Ceramic makers face up to dangers of EU carbon challenge
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Bricks, plates, roof tiles, bathroom sinks, aircraft components, artificial joints, and steel furnace linings . . . they are all variants of an essential ingredient of the modern world: ceramics.
But the need for ceramics manufacturers in Europe to reduce their greenhouse gas emissions is often overlooked when compared with other polluting heavy industries, such as steel and cement making. In part, this is because the sector is so fragmented.
Ceramics first emerged in the Palaeolithic period more than 25,000 years ago. The development of high-temperature furnaces has made such materials ubiquitous and, today, the manufacture of these fired, corrosion-resistant materials accounts for 1 per cent of Europe’s industrial carbon emissions.
Raw materials — primarily clay — are combined with additives, powders and water for drying and firing in kilns that typically burn above 1,000C. Ceramic manufacturing is therefore difficult to decarbonise because kilns use lots of energy, usually supplied by natural gas. CO2 emissions are also a natural byproduct of the sintering that the raw materials undergo.
However, all European manufacturers face the task of achieving a historic transformation in how they work. The EU is mandating a 55 per cent reduction in greenhouse gas emissions below 1990 levels by 2030 and aims to reach net zero by 2050.
This means that the EU’s ceramics industry — annual turnover €26bn — quickly needs to wean itself off processes that depend on fossil fuels. The UK also aims to become a net zero economy by 2050.
Since 1990, producers across Europe have managed to reduce emissions by a third — mainly by switching from coal to natural gas and improving energy efficiency.
To cut carbon footprints further, though, ceramic manufacturers need to invest heavily in alternative means to power their furnaces — either hydrogen, electrification or biofuels. They must also consider modifying the raw materials and deploying carbon capture technology to deal with so-called ‘process emissions’.
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Rather than making a big bet on a single technology, Renaud Batier, director-general of Cerame-Unie, the European ceramics trade body, says the best option for fuel depends on a factory’s location in a particular EU member state and its energy policies.
However, ceramics is a hugely diverse and dispersed industry: Cerame-Unie divides it into nine sectors, all using different technologies. Sites are often small and located near raw materials. Ceramics companies are mostly classed as small- or medium-sized businesses.
That affects the ability to implement change. The scale and financial power of steel manufacturers, such as ArcelorMittal and SSAB, can help drive that sector’s investment in zero-carbon technology. But, in comparison, about 80 per cent of Europe’s ceramics manufacturing is done by more financially-constrained SMEs.
“Ceramics companies are much more independent so don’t have the capacity for capital investment in the way that larger companies may have,” says Ian Reaney, professor of ceramics at the University of Sheffield.
Stephen Harrison, chief executive of Forterra, the UK’s second-largest brickmaker, adds that consolidation of manufacturing would not be a practical solution to faster decarbonisation.
“The benefit of bricks is that they are made locally in most cases and transported short distances to the market,” he says. “A mass consolidation would mean a massive increase in transportation from a small number of manufacturing sites to customers all over the world.”
Ceramics companies can also struggle to access government funding for pilot projects and demonstrations of greener technologies. Reasons for this might be because they are too small, or located far from larger industrial clusters eligible for research and development support with hydrogen or carbon capture projects.
Laura Cohen, chief executive of the British Ceramic Confederation, argues that initiatives such as the creation of an industry-wide research hub are needed to tackle these problems.
She says: “The sector is really feeling left behind compared with other UK energy-intensive and industrial sectors on practical and tangible help to improve international competitiveness [and] on so many current and future energy and carbon issues.”
The fragmentation of European ceramics manufacturing brings other difficulties, too. It means that the sector now accounts for 10 per cent of all industrial sites that fall under the EU emission trading system — even though it is responsible for a much smaller share of carbon emissions created by industry as a whole.
“It’s a huge administrative burden for all of these small emitters,” says Batier.
Some ceramics executives argue that the EU’s targeted pace of change in emission reductions is too quick to achieve — especially as the lifespan of a kiln can be as long as four decades.
Spain’s Grespania produces 10 million square metres of ceramic tiles a year but chief executive Luis Hernandez is less optimistic about the future, despite strong demand. He says the EU’s 2030 environmental target is “impossible for us to reach” because no cost-competitive alternatives to natural gas currently exist.
“The target is completely absurd,” he says. “It means our industry will disappear if we follow this path.” He argues that, even if alternative energy sources such as electrification or hydrogen become viable, the industry will need at least 15 years to transition from that point. Cerame-Unie says it does not envisage any significant increase in the availability of green hydrogen as an alternative fuel for the sector until 2040.
These environmental targets add to existing concerns over the competitiveness of European ceramics groups in world markets compared with foreign exporters.
EU tableware and tile makers are already protected by anti-dumping duties against Chinese imports and investigations continue into tiles made in Turkey and India. But producers are grappling with the recent surge in energy prices, which typically account for 30 per cent of their cost base, as they face the cost burden of yet higher carbon prices under the EU emissions trading scheme.
Ceramics executives say the imposition of a carbon border adjustment measure would help European producers remain competitive against imports that are not subject to such environmental policy burdens.
But, they add, more measures are needed to help exports, support the longer-term case for investment in lower-carbon technology, and avoid inadvertently offshoring production and emissions to less regulated parts of the world.
“At the moment, you are emptying the coffers of the companies,” says Harrison. “But, if that money [from carbon taxes] was used for innovation, you would inevitably see a quicker route to decarbonisation.”
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