China’s cement sector needs carbon trading system akin to Europe to tackle emissions, industry expert says
- A carbon trading system that promotes tighter cement supply and higher prices can induce industry to undertake investment, Ian Riley of World Cement Association says
- China’s aluminium, cement and steel will be impacted by the European Union’s carbon import duties in 2026
China’s cement manufacturers, who have to invest in expensive carbon capture and storage (CCS) equipment when Beijing introduces emissions trading quotas by next year, can draw on Europe’s experience to design their own system, according to an industry veteran.
The key for China’s cement makers to undertake such investments is higher profitability, said Ian Riley, CEO of London-based World Cement Association.
This can be facilitated by a trading system that allocates a level of free quotas that can promote tighter supply and higher prices, he told the Post ahead of the association’s seventh annual conference in Nanjing, capital of China’s eastern Jiangsu province, this weekend. Industry leaders are expected to discuss challenges such as cost reduction and carbon trading.
“If you look at the finances of the Chinese cement companies, they might be able to get loans from policy banks [to install carbon capture equipment], but on the commercial market nobody will lend them the money,” he said. “The government has to do something to make it work. I think the European model is probably [a good reference].”
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In the European Union, free emission quotas – less than industry demand – are allocated to cement producers annually, which has curtailed supply as producers try not to exceed their quotas, said Riley, a former China head of Switzerland-based LafargeHolcim and former vice-president of Wuhan-based Huaxin Cement.