui and Liu (2008) found a huge CO2mitigation potential in China's cement industry resulting from calcinations of limestone, coal combustion and electricity consumption, respectively.
Most studies discussing energy use or CO2 emissions in China's cement industry either focus on a specific year or on the overall industry level. Thus, they are not able to draw conclusions on the impact of different factors on the development of energy demand and CO2 emissions over time. Furthermore, the industry-wide studies hardly take the particular structure of a sector like the cement industry into consideration.
In this paper, we analyze the determinants of energy consumption and consequent CO2emissions in China's cement industry over the period from 1990 to 2009, based on a log-mean Divisia index (LMDI) method. Furthermore, the role of technical energy-efficiency standards in China since 2007 is discussed, and an outlook of future energy consumption and CO2 emissions under different scenarios is performed according to best available technology (BAT). Finally, we discuss the observed developments in the light of energy-efficiency policies introduced in China in the considered time period.
Such a decomposition analysis can improve the foundation for energy-efficiency and CO2mitigation policies as it reveals the contributions of different factors to the development of energy demand and CO2 emissions. The estimation of future potentials for energy conservation and CO2 mitigation further helps to identify areas of interest for such policies.
This paper is organized as follows. Section 2 gives a brief overview of cement technologies used in China; Section 3 describes the LMDI method used in the analysis and the data; Section 4 contains the results and the discussion of the findings; Section 5 extends the results by an outlook on remaining energy and CO2 saving potentials, and Section 6concludes our analysis.

2. Cement production technology in China

2.1. Cement kiln types

The cement industry production chain can be divided into four stages, from original clinker manufacturing via cement and concrete production to end use of concrete (see Fig. 2).
Fig. 2
We focus on the first two stages in Fig. 2 and distinguish between three types of key kilns for clinker manufacturing: i.e., dry rotary kilns that have new suspension pre-heaters or pre-calciners (NSP kilns), shaft kilns and other rotary kilns (including wet kilns, lepol kilns, hollow kilns) which have different specific energy consumption (SEC).
Two groups of clinker kilns are most dominant in China (the first stage in Fig. 2): shaft (vertical) kilns and rotary kilns.2 In the period before 2000, shaft kilns dominated and accounted for more than half of clinker production in the cement industry. After 2000, the advanced NSP kilns as a modern rotary kiln process developed quickly and started to dominate the cement industry in China, as shown in Fig. 3.
Fig. 3Sources: see Table 2.
The Chinese government policy aims to phase out the obsolete shaft kilns and to replace them with modern rotary kilns by the end of 12th Five Year Plan. Therefore in recent years NSP kilns have been widely used (Fig. 3). The proportion of cement production from NSP kilns rose from 12% in 2000 to 80% in 2010 (Sui, 2009Chinese Ministry of Industry and Information Technology (CMIIT), 2011). There are 241 new NSP cement lines with a capacity greater than 4000 t per day in China in 2008 (Lei, 2009). In addition, the SEC of NSP kilns are 20% lower than that of shaft kilns in China (CBMN, 2010).

2.2. Clinker additives

For a given strength of cement type, replacing energy-intensive clinker with additives (fly-ash, plaster, clay, etc.) can effectively reduce energy use and CO2 emissions in cement production. Typically, a lower clinker share also reduces cement quality, imposing a minimum need for clinker. The increased use of NSP kilns raised clinker quality, so that less clinker was required to manufacture a given strength of cement. Therefore NSP kilns allow a lower clinker to cement ratio (clinker share) than shaft kilns. The clinker share in China has declined constantly from 75% in 1990 to 62% in 2010 (see Fig. 4).

2.3. The use of waste for clinker production

The use of waste – as a substitute for coal – also plays an important role in reducing the use of fossil fuels and CO2 emissions. Currently, the use of waste as an alternative fuel (AF) for clinker calcinations is increasing in the global cement industry. The share of industrial waste for clinker calcinations has reached more than 30% in Germany, Switzerland and France (Zeng, 2006).
In China, although currently a few cement plants have begun to use solid waste as a fuel in kilns, the use of waste is mainly focused in plants close to large cities and still very limited. The wastes mainly used in China are coal gangue3 and industrial waste. In 2006, about 2.36 million tonnes of coal gangue and 3.81 PJ of industrial waste were burned as fuel in China's cement industry. This produced total energy savings of 16.12 PJ and just accounted for 0.42% of the total energy consumption of the cement industry (Zhou, 2007). For this reason, this factor is neglected in the historic analysis, whereas it is included in the analysis of future CO2 mitigation potentials in Section 5.3.

3. Methodology and data sources

3.1. Methodology

In order to analyze the relative contribution of factors influencing energy consumption and related CO2 emissions in the cement industry, we use an index decomposition analysis. Since the 1980s, index decomposition analysis has been developed and applied widely, and many different decomposition methods were proposed (Ang et al., 2000). In the past decade, the arithmetic mean Divisia index and the Laspeyres methods were the two most often used methods. Ang (2004) compared various decomposition methods and argued that the log-mean Divisia index (LMDI) analysis was the preferred method due to its theoretical foundation, adaptability, ease of use and transparency in the interpretation of results. These results are confirmed by Cahill and Gallachóir (2010), who evaluated five decomposition methods and also found support for LMDI. It was applied in several energy and environmental studies, such as industrial CO2 emissions in China (Liu et al., 2007), CO2emissions in Greece (Hatzigeorgiou, 2008), US manufacturing energy consumption (Ang and Liu, 2007) and energy consumption and CO2 emissions in Mexico's iron and steel industry (Sheinbaum et al., 2010). We also use the LMDI approach for our analysis.
Cement is produced by mixing ground clinker with additives. Energy consumption in cement production mainly consists of three parts: (i) the thermal energy consumed in the calcination process of clinker manufacturing; (ii) the electricity consumption in the process of clinker manufacturing; (iii) the thermal energy consumed for drying additives (slag powder) as well as the electricity consumption in the cement manufacturing process. Therefore, we distinguish the total final energy consumption according to the clinker manufacturing process and ancillary processes for cement manufacturing (stages 1 and 2 in Fig. 2).4

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