Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.
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July 26, 2023
Should We Stop Building New Homes?
Real estate creates 30% of our carbon emissions and uses 40% of our energy, so it has become an important target of climate activists. An important ingredient in the emissions is concrete because of the coal burned to heat the limestone that forms the basis for Portland cement and the energy needed to turn it into concrete. Because cement accounts for between 4-8% of global emissions. Startup companies are working to find fewer polluting ways of making cement and concrete. One approach is to switch to building using ‘mass timber’. Wood can be a great way to reduce carbon emissions in building conventional buildings. And now there is a move to encourage remodeling that releases much less carbon than building new with significant embedded carbon in the construction materials. Look for a housing transition. READ MORE
Should We Stop Building New Homes?
Investors and economists focus on the latest housing data – new home starts, building permits, used and new home sales, and housing vacancy rates – for indications of the health of the real estate sector. Real estate represents 17% of the nation’s GDP, but importantly is the foundation of wealth building for the middle class and provides insight into the health of the flow of goods, services, and income for millions of Americans.
According to the United Nations Environmental Program, the real estate sector produces around 30% of the world’s annual greenhouse gas emissions and consumes nearly 40% of the world’s energy. Ten percent of those emissions come from cement, a key building material for world economies. Concrete is the second most used material in the world after water and it is the most used construction material. It is estimated we produce around four tons, or just under 60 cubic feet (a cube measuring four feet on each side), for each person in the world annually. It represents between 4-8% of global emissions. If cement were a country, it would rank fourth in annual carbon emissions.
As the world focuses on decarbonization in addressing climate change, cement and real estate are moving into the target zone, after aviation and shipping (industries we addressed in Energy Musings, July 19, 2023). Eliminating carbon emissions from cement is hard. That’s because manufacturing it is highly energy- and emissions-intensive since extreme heat is needed to produce it. Emissions come directly from the heating of the limestone that releases CO2. The burning of fossil fuels to heat the kiln indirectly results in the release of CO2.
Producing a ton of cement requires about 4.7 million BTU of energy because the kilns must be heated to 2700o F to break down the limestone which is then mixed with gypsum to make clinkers that are ground up to make cement. The energy needed to heat the kilns is the equivalent of burning 400 pounds of coal, which releases nearly a ton of CO2. One way to cut emissions is to switch the kiln’s fuel source from fossil fuels to renewable electricity, but that can be a challenge because of the energy density of coal that allows it to burn extremely hot and the level of heat needed.
In Greece, according to a European energy podcast, the government is working on a plan to switch kilns from coal to renewable electricity. The problem, according to the owner of the nation’s largest cement manufacturer, is that amount of renewable energy currently available is insufficient to power all his kilns, let alone any of those of his competitors. Therefore, the government is trying to ramp up investment in new renewable energy plants. However, because renewable energy is part-time, the grid is susceptible to brownouts and blackouts. The cement company’s CEO said the loss of power for four hours will destroy a kiln. To protect his kilns, he is contracting backup power to the supply he receives from the electric company because he expects more outages. This becomes expensive insurance which will force him to raise the price of his cement.
Cement companies worried about the destruction of their kilns from blackouts have few alternatives other than independently securing backup power or praying a lot. Could there be other solutions to cement’s emissions problem? Are there ways to make the process more efficient, such as improving how kilns work? Maybe cement can be made from lower-carbon raw materials, or produced differently, such that when blended with the other necessary materials it will still make a product equal to traditional concrete.