Another California Industry Capitalizing on Energy Efficiency Opportunities

By Katie Hsia-Kiung

After almost seven years since California’s landmark global warming law was passed, and after nearly a full year of implementation of the nation’s most comprehensive cap-and-trade regulation, it is apparent that major companies have begun making significant investments to improve efficiency and cut pollution.

Forward thinking investments have already been observed among California’s biggest refineries, many of whom have dedicated significant capital to explore and implement on-site energy efficiency improvements. Now, according to a follow-up report released last week by the California Air Resources Board (CARB), the same can be seen among California cement manufacturers.

In this report, CARB identified 79 efficiency improvement projects that have been completed, scheduled, or examined by the state’s cement production facilities. The majority of these projects focus on improvements to the facilities’ thermal equipment (the heat making components needed to turn cement feedstock, limestone, into a powdery substance called clinker).

The total potential greenhouse gas (GHG) reduction from these projects is about 0.68 million metric tons of carbon dioxide equivalent (MMTCO₂e), which is equal to the emissions from approximately 141,000 passenger vehicles.

Despite the substantial one-time investment that exists for some of these projects, it is clear that cement manufacturers are thinking about the long term benefits of energy efficiency improvements.  Of the opportunities identified by CARB in the report, approximately 93% have already been completed or started. What’s more, these projects aren’t just saving money for companies; they are helping to slow climate change.

As seen by date from the state’s mandatory emissions reporting data, between 2010 and 2011, reductions of climate change pollution have already been recorded in this sector. For example, Cemex Cement, the biggest GHG emitter out of all of California’s cement manufacturers in 2009, was able to reduce emissions from its Victorville plant by about 16,000 metric tons. Earlier this year, the company announced the commissioning of four wind turbines that will generate up to 6.2 megawatts of energy at their Victorville and San Bernardino County sites as well. From this investment, Cemex predicts an additional reduction of 11,000 metric tons of CO₂ emissions annually.

The facility with the most efficiency projects in the pipeline is Mitsubishi Cement, with 18 projects that have the potential to reduce the facility’s emissions by 211,100 MMTCO₂e – over 20% of its total climate change pollution. Furthermore, if Mitsubishi implemented these projects, as the company with the greatest amount of toxic air contaminant releases according to data from the US EPA Toxic Release Inventory, Mitsubishi could go a long way toward improving the air quality and health outcomes of communities living near the plant in Lucerne Valley, California.

It is clear from this report that California’s cement manufacturers, like the state’s refineries, are taking the task of reducing their greenhouse gas emissions seriously. They are obtaining ENERGY STAR plant certifications and investing in long-term efficiency projects that will pay back on their monthly energy bills and keep their emissions low. This is especially important as cement production in the United States begins to rebound from the economic recession, with predicted growth of approximately 8% in 2013.

With a bright production outlook ahead, it is important that the industry’s leaders make decisions now that will ensure GHG emissions do not increase in step with increasing cement production. California’s cap-and-trade program is, and will continue to be, an essential mechanism to spur innovation to achieve this goal by holding the state’s industries accountable for their carbon emissions. Seven out of the eight facilities included in this report are compliance entities within the cap-and-trade program and are required by law to hold emissions allowances that cover their carbon emissions.

Even with energy efficiency efforts already in place, there is still much more that can be done; according to Ernest Orlando Lawrence Berkeley National Laboratory, the cement industry in the United States can cut energy use by 67% through upgraded energy management practices and investments in new technologies, which could translate to $1.1 billion in energy cost savings. CARB expects to have corresponding data on the hydrogen sector, the power generation sector, and oil and gas production in the next few months. Let’s hope for more promising results.