The Long Term Perspective of the Coal Industry
The demand generated by the cement industry is hard to determinatively calculate. A simple extrapolation of data will not work and some countries truly demonstrate volatile behavior when it comes to the cement production. One of the brightest examples is certainly China with its crazy construction projects that demand lots of cement and drive up the volumes of the cement manufacturing in the whole country and nearby regions.
While some countries keep constructing more and more buildings, the rate will definitely slow at some point and the demand will shrink. This means that at some point on the future the industry will hit a bottom baseline that will define the demand. A good example is a steady period between 1980s and 2000s. 20 years without any sudden spikes in the demand showed that the industry grows at a stable rate of 42 million tons per year. This means that the cement industry may hit the 5.7 billion tons by 2050.
This amount of annually produced cement must coincide with the demands of the COP21.
By that time, the average usage of coal in the industry will be around 500 million tons per year for the whole industry. Which is a roughly 30% growth compared to the consumption of coal as of right now.
Note that we did not account for a variety of alternative fuels that may play their role in changing the way the whole industry uses coal. While other fuels may seem less efficient right now, the situation may change in the nearest future.
Let’s take a minute to discuss the impact of alternative fuels and how they are used in Europe where manufacturers are racing to find the most efficient source of energy. Depending on the “quality” and versatility of the market of alternative fuels, we will see whether it is possible to substitute coal effectively.
Less than 35 years that are left before 2050 is actually enough for other regions to pick up the European example. It is expected that Europe will increase the share of alternative fuels to astounding 35% by 2020 and that the global industry may reach the same numbers by 2050. This will dramatically decrease the consumption of coal by the cement industry. While this is unlikely to happen in other countries, it is certainly a possibility. Europe is a special region where both society and politicians actively enforced the reduction of coal usage within the region. While other countries will have milder policies, we can expect that the share of alternative fuels may reach at least 25% by 2050.
If there will be an 11% change in the share of alternative fuels in the whole industry, the amount of coal consumed yearly will shrink by at least 12% by 2050 which is 2% less compared to the consumption in 2014.
Clinker. Note that the amount of clinker that is required to produce cement will likely decrease due to the usage of alternative cementitious materials. This will definitely allow to reduce the amount of coal used annually.
Various reports indicate that clinker will impact the industry less by 2050. The reduction has been visible in the industry throughout years and the usage of clinker dropped from 83% in 1990 to less impressive 75% 22 years later. Realistically speaking, there is a strong chance that the share of clinker factor in the industry will be reduced to mere 65% by 2050. This is actually possible as seen in Brazil where the clinker factor is reduced to impressive 67%.
This may reduce the amount of coal consumed by the industry as well as other factors.
Energy efficiency. It is important to note that the whole industry slowly shifts towards dry production which is more advantageous compared to the wet method. This means that the industry will not only employ this technique, but will actively search for ways to improve it.
Multiple reports show that the amount of heat of pyroprocessing equipment used by companies that produce grey cement dropped from 3.75 billion joules per ton to 3.52 billion joules per ton. This happened in less than 12 years. If this trend continues, we definitely may see that the number dropping to 2.8 billion joules per ton by 2050.
These numbers are certainly not achievable by some facilities. Such factories exist in both Europe and America. However, it is possible that many facilities will reach at least 3.3 billion joules per ton mark by 2050 meaning that the whole industry may need 12% less coal due to the fact that clinker factor is reduced so heavily.