专家电话会议要点脱碳水泥的前景

Restricted - External European Construction, Building Materials& InfrastructureNEUTRALEuropean Construction, BuildingMaterials & InfrastructureTom Zhang, CFA+44 (0)20 3555 1395tom.zhang1@barclays.comBarclays, UKPierre Rousseau+33 (0)1 4458 3377pierre.rousseau@barclays.comBBI, ParisKatherine Hearne+44 (0)20 7773 2041katherine.hearne@barclays.comBarclays, UK •When asked how the incumbents are likely to respond to the rise of these alternative binder•solutions,Fabrizio shared his view that the sector will adopt an accommodation strategyand avoid being aggressive on pricing up until a point.Historically, these large nameshave opted to act rationally. However, should these new entrants start to represent ameaningful competitive threat (winning >20% market share), it is more likely that we will seea more drastic response from the traditional producers. We think that this could involve moreaggressive pricing or potentially M&A opportunities for names like CRH and HeidelbergMaterials.The demand picture for decarbonised material•Demand for decarbonised cement is predominantly driven by a desire from customers to•make use of green material certificates in their marketing. Today, this demand is markedlystronger in the residential market, in part due to the fact that in general, the technicalrequirements for these projects are not as high as for public projects such as tunnels andbridges.•Based on his experience, Fabrizio noted a lack of interest on the part of customers in the•means in which material is decarbonised (i.e.,offsets,versus mass-balancing, versus carboncaptured), and instead the focus of customers is purely on obtaining green certificates.•In terms of pricing, low carbon cement products are reportedly achieving up to c15% premia•versus grey cement, while the premium paid for zero-carbon cement is likely to be more than30%. Any further inflation would likely result in demand destruction – for example if zero CO2cement prices were to double, that could prove to bedifficultto digest for end customers.Carbon capture utilisation and storage (CCUS) and the cement industry•On carbon capture, Fabrizio emphasised the point that we made in our primer note•(Decarbonising Cement Series - Part One): that there is not yet a single proven CCUStechnology for cement. Moreover, the suitable technology willdifferon a site-by-site basisdepending on a range of location-specific factors. Indeed, many of the CCUS options beingexplored today are still at the post-start-up phase, whereby pilot plants have only recentlybeen constructed and more time is needed to demonstrate success.•Fabrizio noted that upgrading existing plants to optimise production in terms of substituting•clinker and using alternative fuels costs an estimated $25m. We estimate, based on theprojects announced to-date, that the capex intensities of carbon capture are in excess of 10xhigher than this.•Crucially, Fabrizio makes the point that it is unlikely that CCUS technology will be possible to•integrate in all plants.He expect that as much as 15-20% of European capacity will not beupgradable and could face shutdown in the coming years.We think there is potentiallyupside to this figure: HEI has previously noted that a longer-term route to net zero by 2050could entail integrating CCUS at third of sites, decarbonising another third via other means,and ultimately removing the final third of capacity.•The process of shuttering capacity is then likely to entail some cost to the producers given•that, unlike when a site is moth-balled, if operations are ceased indefinitely, the land has tobe treated and restored incurring environmental liabilities.Construction demolition material•Fabrizio highlighted the potential use of recycled construction demolition material as a•substitute for clinker. He pointed out that in theory each and every part of the building couldbe recycled and re-used; however, this is clearly not economically viable due to the requisite2 energy costs. Atrade-offtherefore exists between the emissions-saving benefits of recyclingand the costs entailed.Regulation is likely to be the key driver of investment in this area: we are already seeingexamples of public bodies requiring minimum levels of recycled material to be used in civilworks projects. While no country has yet mandated this as a standard across all constructionactivity, there is an increasing trend in this direction, with several projects in Switzerland, andalso France, that have specified the use of recycled materials. ••3 Analyst(s) Certification(s):We, Pierre Rousseau and Tom Zhang, CFA, hereby certify (1) that the views expressed in this research report accurately reflect our personal views aboutany or all of the subject securities or issuers referred to in this research report and (2) no part of our compensation was, is or will be directly orindirectly related to the specific recommendations or views expressed in this research report.Important Disclosures:Barclays Research is produced