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Government organizations, worldwide, are facing a significant challenge in climate change. Many have announced net-zero goals and to achieve them decarbonization of the cement industry will play a critical role. The cement industry’s contribution to carbon emissions is significantly high, owing to the energy-intensive process of producing cement that requires heating raw materials at high temperatures.
For reducing carbon emissions in the cement sector, significant investment is required towards new technologies and processes. In line with the government's net-zero goals, several global cement makers have announced multi-billion-dollar investments toward decarbonization over the last few quarters.
In addition to the private sector investment, government organizations have also announced significant investments to decarbonize the cement market. In the United States, for instance, the Biden Administration revealed that it is directing US$6 billion in funding to speed up the decarbonization projects in heavy industries such as cement, steel, and aluminum.
Under the Industrial Demonstrations Program, the United States government will provide competitive grants to industries, technology developers, and universities for up to 50% of the total cost of projects that are aimed at reducing carbon emissions. Notably, the funding for such projects will come from the infrastructure bill passed by the President in 2021 and the Inflation Reduction Act, signed in 2022.
The Department of Energy, in the United States, is also offering grants to cement makers to advance cement carbon capture. Heidelberg Materials, for instance, announced that the firm is set to receive US$8.9 million in funding from the Department of Energy. The capital will be provided through the Carbon Storage Assurance Facility Enterprise (CarbonSAFE) initiative. The firm will be using the funding from the Department of Energy to study the subsurface geology for suitability for the storage of carbon dioxide at its plant in Mitchell, Indiana.
Going forward, ConsTrack360 expects more cement manufacturers to receive funding from various government bodies and organizations, which will aid them in achieving their net-zero goals. Carbon emissions have emerged as a growing problem and are affecting every part of the world. Consequently, to reduce carbon emissions and achieve net-zero goals, there is a need for a concerted effort from all stakeholders to address it.
Cement makers such as Heidelberg Materials, LafargeHolcim, and Cemex have all committed to reducing their carbon emissions significantly over the next few years, This is a critical step towards achieving global net-zero goals and addressing the challenges posed by climate change.
Over the next five years, ConsTrack360 expects more government institutions to pump billions of dollars into the cement industry, as part of their broader strategy to reduce carbon emissions and achieve net-zero goals. The investment and support from the government is, therefore, expected to drive innovation in the global cement market from the medium to long-term perspective.
In terms of the cement industry outlook in 2023, the market is well poised to record strong growth over the next few quarters. Increasing spending on infrastructure development and higher undertaking of housing projects will keep driving cement consumption globally over the next three to four years.
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