Public consultation comments andresponses
Cement Criteria

Documents Supporting this document
Information to support issuers and verifiers is available at www.climatebonds.net/standard/cement as follows:
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•
•
•
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Cement Background Paper: complete details on why the criteria were chosen
Cement Criteria document: the complete Criteria requirements.
Cement Frequently Asked Questions (FAQ’s)1
The Climate Bonds Standard: contains the requirements of the overarching CBS
The Climate Bonds Standard & Certification Scheme Brochure: provides an overview of the Climate Bonds Standard &Certification Scheme, of which these Criteria are a partFor more information on Climate Bonds and the Climate Bonds Standard and Certification Scheme, see www.climatebonds.net.

1 Published post-public consultation.

Category /QuestionNo.

Feedback Received

Response

Scope of
Activity1

Whilst we understand that the scope does notinclude concrete, as clinker substitutes are
addressed, we believe it would be better to also
address cementitious materials in concrete (asthe additions can either be made at the cement
or at the concrete stage)Because the Cement Criteria are focused on
cement production, the scope does not include
blending in the concrete mixer. This practice leads
to poorer performance, and therefore the TWG
view is that this should not be changed.

2

Criteria document:

Criteria document:

1.

1.

While it is acknowledged Carbon Capture andUtilisation (CCU) holds considerable promise,
cement production facilities utilising suchtechnology cannot yet be certified. This is notdue to opposition to the principle of CCU in
cement. Rather, there was insufficient time for
the TWG to determine robust criteria aroundwhat uses or ‘utilisation applications’ areconsidered appropriate. Future versions of thecriteria will attempt to widen the scope toallow for eligible CCU applications. This does
not apply to CCS, which is within scope. This
will be clarified in the documents.

2.

Cement producers using fly ash and slag to
reduce their cement emissions are not outsideof scope. Rather, for the avoidance of doubt,‘production of’ these SCMs (i.e., coal energy
and steel production) cannot be part of bondproceeds under these criteria. Climate Bonds
does not see a need for a cut-off date,although it is well noted that beyond 10-20
years we expect such materials to be lower inavailability. Rather, the Cement Criteria will be
regularly reviewed. As part of these reviews,
the availability of more suitable SCMs and fly
ash and slag will be considered and thus
whether preference should be given to other
SCMs.

Section 2.3 on page 8 should clearly
indicate that the threshold calculation
includes the amount of reduction using a
CCUS technology but the technology isoutside of the scope unless setting robust
criteria. The reason is as follows;
According to the IEA reports, a volume of
CO2 reduction by CCUS in the cement
industry is extremely large compared toother sectors, and the specific “net”
emissions from cement production shownin the TPI’s table also seems to be taken
into consideration of the reduction using
CCUS.
On the other hand, since “assets out of
scope” shown in this section on page 8
does not include CCUS activities, the reader
may misunderstand to exclude the CCUS
technology in the the threshold calculation.

2.

SCMs such as Slag and Fly ash are currently
considered to be very effective to reduce
CO2 emissions from cement production
since there is no alternative reduction
measure.
Therefore, until an implementation of
innovative technologies, it should beapplied for the use of Slag and Fly ash as atentative reduction measure for a limited
period of 10 or 20 years while those areavailable.

SCMs are already implicitly favoured by thecorrection factor method. The factor is
calculated on the basis of pure dilution, but
SCMs are not inert, therefore, a reduction of
20% of the clinker content would lead to astrength lowered by less than 20% (in practice,frequently increased by some amount).

Background document:
It is fully acceptable to specify in the activities of
the cement industry shown in Section 4.2.
However, regarding the "organizationalboundary" of the industry, please refer to thefollowing details defined in ISO 19694-1 andISO/DIS 19694-3;

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

Background document:
3.

The commentary on the ownership is welltaken. However, the issuer must nonethelessinclude the scope of emissions laid out insection 4.2.4 of the Criteria document. Issuers
may use relevant ISO Standards or GNR
reporting mechanisms so long as the scope of2

The organization shall consolidate its facilitylevel GHG emissions by using one of thefollowing approaches:

emissions stipulated are addressed.

a) control: the organization accounts for all
quantified GHG emissions from facilities overwhich it has financial or operational control; orb) equity share: the organization accounts for its
portion of GHG emissions from respective
facilities.
3

1.

2.

3.

About fly ash and blast furnace slag
In Japan, it is expected that the blast
furnace will be continued to use at least
before 2040, when the alternative carbon
neutral furnace or high quality electric arc
implemented. Considering there are huge
fly ash and blast furnace slag produced, it isreasonable to utilize them as far as suchtechnologies are transitionally operated.
About the practicability of limestone,
calcined clay.
From Japanese academia and experts’opinions, there are still doubt in its
feasibility. It has risks to rely heavily onthese alternatives in mid-term.
About utilization of waste
In Japan’s value chain, the cement
industries take an important role to utilize
wastes. This definitely reduce the waste
amount sent to final landfill site.
Could you add the technology development
or facilities which utilizes more waste
mixing in the process of cement
production?

1.

Climate Bonds and the TWG agree with thisviewpoint and as such cement producers using
fly ash and slag to reduce their cement
emissions are not outside of scope. Rather, forthe avoidance of doubt, ‘production of’ these
SCMs (i.e., coal energy and steel production)cannot be part of bond proceeds. Note, thisdoes not apply to legacy fly ash deposits.

2.

The TWG view is that industrial deployment ofcalcined clay has started, and they expect it togrow considerably. As such, the TWG sees noneed to restrict use of calcined clays. As withany other SCM, these criteria address theclimate credentials of various solutions, nottheir economic or market feasibility. Calcined
clays are seen as a promising SCM from anemissions standpoint and thus are notexcluded.

3.

Burners and kilns which can burn alternative
fuels such as waste-derived fuel are eligible.
However, these burners can also burn fossil
fuels. As such, it is hard to guarantee that aburner will burn only waste fuels. The Criteria
therefore allow waste burning (with key
caveats) in cement production, but the facility
must meet the relevant thresholds. Sorting ofwaste or pre-processing facilities alongside
would have to meet the Waste Management
Criteria.

We concur with the proposed scope.

No change needed.

Proposed Scope

Note as above, however, that fly ash and slag are
not excluded from the Criteria. Rather, companies
cannot include increased use of such materials intransition plans for meeting future decarbonisation
pathways. This has been clarified in the Criteria.

The proposed scope in Draft Criteria andBackground Paper, should cover all stages of
production of blended cement.
At this time, key exclusions include;- Concrete and associated activities- Emissions from quarrying and transport- Clinker by fly ash should be excluded. Their
supply is expected to reduce in the future andthey cannot be part of a long-term
decarbonisation plan
Rationale

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative3

We based our assessment of the proposed
scope on the quantity of emissions produced ateach stage of the production process.
A recent IFC study on cement production (IFC,2021) indicate ~90% of the carbon emissions(~50% process emissions and ~40% thermal
emissions) from cement production can be
attributed to clinker while a report by
Sustainalytics indicate that clinker only accounts
60-70% of the emissions (Sustainalytics, 2020).
While the proportion of clinker can differ
between studies, it is not in doubt that clinker isthe biggest contributor to CO2 emissions. For
this same reason, excluding the other stages
such as quarrying and transport is compatible
with the approach on focusing on emissions.
The downstream process of manufacturingconcrete involves mixing water, gravel andclinker (Draft Background Paper). The process islargely physical, not chemical. Consequently, it
does not have a significant carbon footprint andshould be excluded from the scope.
4

We cannot formally comment on the criteria
until we have a Cement working group launched
and the group has made decisions on these
specific issues. However, to support theprocess, we hope to share our informal opinion
on this and the following questions.
Capturing the emissions from quarrying toblending may be appropriate given the use caseof CBI’s cement criteria. However, including
quarrying in the system boundary is a departurefrom other initiatives such as PACTA, ACT, andTPI, who exclude quarrying in the systemboundary, and SBTi who considers including
quarrying only in their near-term targets.

5

Yes, with the exception of production of fly ash
and blast furnace slag - not clear why these areexcluded when e.g. silica fume, which is also a
byproduct of another industrial process, isincluded.

No change needed.
Quarrying and transportation comprise roughly 1%of cement production emissions. The TWG
determined they would not make a material
difference to whether a plant or company would
meet the relevant pathway. As such, they are notwithin the scope of emissions to be counted by theissuer. However, many cement companies doreport these emissions and therefore futureversions of criteria may aim to consider them inscope if necessary.

Note as above that fly ash and slag are not excluded
from the Criteria. Rather, companies cannot include
increased use of such materials in transition plans
for meeting future decarbonisation pathways.
Equally, the production (as separate from theprocurement) of such materials is outside of scope.
This has been clarified in the Criteria.

6

In the section 2 of criteria document, section
2.1 list out eligible projects. Here, there is one
category which should be included in increaseof Alternative Fuel Rate (AFR). Also, the onsite
renewable energy projects should beconsidered in this list.

Also, this standard should consider theboundary extension to include Concrete.
Concrete is the end product and not cement.

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

If onsite renewable energy or AFR are part of acement production process that meets theoverarching pathway, then they are eligible Use-ofProceeds. However, renewable energy assets in andof themselves must meet the relevant Climate
Bonds sector criteria (e.g., wind, solar, etc.). AFR
such as biomass must meet additional criteria
adopted from the Climate Bonds Bioenergy Criteria.
Waste-derived fuels must also meet the Waste
Management Criteria. In short, they are indeed
potentially within the scope of criteria.

4Concrete was not included because it is impossible
for the cement producer to know what concrete
will be made with their cement. This aligns withother initiatives such as SBTi and TPI. It is hoped in
the near future that Climate Bonds can address
concrete production as well as embodied carbon inconstruction. Criteria for concrete will be welcomedin the market, but this will require much moredevelopment due to the large range of possible
outputs from concrete mixing.
7

The assets in scope section only considers
cement. The sector key output is concrete andcement is just an intermediary. So the teamshould look at developing the standard at
concrete level.

See comment 6. Concrete was not included
because it is impossible for the cement producer toknow what concrete will be made with theircement. This aligns with other initiatives such as
SBTi and TPI. It is hoped in future that Climate
Bonds can address concrete production as well as
embodied carbon in construction.
Note: this will also allow a wider range ofcompanies to be certified, as many cement
producers also produce concrete.

8

Scope of
Emissions

Yes, but you’ve not included fuel switching and
CCS in the Assets in Scope in section 2.1, eventhough they are.

Fuel switching and CCS are within scope, subject tomeeting additional, cross-cutting criteria. The
documents should now reflect this.

I would also include switching of cement
production chemistry to be moresustainable,for example adding the equipment
necessary for LC3 cement production.

The TWG was unable to determine specifictechnology or equipment unique to SCMs such as
calcined clay or LC3. Nonetheless, light-touch
criteria are added under the conditionally eligible
assets where it can be demonstrated that theequipment is dedicated to calcined clay use in
cement. It is assumed eligible plants can also use
lower carbon chemistries to be certified, but theyshould still meet the overarching pathway.

9

The focus is scope 1 emissions (directemissions) including clinker transfers (part ofscope 3), this is acceptable.

The Criteria now require emissions from Alternative
Fuels and Raw Materials (AFR) to be included inemissions accounting (gross emissions), along withadditional criteria alongside the various types offuels (i.e., Bioenergy and Waste-derived fuels). Fullrationale is in Section 4.7.3 of the Background
Paper.

10

The draft in Section 3.3.1 is reasonable andappropriate as it reflects our business activities
in Japan.

The Criteria now require emissions from Alternative
Fuels and Raw Materials (AFR) to be included inemissions accounting (gross emissions), along withadditional criteria alongside the various types offuels (i.e., Bioenergy and Waste-derived fuels). Fullrationale is in Section 4.7.3 of the Background
Paper.

11

We have no objection on this section.

The Criteria now require emissions from Alternative
Fuels and Raw Materials (AFR) to be included inemissions accounting (gross emissions), along withadditional criteria alongside the various types offuels (i.e., Bioenergy and Waste-derived fuels). Fullrationale is in Section 4.7.3 of the Background
Paper.

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative5

12

We feel that the proposed scope is too narrow.
Rationale
The proposed scope states that Scope 1
emissions such as the direct emissions from
cement production should be considered andwe agree with this.
However, we do not agree that emissions fromon-site power generation, alternative fuels andraw materials should be excluded from thescope of emissions.

Onsite power generation emissions must now be
accounted for.
The Criteria now require emissions from Alternative
Fuels and Raw Materials (AFR) to be included inemissions accounting (gross emissions), along withadditional criteria alongside the various types offuels (i.e., Bioenergy and Waste-derived fuels). Fullrationale is in Section 4.7.3 of the Background
Paper.

40% of the CO2 emissions are thermal
emissions (IFC, 2021). Thermal emissions arelargely determined by the choice of kiln
(traditional or electrified), choice of fuel(biomass/biofuels or fossil fuel) and power
generation. As the proposed scope alreadyincludes burning fossil fuels to heat kilns, it isintuitive that on-site power generation andemissions from alternative fuels be included forcompleteness. While looking at whether toinclude into the scope of emissions, one factor
we consider is the level of control the company
has. In this case, the choice of power generation
and alternative fuels falls under the company’s
circle of control and should be integrated as it
has the potential to be a significant
decarbonisation lever.
We also agree that a clinker production facility
must incorporate downstream Scope 3
emissions from grinding and the addition of
SCMs to account for the downstream emissions
associated with transporting or using thecement product. A grinding or blending
operation must incorporate upstream scope
emissions from clinker production.
13

Addressing gross emissions and including Scope
2 emissions would be appropriate. Addressing
only net, Scope 1 emissions can be a departurefrom related initiatives and approaches in thisand other sectors such as PACTA, SBTi, ACT, andClimate-Aligned Finance methodologies.
Additionally, more clarification on what isincluded in alternative fuels and raw materials,
and what is the rationale behind excluding themfrom emissions would be very helpful.

Quarrying and transportation comprise roughly 1%of cement production emissions. The TWG
determined they were not material and would not
make a huge difference to whether a plant orcompany would meet the relevant pathway. As
such, they are not within the scope of emissions to
be counted by the issuer. However, they aretechnically scope 1 & 2 emissions in many cases
and many cement companies do report theseemissions and therefore future versions of criteria
may wish to consider them in scope if necessary.
The Criteria now require emissions from Alternative
Fuels and Raw Materials (AFR) to be included inemissions accounting (gross emissions), along withadditional criteria alongside the various types offuels (i.e., Bioenergy and Waste-derived fuels). Fullrationale is in Section 4.7.3 of the Background
Paper.

Scope 1 emissions should be in “gross” terms
rather than “net” i.e. including emissions fromcombustion of waste-derived fuels.
Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

Climate Bonds and the TWG agreed with this which
is now reflected in the Criteria.

6Scope 2 emissions should also be included asthese are reported on by cement companies so
do not create an additional reporting burden.
14

This is acceptable.

The Criteria now require emissions from Alternative
Fuels and Raw Materials (AFR) to be included inemissions accounting (gross emissions), along withadditional criteria alongside the various types offuels (i.e., Bioenergy and Waste-derived fuels). Fullrationale is in Section 4.7.3 of the Background
Paper.

15

Net zero is not 0.15 tonnes of CO2 per tonne of
cementitious product. Net zero is net zero.

The emissions pathway for companies is based on
the SBTi 1.5-degree pathway for cement. It indeed
does not end at 0g CO2eq / t cement, but it does
end close to this. This is because it assumes
recarbonation in cement will be responsible for theremaining emissions reductions, but this takes
place in the use and recycling of concrete rather
than at the cement production stage. If
recarbonation were included, the end value would
be below zero. Moreover, the Criteria now requireemissions from Alternative Fuels and Raw Materials(AFR) to be included in emissions accounting (grossemissions), along with additional criteria alongside
the various types of fuels (i.e., Bioenergy andWaste-derived fuels). This means the pathways
should reflect carbon budgets that also include
these emissions. Full rationale is in Section 4.7.3 ofthe Background Paper.

It all depends on what is being included in thecalculations. Provided that CO2 reuptake is not,I might be able to get behind this as a target.
It seems that the biogenic fraction of fuel IS
being counted as climate neutral – so I would
expect more ambition.
It is entirely possible to go to net negative withcement by 2050 if CCS is included.

Climate Bonds will review the criteria in light oftechnological developments. If CCS continues toaccelerate as a key decarbonisation technology, theTWG will suitably review thresholds.
The emissions pathway for plants now ends at 0g
CO2eq / t cement in 2050. This is because the TWG
considered that a certified plant should represent
the best available technology for the time. It is
expected that, in 2050, zero emissions cement
production could be feasible. However, this will be
continuously reviewed in light of technologicaldevelopment. I.e., if by 2040, CCS is extremely
feasible for retrofitting a majority of cement plants,
the year for reaching zero emissions cement plants
may even be brought forward. Or vice versa.
16

The current draft criteria (Section 3.3.1. “Thescope of emissions used in meeting thepathway”) includes CO2 emissions from burning
fossil fuels to heat kilns, but excludes CO2
emissions from alternative fuels and raw
materials. This provision has been presumably
extracted from the Methodology proposed by
the Transition Pathway Initiative (PTI)2 with themethodology accessible,3 which states that:

Climate Bonds and the TWG fully agree thatemissions from burning AFR, particularly wastederived fuels, should be accounted for. As such the
Cement Criteria now require emissions from
Alternative Fuels and Raw Materials (AFR) to be
included in emissions accounting (gross emissions),
along with additional criteria alongside the various
types of fuels (i.e., Bioenergy and Waste-derived
fuels).

“The argument for excluding alternative fuels
and raw materials is that their use leads toequivalent emissions reductions in the waste

Moreover, CBI acknowledges that more suitable
fuel alternatives will be needed in the long-term,
yet no other alternatives to fossil fuels exist today.

2 https://www.no-burn.org/wp-content/uploads/2021/11/Plastic-is-Carbon-Oct2021.pdf
3 https://www.transitionpathwayinitiative.org/publications/76.pdf?type=Publication

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative7

management industry.” (Page 7 of PTI
Methodology).
This assumption —the fact that burning waste
in cement kilns can be deemed carbon-neutral
because it is saving emissions in the waste
sector— is completely false. The real facts are:- What is referred to as the “non-organic
fraction of municipal waste streams” or “waste
streams stripped of the recyclable content” tobe used as alternative fuels (e.g. in the form ofRefuse-Derived Fuels) is normally anheterogeneous compilation of materials,
namely, plastic, recyclable materials (paper,
cardboard), textiles, industrial waste, evengarden or other types of biomass waste.
Normally, the main component of RDF is plastic
waste.
- The assumption that this waste would haveemitted emissions in the waste sector is false,
since these materials could have been either
recycled, reused, composted, transformed in ananaerobic digestion plant, or in the case ofplastic waste, it could have been addressed with
upstream policies which aim at the minimising
its generation. In this way, the waste that isbeing burnt in cement kilns has been taken
away from activities that offer a much bigger
climate mitigation potential.

As such, a cut-off date of 2035 is set after which
point Municipal Solid Waste (MSW) will no longer
be accepted as a fuel source. However, Climate
Bonds will continuously review this criterion in lightof available technology, bringing this cut-off dateforward or pushing it backward accordingly.
Lastly, all recyclable waste (including certain
plastics) must be removed prior to burning in linewith the waste hierarchy. Issuers must demonstratethat either:a)

The waste has come from an eligible
sorting facility that has removed recyclable
material prior, or:b) Recyclable waste has been removed
through pre-processing in line withadditional criteria
Full rationale is in Section 4.7.3 of the Background
Paper.

- Furthermore, the assumption that burning
waste is carbon neutral ignores the fact thatburning waste, in any facility, produces GHG
and toxic emissions. We cannot emphasisestrongly enough how this fact needs to be taken
into account in order to provide an accurate
account of GHG emissions involved in burning
waste in cement kilns.
- It is very important to note that RDF or waste
typically burnt in cement kilns contains a large
amount of fossil-plastic. In this sense, cementkilns replace coal with plastic — that is replacing
one form of fossil fuel with another. Using
plastic waste as fuel and making it look like a
climate friendly activity with a climate bondcredential becomes a greenwashing exercise to
an increased source of GHG and toxic emissions.
- When a fossil-based alternative fuel such as
plastics sourced from municipal solid waste isused, this practice will perpetuate greenhousegas emissions associated with plastics life-cycle.
Plastic begins as a fossil fuel, and greenhousegases are emitted at every stage of its lifecycle:
oil and gas extraction and transport, plastic
production and manufacture, plastic waste
management or incineration, and plastics
pollution in our environment.
- Indeed, “plastic refining is among the mostgreenhouse-gas-intensive industries in the
manufacturing sector—and the fastest growing.
The manufacture of plastic is both energySummary of Cement Criteria Public Consultation - Climate Bonds Initiative8

intense and emissions-intensive in its own right,
producing significant emissions through thecracking of alkanes into olefins, thepolymerization and plasticization of olefins into
plastic resins, and other chemical refining
processes. Emissions from plastic production
are rising rapidly: a new Shell ethane cracker
being constructed in Pennsylvania could emit up
to 2.25 million tons of CO2e each year; a new
ethylene plant at ExxonMobil’s Baytown, Texas,
refinery could release up to 1.4 million tons.
Annual emissions from just these two new
facilities would be equal to adding almost
800,000 new cars to the road. Yet they are only
two among more than 300 new and expanded
petrochemical projects being built in the US
alone—primarily for the production of plastic
and plastic feedstocks (CIEL, 2021). In thiscontext, the CBI’s inclusion of plastic wasteburning in cement kilns will effectively provide afinancial incentive to maintain the expansion ofplastic production and disposal.
- Turning cement kilns into plastic waste
incinerators in disguise —which is what the
CBI’s criteria on cement will do if notaddressed— will increase the already staggering
projection of GHG emissions related to
producing and burning plastic waste inconventional incinerators. Production andincineration of plastics are on track to emit 2.8
gigatons of CO2e per year by 2050 —as much as
615 coal plants— and burn through up to 13%of the ever-shrinking global 1.5C carbon
budget.4 Burning plastics —in whatever
facility— will emit 2.9 kg of CO2e for every kg ofplastic burned.5 Ultimately, using plastic waste
as an energy source is no better for the climate
than using other fossil fuels. Additionally, thescope of emissions should also include all GHG
emissions and not only CO2 emissions. Whenthe full-life cycle of plastic is addressed,
methane emissions can be observed from theextraction of fracked gas and various extractionproduction stages of plastics.
(https://disc.gsfc.nasa.gov/datasets/GFEI_CH4_
1/summary)As portrayed in Section 3.2.3. “mitigation
criteria for cement production facilities” of thedraft criteria document, carbon intensity targets
are the only instrument used in determining
whether an investment is eligible or not. Whenburnt, plastics as alternative fuels will increase
the carbon intensity of cement. When emissions
from alternative fuels are not calculated, theresulting carbon intensity (expressed in t CO2/t
cementitious product) might beunderestimated.

4 https://www.ciel.org/project-update/plastic-climate-the-hidden-costs-of-a-plastic-planet/
5 https://www.no-burn.org/wp-content/uploads/2021/11/Plastic-is-Carbon-Oct2021.pdf

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative9

In conclusion, the section presents a failure toacknowledge the importance of including all
GHG emissions from alternative fuels and raw
materials that are derived from fossil fuels (suchas plastics).
Moreover, we urge you to review and rectify as
a matter of utmost importance the CBI’s
statement from the background paper, Section
4.4.6. “Alternative fuels” as these are false
claims, as argued above. Specifically, the wrong
assumptions are:
1. (the usage of waste-derived fuels) displaces
the consumption of fossil fuels with little to nodownside; and2. reduction in emissions can be achieved by
improving plant burners which allows for awider range of fuels to be used, notablymunicipal waste.
Is the TPI
Pathway thebest to havechosen? Whatelse should beconsidered?

17

We agree using the Transition Pathway Initiative
pathway but the updated version including theadjustments necessary to make the total
cement output and total Scope 1 emissions datafrom the IEA model comparable to theemissions intensity as defined by the GCCA. Also
recarbonation should be included here.

104.pdf (transitionpathwayinitiative.org)

Because the TPI Pathway was originally based on a
1.75-degree pathway (B2DS) rather than 1.5degrees, this has now been updated. The emissions
pathway for companies is based on the SBTi 1.5degree pathway for cement. This was developed
through a robust process of stakeholder
engagement and modelling. The emissions pathway
for plants is based on a starting point of the EU
Taxonomy on Sustainable Finance, and an endpointin 2050 of zero emissions. The pathway follows thesame trajectory as the SBTi sectoral pathway. See
sections 4.3.1 and 4.3.2 of the Background Paper.
Recarbonation is not included because it is typicallysmall during the lifetime of structures (2-5%) andcan be large only if the concrete is crushed at theend of life. Neither the real-life expectancy ofbuildings nor the End-of-Life is guaranteed, andtherefore, we chose to exclude carbonation.

18

For the emissions intensity the pathway starts
with 0,455 tons CO2/ton cementitious which is
below any other pathway and even below thethreshold of the EU taxonomy (0,469-ton
CO2/ton cement). This makes the proposed
approach really challenging and unpractical.

This starting point for 2020 was increased in linewith the pathway updates. Because the TPI
Pathway was originally based on a 1.75-degree
pathway (B2DS) rather than 1.5-degrees, this has
now been updated. The emissions pathway forcompanies is based on the SBTi 1.5-degree pathway
for cement. This was developed through a robust
process of stakeholder engagement and modelling.
The emissions pathway for plants is based on astarting point of the EU Taxonomy on Sustainable
Finance, and an endpoint in 2050 of zero emissions.
The pathway follows the same trajectory as the
SBTi sectoral pathway. The EU Taxonomy is basedon real data from high performing cement plants in
the region, demonstrating that these emissions aretechnically feasible. See sections 4.3.1 and 4.3.2 of
the Background Paper.
It is acknowledged the thresholds for cement
production facilities is ambitious. However, there is
far more leeway for companies to become certified
through the criteria for companies, as distinct from

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative10

facilities. See section 1.3 in the Criteria document
for illustration of the differing criteria.
19

Criteria document:
It is NOT definitely considered that TPI is anapplicable reference for Criteria document due
to the following reasons.
1.

The global thresholds shown in Figures 1
and Table 3 in Section 3.2.3 are indicatedbased on the 2 ° C scenario of TPI.
However, even referring to several
scenarios of the latest IEA reports, thecalculation process is vague and the validityof values is unclear.

2.

The forecast of cement demand and CO2
emissions from cement production are
discussed in all IEA reports. However, TPI
uses values on cementitious production
somehow converting from cement
production based on IEA data.
Unfortunately, the definition of“Cementitious” is not described in the
document what kinds of material are
included and furthermore there is noforecast data on the materials.

3.

TPI has analyzed for transition scenarios
based on limited information excluding
update on the cement industry in Japan.
For instance, Taiheiyo cement participatedin TCFD published their reduction
scenarios. (View at https://www.taiheiyocement.co.jp/csr/pdf/2020/m_64_65.pdf)

Because the TPI Pathway was originally based on a
1.75-degree pathway (B2DS) rather than 1.5degrees, this has now been updated. The emissions
pathway for companies is based on the SBTi 1.5degree pathway for cement. This was developed
through a robust process of stakeholder
engagement and modelling. The emissions pathway
for plants is based on a starting point of the EU
Taxonomy on Sustainable Finance, and an endpointin 2050 of zero emissions. The pathway follows thesame trajectory as the SBTi sectoral pathway. See
sections 4.3.1 and 4.3.2 of the Background Paper.

While true that cement production is highly subject
to regional contexts, reliance on regional pathways
is problematic. Firstly, it does not guarantee thatthey meet the necessary ambition needed to meet
1.5oC in the sector. Secondly, some regions do nothave their own pathways which makes a global
pathway a necessity. Ultimately, the entity level
criteria in the Cement Criteria reflect regional
contexts to an extent: companies that are not yeton the pathway can meet Tier 2 requirements
through meeting the pathway by 2030 and having atransition plan that demonstrates how they will getthere. This would give ample time to overcome
various regional barriers currently faced.

And Sumitomo Osaka Cement also set a
reduction target. (View athttps://www.soc.co.jp/csr/carbon_newtral_bision/)

Therefore, it is strongly recommended to adopt
existing transition scenarios of migration
developed in each country/region instead of TPI
shown in Figure 1 and Table 3 of Section 3.2.3.
Since the Government of Japan is currently
developing a transition roadmap by 2050 incollaboration with each industry sector, thethreshold should be set using such reduction
scenario in each region/country at the highest
priority. (View athttps://www.meti.go.jp/english/press/2022/032
4_003.html)
If there is no "national/reginal transition
roadmap" yet, it can be acceptable that the 2 °C scenario value of TPI is applied as a provisional
default while improving the accuracy in the
future.

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative11

Background document:“Be globally applicable, not based on regional
data or standards” of Section 4.3.1 on page 19
should be amended to follow;• Be globally applicable, consistent withnational roadmap based on regional data or
standards
Reason is that the transition pathway to net
zero emissions depends on each regional
circumstance since raw material procurement
and market conditions differ from those on theregion/country.
20

It is internationally well known that the mostacceptable climate rule is to publish the
reduction target and manage responsibly the
reduction progress by each country like NDC
implemented in the Paris Agreement.
Therefore, in order to disseminate the initiative
globally as well, it is necessary to incorporatehigh quality published national/reginal data
instead of TPI. For instance, since there is a"transition roadmap to net zero CO2 emissions"
incorporating all reduction measures including
energy conservation in the cement industry
developed by the public and private partnershipin Japan, the following roadmap should beincorporated into the Criteria document as an
assessment tool.

Because the TPI Pathway was originally based on a
1.75-degree pathway (B2DS) rather than 1.5degrees, this has now been updated. The emissions
pathway for companies is based on the SBTi 1.5degree pathway for cement. This was developed
through a robust process of stakeholder
engagement and modelling. The emissions pathway
for plants is based on a starting point of the EU
Taxonomy on Sustainable Finance, and an endpointin 2050 of zero emissions. The pathway follows thesame trajectory as the SBTi sectoral pathway. See
sections 4.3.1 and 4.3.2 of the Background Paper.

While true that cement production is highly subject
to regional contexts, reliance on regional pathways
is problematic. Firstly, it does not guarantee thatthey meet the necessary ambition needed to meet
1.5oC in the sector. Secondly, some regions do nothave their own pathways which makes a global
pathway a necessity. Ultimately, the entity level
criteria in the Cement Criteria reflect regional
contexts to an extent: companies that are not yeton the pathway can meet Tier 2 requirements
through meeting the pathway by 2030 and having atransition plan that demonstrates how they will getthere. This would give ample time to overcome
various regional barriers currently faced.

https://www.meti.go.jp/policy/energy_environment/global_
warming/transition/transition_finance_technology_roadma
p_cement_eng.pdf

21

Transition Pathway Initiative Pathway should be
one of the refereed source.
We cannot know the calculation method, so wecannot judge the TPI’s pathway is appropriate
or not 100% basis.
In addition, the pathway seems to be quite hightarget for the Japanese cement sector
considering their current emission level.
The way to reduce carbon varies by country,
and by company.

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

Because the TPI Pathway was originally based on a
1.75-degree pathway (B2DS) rather than 1.5degrees, this has now been updated. The emissions
pathway for companies is based on the SBTi 1.5degree pathway for cement. This was developed
through a robust process of stakeholder
engagement and modelling. The emissions pathway
for plants is based on a starting point of the EU
Taxonomy on Sustainable Finance, and an endpointin 2050 of zero emissions. The pathway follows thesame trajectory as the SBTi sectoral pathway. See
sections 4.3.1 and 4.3.2 of the Background Paper.
12

We need to consider the cement company’s
location, nationality, natural disaster risks andenergy source limitation, which are different by
country.

For example, in Japan, it is difficult to switch its
energy source from coal/oil to LNG, as most of
the cement factories locates in mountain side.
Japan is an island and LNG pipelines do notreach to the mountain side. In addition, Japan
has to import LNG from middle east, the U.S. or
Russia mainly. Japan is far from those site,which means it is necessary to consider the CO2
emission during the maritime shipping as well as
land transport from the port to the factories. In
addition, there is an political and geographicalrisks to largely depends on LNG only. As amatter of fact, switching coal energy plant tobiomass and in the future to ammonia.

While true that cement production is highly subject
to regional contexts, reliance on regional pathways
is problematic. Firstly, it does not guarantee thatthey meet the necessary ambition needed to meet
1.5oC in the sector. Secondly, some regions do nothave their own pathways which makes a global
pathway a necessity. Ultimately, the entity level
criteria in the Cement Criteria reflect regional
contexts to an extent: companies that are not yeton the pathway can meet Tier 2 requirements
through meeting the pathway by 2030 and having atransition plan that demonstrates how they will getthere. This would give ample time to overcome
various regional barriers currently faced.
It is also important to note that the criteria set anemissions pathway rather than prescribing specificmilestones such as lower clinker factor or fuelsubstitution. This allows producers to reach thenecessary emissions levels that best suits theircontext.

This is Japanese risks and limitations in terms ofenergy transition.

Secondly, Japan has frequent serious
earthquake, which means it is difficult to reduceclinker ratio easily.

As such, there are unique risks and limitations
to reduce carbon emission. If you try to coverglobal companies, we sincerely request you to
consider each national limitations and risks.
If you do consider such national differences, We
recommend you to refer each nationaltransition roadmap like Japan’s METI setting, ifany, in addition to the global pathway.
We need to consider plural options to refer thetransition pathway. It is not the only one option
we need to refer, don’t you think?
22

The Transition Pathway Initiative (TPI) is a goodstarting point and feel that it is a favourable
approach. TPI is based on the Sectoral
Decarbonisation Approach (SDA) which has
been effective at translating internationalemissions targets to sector specific benchmarks.
This approach has been key to avoiding
unrealistic and costly solutions in reducing
emissions across sectors, making it preferable toother pathways.
The TPI has a further advantage of providing
year by year thresholds to form a pathway to
net zero by 2050, specific to the cement sector.
This makes it very easy to understand.

Because the TPI Pathway was originally based on a
1.75-degree pathway (B2DS) rather than 1.5degrees, this has now been updated. The emissions
pathway for companies is based on the SBTi 1.5degree pathway for cement. This was developed
through a robust process of stakeholder
engagement and modelling. The emissions pathway
for plants is based on a starting point of the EU
Taxonomy on Sustainable Finance, and an endpointin 2050 of zero emissions. The pathway follows thesame trajectory as the SBTi sectoral pathway. See
sections 4.3.1 and 4.3.2 of the Background Paper.

Reliability is also not in question as it has beendeveloped through a high degree of scrutiny
from academia and industry experts.
Elements of the SBTi
Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

13

Notwithstanding the benefits of the TPI, weshould also consider incorporating elements ofother approaches. An alternative that wasalluded to in the paper and which MUFG has
been advising our clients to use is the Science
Based Targets Initiative (SBTi), which is also
generated via a similar methodology.
There are two aspects;- First, the SBTi is aligned with a 1.5°C reduction
which has a broader recognition with otherstakeholders includes Second Party Opinion
providers and regulatory bodies. In addition,alignment to the 1.5°C reduction is consistent
with the starting point in the white paper andthe position that CBI took in transition finance(CBI, 2020).
Anecdotally - Holcim, the largest cement
producer in the world, has announced theiralignment in October 2021 with the SBTipathway in their 2050 net zero targets andexpressly indicated the 1.5°C reduction (Holcim,2021). The industry (and our clients) took
Holcim’s lead and it would certainly be amiss todisregard it.
- Second, while SBTi does not have a cement
specific pathway for now, they are developing
one (SBTi, 2022). This will also be consistent
with the SDA and should be incorporated once
it has been released in June 2022.
23

The selection of a 1.5-aligned pathway would be
the most appropriate approach; and IEA Net
Zero Report as the source of 1.5ºC pathway for
cement sector would be appropriate.

Emissions should be in “gross” terms, i.e.
including emissions from combustion of waste
derived fuels. Cement industry definition of “netemissions” gives credit for avoided emissions,which is not compatible with meeting a carbon
budget.

24

Because the TPI Pathway was originally based on a
1.75-degree pathway (B2DS) rather than 1.5degrees, this has now been updated. The emissions
pathway for companies is based on the SBTi 1.5degree pathway for cement. This was developed
through a robust process of stakeholder
engagement and modelling. The emissions pathway
for plants is based on a starting point of the EU
Taxonomy on Sustainable Finance, and an endpointin 2050 of zero emissions. The pathway follows thesame trajectory as the SBTi sectoral pathway. See
sections 4.3.1 and 4.3.2 of the Background Paper.

Instead, reference could be made to SBTipathways which exist for cement (on a grossbasis): here for well-below 2ºC and here for
1..5ºC (in draft form until finalization in June
2022 but unlikely to change)

Note, TPI does now have a 1.5-degree pathway
which warrants consideration and is highly valuablefor the market. It is also partially aligned with the
SBTi methodology.

There has been sector pathway developed by
GCCA. The standard should refer to the GCCA
roadmap.

Because the TPI Pathway was originally based on a
1.75-degree pathway (B2DS) rather than 1.5degrees, this has now been updated. The emissions
pathway for companies is based on the SBTi 1.5degree pathway for cement. This was developed
through a robust process of stakeholder
engagement and modelling. The emissions pathway
for plants is based on a starting point of the EU
Taxonomy on Sustainable Finance, and an endpointin 2050 of zero emissions. The pathway follows thesame trajectory as the SBTi sectoral pathway. See

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

14

sections 4.3.1 and 4.3.2 of the Background Paper.
The GCCA roadmap is a laudable initiative by theindustry to drive emissions reductions across thesector. However, because it sets a pathway inabsolute emissions (i.e., not emissions intensity of
production) and is for the whole cement andconcrete sector, it is unsuitable for use in these
Criteria.
25

The starting carbon intensity value of 2020
considered is too ambitious. These are almost
the range of values prescribed by SBTi for 2030.

Also, the intensity values should consider thedevelopment stage of the geography. There
should be different range for developed andother geographies.

This starting point for 2020 was increased in linewith the pathway updates. Because the TPI
Pathway was originally based on a 1.75-degree
pathway (B2DS) rather than 1.5-degrees, this has
now been updated. The emissions pathway forcompanies is based on the SBTi 1.5-degree pathway
for cement. This was developed through a robust
process of stakeholder engagement and modelling.
The emissions pathway for plants is based on astarting point of the EU Taxonomy on Sustainable
Finance, and an endpoint in 2050 of zero emissions.
The pathway follows the same trajectory as the
SBTi sectoral pathway. The EU Taxonomy is basedon real data from high performing cement plants in
the region, demonstrating that these emissions aretechnically feasible. See sections 4.3.1 and 4.3.2 of
the Background Paper.
It is acknowledged the thresholds for cement
production facilities is ambitious. However, there is
far more leeway for companies to become certified
through the criteria for companies, as distinct fromfacilities.
While true that cement production is highly subject
to regional contexts, reliance on regional pathways
is problematic. Firstly, it does not guarantee thatthey meet the necessary ambition needed to meet
1.5oC in the sector. Secondly, some regions do nothave their own pathways which makes a global
pathway a necessity. Ultimately, the entity level
criteria in the Cement Criteria reflect regional
contexts to an extent: companies that are not yeton the pathway can meet Tier 2 requirements
through meeting the pathway by 2030 and having atransition plan that demonstrates how they will getthere. This would give ample time to overcome
various regional barriers currently faced.
It is also important to note that the criteria set anemissions pathway rather than prescribing specificmilestones such as lower clinker factor or fuelsubstitution. This allows producers to reach thenecessary emissions levels that best suits theircontext.

26

From the chart, no, it’s too weak.

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

Because the TPI Pathway was originally based on a
1.75-degree pathway (B2DS) rather than 1.5degrees, this has now been updated. The emissions
pathway for companies is based on the SBTi 1.5degree pathway for cement. This was developed
through a robust process of stakeholder
engagement and modelling. The emissions pathway
for plants is based on a starting point of the EU
15

Taxonomy on Sustainable Finance, and an endpointin 2050 of zero emissions. The pathway follows thesame trajectory as the SBTi sectoral pathway. See
sections 4.3.1 and 4.3.2 of the Background Paper.
27

The Transition Pathway Initiative pathway
methodology excludes emissions from burning
alternative fuel (e.g. municipal solid waste, RDF,etc) in cement kilns on the assumption that theemissions produced by the combustion of waste
are equivalent to emissions that would be
produced in the waste management sector. As
explained in question 2, this assumption is false.
Therefore, the PTI is not the best reference for
the CBI criteria on cement.
A more scientifically robust and internationallyrecognised reference is the latest IPCC Reporton Mitigation, released on April 4th 2022.
Chapter 11 presents an overview of options to
mitigate the Industrial sector, including thecement sector there (Ref) .
Key recommendations from the IPCC report forthe cement sector are:
1. Reduce the amount of clinker in cement
production.
“ The IPCC April 2022 report indicates that amuch more aggressive pathway of reductions in
the industrial sector is needed. In regards to thecement sector, the IPCC does not recommend
fuel substitution with waste. The IPCC states
that, “Because so much of the emissions fromconcrete come from the limestone calcination
to make clinker, anything that reduces use ofclinker for a given amount of concrete reduces
its GHG intensity. While 95% Portland cement iscommon in some markets, it is typically notnecessary for all end-use applications, and manymarkets will add blast furnace slag, coal fly ash,or natural pozzolanic materials to replace
cement as supplementary cementious
materials; 71% was the global average clinker
content of cement in 2019 (IEA 2020a). All thesematerials are limited in volume, but a
combination of roughly 2–3 parts groundlimestone and one part specially selected,
calcined clays can also be used to replace
clinker.” Improve the composition of cement

The Cement Criteria now have updated pathways
that are both 1.5-degree aligned and include
emissions from the burning of AFR. The Cement
Criteria also seek to encourage reduction of clinker
in cement production through the correction
factors which encourage this practice. On limiting
the amount of cement and concrete used inconstruction, these activities are outside of thescope of criteria.
Climate Bonds and the TWG fully agree thatemissions from burning AFR, particularly wastederived fuels, should be accounted for. As such the
Cement Criteria now require emissions from
Alternative Fuels and Raw Materials (AFR) to be
included in emissions accounting (gross emissions),
along with additional criteria alongside the various
types of fuels (i.e., Bioenergy and Waste-derived
fuels).
Moreover, CBI acknowledges that more suitable
fuel alternatives will be needed in the long-term,
yet no other alternatives to fossil fuels exist today.
As such, a cut-off date of 2035 is set after which
point Municipal Solid Waste (MSW) will no longer
be accepted as a fuel source. However, Climate
Bonds will continuously review this criterion in lightof available technology, bringing this cut-off dateforward or pushing it backward accordingly.
Lastly, all recyclable waste (including certain
plastics) must be removed prior to burning in linewith the waste hierarchy. Issuers must demonstratethat either:a)

The waste has come from an eligible
sorting facility that has removed recyclable
material prior, or:b) Recyclable waste has been removed
through pre-processing in line withadditional criteria
Full rationale is in Section 4.7.3 of the Background
Paper.

“One of the simplest and most effective ways toreduce cement and concrete emissions is tomake stronger concrete through better mixing
and aggregate sizing and dispersal; poorly andwell-made concrete can vary in strength by afactor of 4 for a given volume (Fechner and Kray
2012; Habert et al. 23 2020).” This argues for a
refocus of the market away from “one size fitsall”, often bagged, cements to professionally
mixed clinker, cementious material and filler
mixtures appropriate to the needs of the end
use. (IPCC AR6, chapter 11, page 46)
Summary of Cement Criteria Public Consultation - Climate Bonds Initiative16

2. Limit and reduce the amount of cement usedin construction“Architects, engineers and contractors also tend
to overbuild with cement because it is cheap aswell as corrosion and water resistant. Buildings
and infrastructure can be purposefully designed
to minimize cement use to its essential uses
(e.g. compression strength and corrosion
resistance), and replace its use with othermaterials (e.g. wood, stone, other fibres) for
non-essential uses. This could reduce cement
use by 20–30% (D’Alessandro et al. 2016;
Imbabi et al. 2012; Brinkerhoff and GLDNV
2015; Lehne 31 and Preston 2018; Shanks et al.
2019; IEA 2019b; Habert et al. 2020). “(IPCC
AR6, Chapter 11, page 46)
Verifying an
issuer’s
compliancewith apathway:28

Our view is that one should simply refer toalignment with the pathway.

This is now the underlying requirement of the
Cement Criteria for this particular aspect.

29

Criteria document

The table has been removed as it creates more
confusion than clarity.

Regarding Section 3.2.3., SCMs such as Slag and
Fly ash are currently considered to be very
effective to reduce CO2 emissions from cement
production since there is no alternative
reduction measure.

Mid-pointthreshold of
the bond vs.
demonstrationof continued
compliancewith thepathway every
three years.

Therefore, it should be recommended to allow
the use of Slag and Fly ash as a tentative
reduction measure for a limited period of 10 or
20 years while those are available.
If possible, please replace the ▲ with ■ in row
of “Production of Fly Ash and Blast Furnace
Slag” and both columns of “Mitigation” and“Adaptation and Resilience” in Table 1.

Cement producers using fly ash and slag to reduce
their cement emissions are not outside of scope.
Rather, for the avoidance of doubt, ‘production of’these SCMs (i.e., coal energy and steel production)cannot be part of bond proceeds. Climate Bonds
does not see a need for a cut-off date, although it iswell noted that beyond 10-20 years we expect suchmaterials to be lower in availability. Rather, theCement Criteria are regularly reviewed every 3
years. As part of these reviews, the availability ofmore suitable SCMs and fly ash and slag will beconsidered and thus whether preference should begiven to other SCMs.

On the other hand, the cement company should
indicate each available utilizing period for fly ash
and blast furnace slag in its project document.
30

I am not so sure whether the issuer could planthe detailed pathway threshold for 10 or 20
years. On the other hands, most of Japanesehigh efficient companies have mid-term
investment plan for decarbonization which isabout two to five year cycles. So, it is preferable
to take option b) with the condition that theissuer could review and revise its transition
pathway to comply with every three years as
well.

Climate Bonds and the TWG agree with thisviewpoint. Moreover, it is not clear whether anissuer could feasibly meet the pathway values in
the future. As such, these Criteria are set assuggested here with the view that regular review
will take place of the pathway in light oftechnological developments.

The reason why such review and revision isnecessary is that they are trying to realize thenext generation innovative technology to realize
carbon neutral by 2050. The success of these
innovation is very much uncertain at thismoment, so, it is better to revise its transition
pathway in two to three years at least.
31

Between the 2 options, we are more inclined
towards option b).

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

Climate Bonds and the TWG agree with thisviewpoint which will be implemented.
17

A continued compliance approach culminating
in a final target is more consistent with thestrategy of TPI (Question 3) of establishing year
by year thresholds that leads up to a net zerotarget in 2050. Having continued compliance
ensures that at the end of the facility, thecompany should be in adherence and closer to
its net zero target.
A side benefit of this approach is also providing
the issuer with multiple milestones to achieve
the certification.
32

Option (b) is preferable since the reporting andcompliance intervals are shorter and more
appropriate to track the issuers’ progress onemissions reductions. For example, PCAF’s New
Methods guidance on green bonds also
recommends issuers to publish an impact reportannually, which aligns with our approach on
annual reporting.

Climate Bonds and the TWG agree with thisviewpoint which will be implemented.

33

Option b seems preferable as it encourages
continuous monitoring and reporting

Climate Bonds and the TWG agree with thisviewpoint which will be implemented.

34

Option a could be considered.

Option b is being used due to the limitations
cement production experiences today of meetingthe future targets (as these represent futuretechnological and production capabilities).

35

Annual reporting. It’s too easy to ignore therequirement for 10 years, play along and thenrefinance with a different bond.

Climate Bonds and the TWG agree with thisviewpoint which will be implemented.

IF there’s penalty clauses to prevent this, thenmaybe mid point, but ten years is a long time.
Furthermore, the requirement to do annual
reporting will de-facto force companies tocarefully consider their emissions reporting –it’s a win-win.
36

Demonstrating continued compliance isimperative. Several factories within the cement
industry have a track record of violation of
Human Rights across the world. In this case, it’s
especially important to build a robust system fortransparency, accountability and verification of
their activities, particularly taking into accountthe direct testimony of local communities
nearby cement plants.

Climate Bonds and the TWG agree with thisviewpoint which will be implemented.

A comprehensive account of the reality of waste
incineration in cement kilns and how local
communities have been obliged to defend
themselves can be found here in this reference.
‘We have a right to breathe clean air’: theemerging environmental justice movement
against waste incineration in cement kilns in
Spain
Herrero, A. & Vilella, M. Sustainability Science(2017).
Summary of Cement Criteria Public Consultation - Climate Bonds Initiative18

https://doi.org/10.1007/s11625-017-0473-x
Access here:
https://link.springer.com/article/10.1007/s1162
5-017-0473-x
Cement grade
correction
factors37

Accounting for cement class as a proxy for
cement quality is not reasonable and will becounter net zero objective. The methodology
also presents a major flaw as the clinker factor
appears to be used twice.
For the cement classes below 42,5 a correction
downward of the threshold is applied, while forabove a correction upward is applied. (Meaningthat a cement in the 62,5 class will have 15%
higher threshold).
As most installations produce several cement
types and classes, this would be far too complex
but also allow higher emissions for higher
cement class.

See section 4.3.3 in the Background Paper for fullrationale for the correction factors by cement
grade.
The TWG strongly held the view that more reactive
cements are crucial for bringing emissions down. In
other words, more reactive cements have greater
scope for substitution with SCMs and thus lower
emissions. Cement strength grades are considered
the most suitable proxy for cement reactivity. As
such, an effective discount on carbon intensity ofhigher-grade cements is applied to reflect thisincreased opportunity for substitution. Because thecorrection factors are calculated based on dilution
with inert, unreactive filler, cements that aresubsequently diluted with reactive SCMs are thus
favoured.

Nonetheless, it is agreed there should be a
specification for plants producing a range of
products. As such, facilities and companies
producing several different types and classes cantake the mass-weighted average strength of
produced cement.

Furthermore, to avoid confusion, the 22.5 and 62.5
categories have been removed post-public
consultation. These are not commonly produced
and the TWG did not want to indicate that suchcement grades should be produced when they leadto other issues.
38

In Figure 1 and Table 3 of Section 3.2.3, it is notpossible to use a global threshold because theamount of SCM added in cement depends on
Regulation, Standard, and Building Code in eachcountry. Therefore, it should be clearly
indicated that "the threshold value described inthis section is one of example for the Europe
region". The reason is as follows;
1.

2.

6

52.5 class cement is mostly consumed inJapan. This is a reason why cement withless SCM is required in areas where many
earthquakes frequently occur.
As mentioned above, a transition roadmap
for each sector has been developed inJapan through public-private partnerships,
and the roadmap comprehensively
describes low carbon manufacturing
processes, low carbon raw materials, fuelshifting and CCUS to reach a net zero CO2emissions. If such roadmap is existed, theSee section 4.3.3 in the Background Paper for fullrationale for the correction factors by cement
grade.
The Criteria (in Chapter 4 of the Criteria document)
are now as follows: ‘The company/facility shall test
their product following EN 197-16 or, if EN 197-1 is
not used, corresponding nominal strength
according to a locally used standard) and report thevalue’. This ensures that local standards can beused but ultimately corresponds to the compressive
strength of the cement produced.
The TWG strongly held the view that more reactive
cements are crucial for bringing emissions down. In
other words, more reactive cements have greater
scope for substitution with SCMs and thus lower
emissions. Cement strength grades are considered
the most suitable proxy for cement reactivity. As
such, an effective discount on carbon intensity ofhigher-grade cements is applied to reflect thisincreased opportunity for substitution. Because thehttps://datis-inc.com/blog/what-is-en-197-1-standard/

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative19

Criteria document should incorporate it bypriority.

An introduction of “collection factor” in Table 4
on page 17 of Section 3.2.3 may help to asses
several types of cement composition on thesame line, but the following issues remain.
1.

It is unclear how to determine collection
factors related to cement class in the draft.

Use of 42.5 as a global standard strength basedon EN 197-1 is just a European case, and it is notpossible to apply the correction factor of year
threshold to other regions and countries. As
shown above, since cement class 52.5 is abaseline in Japan, Table 4 should be indicated as
an example of European case.

correction factors are calculated based on dilution
with inert, unreactive filler, cements that aresubsequently diluted with reactive SCMs are thus
favoured.

Nonetheless, it is agreed there should be a
specification for plants producing a range of
products. As such, facilities and companies
producing several different types and classes cantake the mass-weighted average strength ofcement.

Background paper:
Section 4.3.2 on page 21 and 22 includes aslightly overestimated description that even ifpart of the clinker is simply replaced by SCM
such as calcined clay, limestone and silica fume,
it still meets the strength of 42.5 by EU
standards. However, in Japan, initial properties
including the workability of concrete areconcerned as well as its strength.

Also, comments on a validity of the correction
factor cannot be addressed because it is much
unclear how to deliver. Though the cement class42.5 is the baseline in this draft, most of thecement used for building construction is 52.5
class in countries where earthquakes frequently
occur.
39

We could not clearly understand thecalculations method from the current criteria
draft and the background paper.

Further explanation is now provided on calculationof the correction factors in section 4.3.3 of the
Background Paper.

We request you to disclose more precise
conditions and calculations formula.

On the carbon intensity thresholds, these are now
updated in line with the latest pathways and 1.5degree scenarios from SBTi. The starting point for2020 was increased in line with the pathway
updates. Because the TPI Pathway was originallybased on a 1.75-degree pathway (B2DS) rather than
1.5-degrees, this has now been updated. The
emissions pathway for companies is based on the
SBTi 1.5-degree pathway for cement. This wasdeveloped through a robust process of stakeholder
engagement and modelling. The emissions pathway
for plants is based on a starting point of the EU
Taxonomy on Sustainable Finance, and an endpointin 2050 of zero emissions. The pathway follows thesame trajectory as the SBTi sectoral pathway. The
EU Taxonomy is based on real data from highperforming cement plants in the region,
demonstrating that these emissions are technicallyfeasible. See sections 4.3.1 and 4.3.2 of the

Please disclose the definition of cementitious
product. IN addition, please explain why the
Table 3 carbon intensity starts from 0.455 in
2020. The current global emission intensity of
cement sector seems to be much higher.
We are afraid that you use the old version of
TPI, isn’t it revised now to 0.55?

Please clarify the calculation formula of thecorrection factor and cement class. What is EN
197-1? If this refers from EU Taxonomy, or any
EU regulations, it is not a global standard but
regional standard.
Summary of Cement Criteria Public Consultation - Climate Bonds Initiative20

Background Paper.
It is acknowledged the thresholds for cement
production facilities is ambitious. However, there is
far more leeway for companies to become certified
through the criteria for companies, as distinct fromfacilities.
40

There are two key elements with the proposed
methodology. Firstly, it differentiates cementclasses using the European Standard EN-197.
Secondly, it applies a correction factor on the
cement class, penalizing classes with a lower
clinker quality.
The methodology implicitly assumes that theEuropean Standard will be used consistently.
We need to recognize that different countries
have different local standards, for instanceSingapore uses the Singapore Standards
developed by SPRING Singapore (SSC, 2014) andother Asian countries use ASTM standards. We
suggest adapting to using the local equivalents if
EN-197 is not widely applied.
In our opinion, applying a discount on the
carbon intensity enhances the soundness of themethodology as it reflects the higher chemical
reactivity and higher potential for SCM addition.
In addition, we note that the mitigation
requirements are based on a strategy to be partof an economy that is net zero by 2050. It is not
currently possible to achieve zero carbon
cement due to the limitations of today’s
technologies.

41

These comments grasp the rationale of the TWG toinclude correction factors. As such, the group are of
the opinion they should continue to be used.
However, it is noted that, to avoid confusion, the22.5 and 62.5 categories have been removed postpublic consultation. These are not commonly
produced and the TWG did not want to indicatethat such cement grades should be produced when
they lead to other issues.

Given CBI’s use case, differentiation of cementclass could be appropriate, and rationale isreasonable. However, we are not best placed toprovide feedback on this topic at this time.

No response needed.

While the rationale (incentivising cementcompanies to encourage their customers to
optimize the use of cement in concrete) iscommendable, it is not clear it would have thedesired effect for a few reasons:

Clearer rationale is provided in section 4.3.3 of the
Background Paper for the correction factors, alongwith the methodology for their calculation.

●

●

7

Climate Bonds agrees that local standards shouldbe accepted where EN 197-1 is not used. As such,
the Criteria (in Chapter 4 of the Criteria document)
are now as follows: ‘The company/facility shall test
their product following EN 197-17 or, if EN 197-1 is
not used, corresponding nominal strength
according to a locally used standard) and report thevalue’. This ensures that local standards can beused but ultimately corresponds to the compressive
strength of the cement produced.

It seems to potentially create asituation that if all companies wereusing this method, there would be arisk that the emission budget would
not be met - what if all companies
declare higher than average strengthand thus have a more lenient CO2
requirement? (What is the basis of theassumption that 42.5 MPa is theaverage strength across the globe?)
Higher strength cement does notnecessarily mean less of this cement
will be used in concrete - this depends
on the concrete producer. So it is

The TWG strongly held the view that more reactive
cements are crucial for bringing emissions down. In
other words, more reactive cements have greater
scope for substitution with SCMs and thus lower
emissions. Cement strength grades are considered
the most suitable proxy for cement reactivity. As
such, an effective discount on carbon intensity ofhigher-grade cements is applied to reflect thisincreased opportunity for substitution. Because thecorrection factors are calculated based on dilution
with inert, unreactive filler, cements that aresubsequently diluted with reactive SCMs are thus
favoured.

https://datis-inc.com/blog/what-is-en-197-1-standard/

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative21

●

rewarding cement producers for an
outcome that may or may not happen.
By a similar logic, one could encourage
cement producers to produce cementwith a higher clinker factor, as thesecements could be used with a greater
share of cement substitutes in
concrete (at least according to thestandards in many markets) - but
incentivising higher clinker factors is
the opposite of what should be done
As the outcome is uncertain (i.e.
whether higher strength cement leads
to concrete with less cement), it is notclear that the carbon savings would
match those higher cement emissions
intensities allowed by the thresholdadjustment calculation

Furthermore, to avoid confusion, the 22.5 and 62.5
categories have been removed post-public
consultation. These are not commonly produced
and the TWG did not want to indicate that suchcement grades should be produced when they leadto other issues.

“Overstrength” (where concretes are produced
at higher strengths than required by the design,for many reasons including logistics or lack ofawareness) is already a barrier to carbon
efficiency in concrete production and thisapproach seems like it could add to this issue(see for example https://mdpires.com/d_attachment/civileng/civileng-0300004/article_deploy/civileng-03-00004.pdf)
43

We have not come across this type of
methodology where cement class impact
emissions. Also, various plants manufacture
different type of cements. The proposed
methodology/option will create several
complexities for the company.

So this should be relooked by the team.

See section 4.3.3 in the Background Paper for fullrationale for the correction factors by cement
grade.
The TWG strongly held the view that more reactive
cements are crucial for bringing emissions down. In
other words, more reactive cements have greater
scope for substitution with SCMs and thus lower
emissions. Cement strength grades are considered
the most suitable proxy for cement reactivity. As
such, an effective discount on carbon intensity ofhigher-grade cements is applied to reflect thisincreased opportunity for substitution. Because thecorrection factors are calculated based on dilution
with inert, unreactive filler, cements that aresubsequently diluted with reactive SCMs are thus
favoured.

Furthermore, to avoid confusion, the 22.5 and 62.5
categories have been removed post-public
consultation. These are not commonly produced
and the TWG did not want to indicate that suchcement grades should be produced when they leadto other issues.
44

I think it’s reasonable but I’m not an expert
here.

No response needed.

45

The International Energy Agency and the
Cement Sustainability Initiative (IEA/CSI), an
industry group of 24 major cement producers(whose members include about 33% of world’s
cement production and operate in over 100

No further change proposed. The correction factors
are intended to encourage substitution with SCMs
by rewarding cements that can be diluted with suchmaterials. The TWG thus agree with these points
that clinker substitution will be one of, if not theSummary of Cement Criteria Public Consultation - Climate Bonds Initiative22

countries) issued a report in 2018 laying out aroadmap for greenhouse gas reduction measurefor their industry sector. Their plan describes
steps needed to achieve CO2 reductions
consistent with at least a 50% chance of limiting
the average global temperature increase to 2°C
above pre-industrial levels by 2100.

most, important decarbonisation levers for the
cement industry.

“Realizing the sustainable transition of the 2
degree Celsius Scenario (2DS) implies asignificant reduction of the global direct CO2
emissions by 24% compared to current levels by
2050…8Efforts made under this scenario would result inan average temperature increase of 2.7° C by
2100.” In the roadmap, reductions in carbon
emissions to conform to the 2DS depend slightly
on thermal energy efficiency (3%) and fuelswitching (12%), but mostly on clinker
substitution with low carbon materials (37%)
and, in the long-term, on the future
development technologies such as carbon
capture and storage (48%) for the industry.
Since the promise of carbon capture andsequestration has yet to be realized and is not
anticipated to be effective at scale anytime
soon, and the peril of rising climate gases in theair (according the last latest IPCC report) imperil
humanity’s existence, taking actions to reducethese emissions from the cement sector withstrategies and technologies which will know will
deliver discrete, measurable, and consistent
reductions would seem prudent. The IEA/CSI
report clearly points to clinker substitution as
the most potent path toward carbon reductionsin this sector.
Appropriate
thresholds for
retrofits or
installation of
measureswhich reduce
emissions:
Would 30-50%
reduction be asuitablethreshold?

46

For the improvement rate needed, the target is
50% improvement in 30 years (Criteria
document, page 14). For a single investment
this is out of the question. For shorter periods (5years or below) it is 30% which is the minimum.
In our opinion chasing these targets issignificantly challenging for single
installations/investments. For a portfolio ofinvestments this might make sense. Industry
wide threshold cannot be used at plant level.
Apart from technology development, two otherissues are to be considered:A) InfrastructureB) Public acceptance / Policy framework.
The conditions have not yet been achieved tomake decarbonation in the cement industry an
investable proposal. The market, including thegovernmental market, is ill prepared for low
carbon cements and their consequences. Also,
the needed infrastructure (e.g., renewableenergy, collection for recycling of concrete

Climate Bonds and the TWG agree that these
proposed thresholds are overly ambitious and notreflective of available technological improvements.
As such, decarbonisation measures are either:a)automatically eligible due to their
mitigation benefit and lack of downside,or:b) eligible if part of a bundle of measures
which achieve the same level of emissions
reductions seen in the pathway for theperiod of the bond tenor
These measures are intended to allow investments
in old facilities to be potentially eligible if themeasures being implemented meet these criteria.
Automatically eligible measures are relevant forinvestors wishing to invest in capital investments
across a range of assets through loans etc.

8 https://www.iea.org/news/cement-technology-roadmap-plots-path-to-cutting-co2-emissions-24-by-2050

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative23

waste, CO2 network, etc.) is not available oravailable in a limited way.

We suggest replacing the whole approach bymere contribution to achieving the pathway.
47

Chart 4 in Section 3.2.2 should be deleted forthe following reasons since it is considered toprovide an incorrect information.
1.

There are few new facilities with an energy
efficiency of 30% in cement plants. Though
it is possible to provide substantial energy
conservation using NSP or SP, such facilities
have been already installed at the mostcement plants. See the below figure 1.

Criteria document:
Climate Bonds and the TWG agree that these
proposed thresholds are overly ambitious and notreflective of available technological improvements.
As such, decarbonisation measures are either:a)automatically eligible due to their
mitigation benefit and lack of downside,or:b) eligible if part of a bundle of measures
which achieve the same level of emissions
reductions seen in the pathway for theperiod of the bond tenor
These measures are intended to allow investments
in old facilities to be potentially eligible if themeasures being implemented meet these criteria.

Figure 1 Thermal energy
efficiency and kiln capacity bykiln type

Automatically eligible measures are relevant forinvestors wishing to invest in capital investments
across a range of assets through loans etc. Thismeans that, even if at a single plant level theemissions reductions are minimal, collectively they
are significant and should be encouraged.

Background paper:
For instance, all kilns in Japan are composedof SP and NSP kilns. The transition is shownin Figure 2.

Figure 2 Kiln capacity by the kiln
type in Japan

Therefore, the proposed mitigation criteria
in Chapter 3.2.2 are inappropriate, because
Japanese cement companies do not reduce
CO2 emissions using substantial reduction
equipment with more than 30%, but anaccumulation of minor reduction measures
Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

Feedback is highly valued on the list ofautomatically eligible assets. For clarity, SCM
production is removed from the list ofautomatically eligible assets. However, the TWG
held the view that equipment dedicated to the
production of SCMs such as calcined clays andother SCMs should be eligible providing it isdedicated to the production of such materials as
distinct from clinker. The Cement Criteria do not
define optimum cement products for use, though
this is a desired effect in the market. Ultimately,
these criteria are intended to signal what ‘good’
looks like from a climate perspective. The cement
market determines which of these solutions is mosteconomical.
While true that cement production is highly subject
to regional contexts, reliance on regional pathways
is problematic. Firstly, it does not guarantee thatthey meet the necessary ambition needed to meet
1.5oC in the sector. Secondly, some regions do nothave their own pathways which makes a global
pathway a necessity. Ultimately, the entity level
criteria in the Cement Criteria reflect regional
contexts to an extent: companies that are not yeton the pathway can meet Tier 2 requirements
through meeting the pathway by 2030 and having atransition plan that demonstrates how they will get
24through operation management shown in
Figure 3.

there. This would give ample time to overcome
various regional barriers currently faced.

Figure 3 Specific thermal energy
consumption for cement production
Kiln capacity by the kiln type in Japan

source:https://www.jcassoc.or.jp/cement/2eng/e_01a.
html

2.

An efficiency when installing multiple
energy conservation facilities cannot be
simply obtained by summing up all
efficiencies since it may be offset between
those of the facilities.

Background paper:
In section 4.4.1 on page 22-25, the measuresand outlooks from 4.4.1 (recovery of wasteheat) to 4.4.9 (grounding/mixing) are generally
correct except for 4.4.2.
Regarding the SCM of 4.4.2, the effects ofCalcined clays, Limestone and Silica fume on
their performances are overestimated. Since
Japan is a country where many earthquakes
occur frequently, the safety criteria are strictly
set for the Building Codes and the clinker ratio is0.83 even higher than the world average valueof 0.72. Since "threshold values" are discussed
without considering national/regional
circumstances at all, the document will not be a
global guideline.
48

We do not think it possible for Japanese cement
sector to realize 30 to 50% reduction fromretrofits or installation. The reason is quite
simple. The Japanese cement companies havealready introduce the current best-practiceenergy saving facilities in its factories since
1990’s. If you look at the attached paper, you
may see how the Japanese cement sector’senergy consumption is lower than others.
In Japan, we do accept any best-practice
retrofits or installation measures listed in METI’s

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

Climate Bonds and the TWG agree that these
proposed thresholds are overly ambitious and notreflective of available technological improvements.
As such, decarbonisation measures are either:a)automatically eligible due to their
mitigation benefit and lack of downside,or:b) eligible if part of a bundle of measures
which achieve the same level of emissions
reductions seen in the pathway for theperiod of the bond tenor
25transition roadmap, which were listed fromJapan’s technical experts for cement and lowcarbon technologies, which include academia,
global investors, verifiers and METI’s in-house
experts.
Please refer the attached committee members’
list for METI’s technical roadmap.

For low emission building criteria, CBI consider
the national difference. I recommend you tomake plural reduction threshold by country, like
low-emission building criteria.

49

Should digitisation measures be allowed as
automatically green if the plant is dirty?
Especially when it wouldn’t provide a 30%
reduction in emissions as conditionally eligible
ones do.

These measures are intended to allow investments
in old facilities to be potentially eligible if themeasures being implemented meet these criteria.
Automatically eligible measures are relevant forinvestors wishing to invest in capital investments
across a range of assets through loans etc. Thismeans that, even if at a single plant level theemissions reductions are minimal, collectively they
are significant and should be encouraged.

While true that cement production is highly subject
to regional contexts, reliance on regional pathways
is problematic. Firstly, it does not guarantee thatthey meet the necessary ambition needed to meet
1.5oC in the sector. Secondly, some regions do nothave their own pathways which makes a global
pathway a necessity. Ultimately, the entity level
criteria in the Cement Criteria reflect regional
contexts to an extent: companies that are not yeton the pathway can meet Tier 2 requirements
through meeting the pathway by 2030 and having atransition plan that demonstrates how they will getthere. This would give ample time to overcome
various regional barriers currently faced.
The documents have been made clearer on thispoint. The list of automatically eligible measures
represents measures with little to no climate
downside. I.e., they deliver climate benefits today
yet do not lock-in technology incompatible with a
1.5-degree scenario for cement. They are relevant
for investors wishing to invest in capital
investments across a range of assets through loans
etc. This means that, even if at a single plant level,
the emissions reductions are minimal, collectively
they are significant and should be encouraged.
As for a threshold for improvement, this is rather
intended to allow a whole bundle of measures into
an old production facility to be eligible. However,
the Criteria now do not stipulate a minimum 30%
improvement for a bundle of measures, which wasconsidered too rigid and ambitious by the TWG.
Rather, the measures must simply deliver the sameemissions reductions as defined by the pathway.
See Box 1 in the Criteria document and section 4.6
in the Background Paper for full details.

50

We agree with the broad idea that a minimum
improvement in emissions is the best way tocapture the cumulative impact of measures. A
further step to ground the thresholds inemissions materiality and current state oftechnology.
Regarding a 30-50% reduction threshold, there
are two additional comments.
30% Minimum Reduction
To impose 30% minimum reduction for bondwith short tenors (< 5 years) could be too

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

Climate Bonds and the TWG agree that these
proposed thresholds are overly ambitious and notreflective of available technological improvements.
As such, decarbonisation measures are either:a)automatically eligible due to their
mitigation benefit and lack of downside,or:b) eligible if part of a bundle of measures
which achieve the same level of emissions
reductions seen in the pathway for theperiod of the bond tenor
26demanding as these are significant retrofits andrequire a longer period of transition. While it isevident that the instalment of waste heatrecovery systems can result in a 30% reduction
in overall plant electricity needs (IFC, 2021), it
does not follow that there could be a 30%
minimum reduction in emissions just from this.
50% Upper Limit
Setting a 50% upper limit for longer term
issuances is reasonable but also implicitly
assumes further technological improvements
down the line.
Drawing on the other idea about technologicalviability in the CBI white paper, it is important toalso assess current and expected technologies.

These measures are intended to allow investments
in old facilities to be potentially eligible if themeasures being implemented meet these criteria.
Automatically eligible measures are relevant forinvestors wishing to invest in capital investments
across a range of assets through loans etc. Thismeans that, even if at a single plant level theemissions reductions are minimal, collectively they
are significant and should be encouraged.
As for early-stage design, the TWG strongly agreed
this was key to decarbonising the whole cement
and concrete sector. However, as it covers
concrete, it was unfortunately outside of the scopeof criteria.

Most of the current upgrades come in the formof heat recovery systems or waste heatrecovery systems, but thermal emissions only
make up 40% of the total carbon emissions of
cement production (IFC, 2021). For structures, it
is reported that GHG emissions reductions ofmore than 50% can be achieved through earlystage interventions and optimized design(Allwood, 2021). However, this level of
improvement requires early engagement witharchitectural, transport, civil engineering,
design, and construction institutions in asystematic way to implement materiallyefficient and reusable design for vehicles,machinery, buildings and infrastructure. For
these reasons, a retrofitted upgrade is unlikely
to see these levels of reductions. As such, there
is an implicit assumption of technologicalimprovement that we are imposing if we wereto adopt the 50% reduction.
51

It is appropriate for this use case to have athreshold for retrofits or installations. However,
we are not best placed to provide a specificcomment on a suitable threshold. Additionally,
more clarification is needed on themethodology to set the appropriate threshold.

See clarifications in previous points (46 onwards).
The methodology now simply links to the pathway
set, making it more robust and simple.

52

What is the basis of the 30–50% ambition andhow does it fit with the pathways?

See clarifications from previous points (46onwards).

Not clear how this fits in with the general
requirement to meet emissions intensity
pathways?
Even 30% seems like a large improvement for
one-off measures but if it is for a series ofmeasures throughout the plant then it isreasonable.
53

The proposed reduction level are quite steep.
The team should revaluate the threshold values
given that there are several challenges in termsof high investment, lack of policy support etc.

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

See clarifications from previous points (46onwards).

27

54

Provided that the changes do not preclude theaddition of other measures, this is fine. The key
issue is amine scrubbing – it’s not good enoughlong term.

See clarifications from previous points (46onwards).

55

Since the majority of emissions are from thecalcination of the limestone, measures that
reduce the production of clinker are necessary.
Retrofits that add preheaters/precalciners toolder kilns or replace wet kilns with dry kilns
could be seen as a transition strategy toincreasing efficiency in the industry.

See clarifications from previous points (46onwards).

Because cement kilns are expensive to build andthey are often built near a local source of
limestone, many older kilns are still being
operated across the world. Some of these kilns
are older, inefficient “wet” kilns which use much
more energy to operate than newer kilns withpreheaters/precalciners.

These comments are highly valued. Converting wet
to dry kilns is a considered a crucial first step formany plants. However, the TWG made the pointthat this is effectively building a new facility. As
such, at this stage, the facility should be expected
to meet the overarching emissions pathway.

For an industrial sector which is already one of
the most energy intensive sectors globally, evensmall improvements in efficiency could yieldhuge benefits to the climate. Even in the UnitedStates, a number of cement kilns continue to
use the absolutely most energy inefficient
cement making process available, essentially
gobbling up any emissions reductions thatwould/could be made at modernized kilns.
According to industry sources, of the 128 kilns
at the 91 U.S. cement plants, 10 wet kilns still
remain in operation in the United States. Theenergy intensity of wet kilns is 5.5 MMT btu/ton
cement while a kiln with apreheater/precalciner is 3.1 MMT btu/ton
cement, essentially there is a much lower
energy intensity demonstrated for the various
dry processes.9
Clearly, steering carbon bond investments
toward replacing all the wet kilns in the world
with dry kilns using preheaters and precalciners
would make a major dent in the carbon
intensity of cement globally since kilns using
preheaters/precalciners use approximately 45%
less energy that wet kilns.
Biomass
feedstock as afuel source –additional
criteria for
usage

56

For carbon neutrality of biomass materials, a
separate set of criteria is applied. We have notassessed the concept of CBI on carbon
neutrality of biomass but insist that fuel switch
to biomass is always eligible.

In order to align with other Climate Bonds sector
criteria, Biomass must meet the Bioenergy Criteria.
Moreover, the TWG advocated their use only undermeeting certain conditions such as demonstrating
lower GHG emissions and avoidance of Indirect
Land Use Change (iLUC).

57

It is understandable that the consideration of
iLUC in Section 3.2.4 is very important.
However, since an energy usage composition
varies depending on the country or regional

In order to align with other Climate Bonds sector
criteria, Biomass must meet the Bioenergy Criteria.
Moreover, the TWG advocated their use only undermeeting certain conditions such as demonstrating
lower GHG emissions and avoidance of Indirect

Bohan R. 2019. Development of Alternative Fuels in the U.S. Cement Industry. Portland Cement Association. ZKG 1-2.
https://www.zkg.de/en/artikel/zkg_Development_of_alternative_fuels_in_the_U.S._cement_industry_3302670.html
9Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

28

58

circumstances, iLUC should be applied as anational/reginal option.

Land Use Change (iLUC). While iLUC may beregionally variable, if it is low risk in certain regions,issuers should have no problem meet the Bioenergy
Criteria and demonstrating iLUC is not taking place.

I agree to this criteria. Also, I agree to commentthat this fuel as an alternative fuel and theyshould no longer be expected to act as analternative when more suitable alternative fuels
become readily available.

Climate Bonds and the TWG agree with thiscomment and thus no change is proposed.

I reality, we expect such next generation lower
fuels such as ammonia or hydrogen technology
is likely to realize in 2040’s.

59

We agree with using Climate Bonds Bioenergy
Criteria and the 2 conditions set out.

Climate Bonds and the TWG agree with thiscomment and thus no change is proposed.

Additional Criteria

On the inclusion of biomass by-products, these fueltypes could fall under the criteria for waste-derived
fuels.

An additional criterion would be the inclusion of
local conditions/regulations as far as possible. In
the Egypt Cement sector, they use biomass byproducts from the sugar industry (Cement
News, 2019). This promotes circularity andreduces reliance on fuel subsidies.
Timeline
Regarding the timeline to phase out feedstock,
regulations and policies are not well defined so
we take guidance from the market by examining
the different plans and timelines set out by
issuers.

As for timelines, Climate Bonds criteria are regularly
reviewed. This includes review of available fuels forthe sector and thus if preferable fuels emerge toBiomass, the TWG may consider blanket exclusion.
For now, however, few alternatives exist to fossil
fuels and it was therefore seen unsuitable toexclude Biomass outright.
See section 4.7.1 for full rationale.

Bulk of the issuers we cover are considering
setting a minimum alternative fuels rate by acertain date in the future.
Most are targeting a 40%-50% alternative fuelrate by 2040-2050. This is challenging but
achievable. As available options increase in the
future, it is worth increasing this threshold over
time.
60

The additional criteria on biomass feedstock
production is appropriate since section 3.2 of
the Climate Bonds Bioenergy Criteria is robust
and comprehensive providing mitigation
requirement of criteria. Our suggestion is toalign with the roadmap used on the timeline forbiomass use.

Climate Bonds and the TWG agree with thiscomment and thus no change is proposed.

61

It is not clear whether the criteria are about
whether or not such sources may be used at all,or about whether they may be considered CO2neutral.

Climate Bonds and the TWG agree with thiscomment and thus no change is proposed.
Note, emissions from biomass burning are notviewed as zero emissions in the accounting.

In general, any criteria strengthening the needto justify that a fuel is CO2 neutral is a goodthing.

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

29

62

The cement sector follows the IPCC guideline todetermine carbon neutrality of biomass. Use of
biomass has also been identified as adecarbonization lever by the technology
roadmaps.

Climate Bonds and the TWG agree with thiscomment and thus no change is proposed.
Nonetheless, in order to align with other Climate
Bonds sector criteria, Biomass must meet the
Bioenergy Criteria.

Use of biomass is also acceptable by UNFCCC as
carbon mitigation option.

Therefore, our recommendation is that theswitch to biomass should be acceptable.
63

Land use change is incredibly complex.
I agree with allowing biogenic waste fractions to
be burned (with the caveat above on lack ofambition in the decarbonization pathway if theyare).
Cement has a very viable set of alternative andclimate neutral fuels to biomass. I would
personally put biomass out of scope – it’s anincredibly wasteful use of a valuable material touse it in a cement kiln. Possibly I would allow
burning of waste biomass materials (i.e.
materials that are a by-product of foodproduction).

64

Adaptation &Resilience
Criteria

65

The TWG agree with the comments that biomass is
not a long-term solution for cement fuel switching
and brings with it considerable risks. However, inthe same way as burning waste-derived fuels, it wasconsidered necessary to allow biofuels as atransition fuel. Alignment with the Bioenergy
Criteria would then minimise the risks that comewith such fuels.
As criteria are reviewed, the TWG will consider
whether such fuels should be excluded, or a specificcut-off date set for their inclusion.
See section 4.7.3 for full rationale.

Biomass use as fuels - generally called biofuels is not a path GAIA is supportive of; including
biofuels use should not be an eligible activity toreceive climate bonds, as it would create
perverse incentives to use a finite resource
generating a very significant amount of GHG
emissions. If utilised, the use of biofuels should
also be included in the scope for accounting of
GHG emissions.

See response for comment 63.

We do not have much to add to the checklists in
3.4.1 and 3.4.2.

No response needed other than Climate Bonds will
aim to add additional context and material forverifiers. Few templates exist from companies but
other comments (see comment 67) indicate there
are common industry practices for this. As such, theverification cost should not be overly onerous.

Main question would be how we would
operationalize these requirements.
While it is the issuer’s responsibility to provide
the information, certain considerations come tomind:- Are there standard documents for theseconcerns, especially for 1.2, 2.1 and 4.1?

Emissions from biofuels are indeed included in thescope of GHG accounting for these Criteria. This isclarified now in the documents.

Unclear what section 3.4 is referring to. However, averifier would be one of CBI’s approved verifiers,
not the financial institution or asset manager.

- 3.4 mentions the range of assessment andimpact reports and associated data but do wehave actual templates from companies? Whodetermines the standard?
- Has a pilot study been conducted especially for
either project finance or corporate finance?
How was it received?
- How much additional costs would this impose?

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative30

- We are also assuming that the verifier
mentioned in 3.4 would be the SPO, not thefinancial institution or the asset manager?
66

We are not best placed to provide feedback on
this topic.

No response needed.

67

This is a standard industry practice and isacceptable.

Comments well received.

68

Not an expert here.

No response needed.

69

In the Background Paper, Section 4.4.6, CBIstated that using “waste streams stripped of therecyclable content” will displaces theconsumption of fossil fuels with little to nodownside. This is clearly oversimplifying thecomplex issues behind waste burning activity.
There are many significant environmental risks
that should be taken into account in using waste
as alternative fuels:

See section 4.7.3 of the Background Paper for fullrationale for the inclusion of waste-derived fuels in
cement plants.
See section 6.3 in the Criteria document for the
additional requirements for such fuels.
The Cement Criteria have been updated to reflect
concerns with using waste-derived fuels, namely:

1. Waste that is used as alternative fuels (e.g.
Refuse-Derived Fuel) is in fact fossil-fuel indisguise which will significantly harm ourclimate.
In addition to our feedback on question two, wemust acknowledge that “the non-organic
fraction of municipal waste streams, stripped of
the recyclable content” is actually a mix ofvarious waste dominated with fossil-basedmaterial. Typically RDF is comprised of: 31%
plastic, 30% unknown, 13% paper, 14% textiles,
and 12% wood.10 Sadly, a lot of textile waste isalso made from synthetic plastics-basedmaterial11 and/or coated with plastics such
Perfluorinated Compounds (PFAS)12 — which isused to gain water-resistant and stain-resistantcharacteristics. Moreover, the “unknown”
fraction is likely to contain some type of plastics,
such as waste tires and plastics-laminatedpackaging. This means that over more than 60%
of RDF is plastics or containing plastics.

••

Emissions from waste burning are now
accounted for
All recyclable content must be removed inline with the Climate Bonds Waste
Management Criteria, representing more
stringent requirements on recycling.

Consequently, using waste streams as source ofalternative fuels does not displace theconsumption of fossil fuels. It only displace one
fossil-fuel with another and perpetuate fast
growing plastic production — locking in new
fossil-fuel infrastructure and increase emissions
that arise from the exploration, extraction,transport and refining of oil, gas, and coal.13
2. Using “waste streams stripped of therecyclable content” as alternative fuels does notchange the fact that many plastics arehalogenated and rich in various harmful
10 Currie, J. (2011), The valorisation of SRF in cement kilns, Workshop and site visit: Production and utilisation options for Solid Recovered Fuels, IEA Bioenergy Task 32 and 36, Dublin, 20-

21 October 2011, quoted in “La puerta de atrás de la incineración de residuos”. Greenpeace, 2012.
11 https://www.eea.europa.eu/themes/waste/resource-efficiency/plastic-in-textiles-towards-a/
12 https://ipen.org/documents/pfas-clothing-study-indonesia-china-and-russia-shows-barriers-non-toxic-circular-economy
13 https://www.boell.de/en/2019/11/04/climate-change-not-green-greenhouse

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative31

chemical types. Harmful chemicals such as
Bisphenols, Alkylphenols, PFAS, Brominated
Flame Retardants (BFRs), Dioxins, Phthalates,
UV Stabilizers, Lead and Cadmium are expected
to be found in household waste streams.14
Plastic waste —in particular those containing
halogens such as PVC,
polytetrafluorethylene/teflon, plastic containing
brominated flame retardants— can cause
emissions of hazardous substances, such as acidgases and unintentional persistent organic
pollutants such as dioxins.15
Additionally, hazardous domestic waste like
Waste Electrical and Electronic Equipment(WEEE) —containing various toxic chemicals
with flame retardants— are often found mixed
in the municipal waste streams. This situation isparticular in countries where separated waste
collection is not happening, especially Global
South countries.
Consequently, determining the halogen content
through a chemical analysis of waste-derived
fuels should be done to avoid production of
Persistent Organic Pollutants (POPs) —particularly dioxins. However, there is no legal
requirement on how often this analysis should
be conducted and on which halogens it should
focus — a toxic loophole that should be closed
through excluding waste-derived fuels burningfrom the draft criteria.
3. It is very hard to guarantee that both all
recyclable content is stripped from waste, andthat waste burning cement kilns will not hinder
recycling targets
There are numerous factors that determine
whether a material is recycled or not. Material
that is theoretically or technically recyclable
might not get recycled in various contexts. For
an example, a PET bottle could probably not get
recycled when in the particular location: 1) thewaste collection coverage is low level; 2) it haspoor quality of waste separation; 3) the city
lacks of solid waste management systems,
infrastructures, and budget; 4) the situation of
local recycling markets and supporting policies
does not encourage recycling. Additionally,
separating waste based on its chemical (e.g.
halogen) contents is difficult to conduct
anywhere in the world. Since both nonrecyclable and recyclable waste can be used asalternative fuels to cement kilns, waste
prevention and recycling are discouraged, while
tending to lock-in an increasing generation ofwaste over time.
In 2017, the City of Ljubljana, which has
implemented separate collection of packaging
waste and biowaste, found ±40% of recyclable
14 https://www.endocrine.org/topics/edc/plastics-edcs-and-health
15 https://pubmed.ncbi.nlm.nih.gov/29035713/

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative32

waste in its residual waste. Similarly, The City of
Milan also had ±40% of recyclables —mostly
paper and cardboard— after achieving 60-65%
separate collection.16 Thus, burning waste asalternative fuels are likely to burn somerecyclables and hinder further progression ofrecycling rates. This can be observed in Seoul17,
Madeira and Azores18, etc. where
cities/municipalities are bound to send wastewith high calorific value for 20-25 years.
4. Burning plastics as fuels also pose higher
maintenance costs for cement production
facilities due to the halogens emitted whichcause corrosion in thermal facilities.19
As explained in the first point, plastics are rich in
halogenated substances. A recent report byInternational Pollution Elimination Network(IPEN) highlighted that chlorine and bromine
may accumulate in cement kiln systems limiting
their capacity for thermal recovery of plastic.
Hence, the utilisation of Refuse-Derived Fuels
requires tighter specifications, including limits
on mercury and chlorine content which can beemitted from burning operations, corrode
cement kilns or reduce the quality of thecement produced.20
5. Many countries are neither prepared nor
equipped to monitor POPs emission fromburning waste-derived fuels in cement kilns. An
example from Indonesia where dioxin and furanemission monitoring from cement kilns is only
mandated once every four years with theemission standard of 0.1 ng TEQ/Nm3(stipulated in the Ministry of Environment andForestry Regulation No. 19 year 2017
concerning emission standard for the cement
industry).21 Accountability and transparency ofemission monitoring results has been a longwinding problem as well. In the Philippines,
POPs monitoring are subject to self-reporting
and the disclosure of compliance reports; no
independent monitoring data was madeavailable. Moreover, for many developing
countries, local laboratories capable of sampling
and analysing dioxins (PCDDs/PCDFs) are either
nonexistent or very limited in numbers.
6. High temperatures do not happen all year
long in cement kilns. In Section 4.4.6.
“Alternative fuels” in the background paper, CBIstates that cement kilns “can burn a wider rangeof waste streams for its calorific requirements,
due to operating at higher temperatures toother industrial processes”. This statement
assumes that burning waste in a very high16 https://zerowasteeurope.eu/library/building-a-bridge-strategy-for-residual-waste/
17 https://seoulsolution.kr/sites/default/files/policy/03_Smart%20Waste%20Management%20in%20Seoul_final.pdf

18

https://zerowasteeurope.eu/library/the-hidden-costs-of-incineration-the-case-of-madeira-and-azores/

19 https://www.tandfonline.com/doi/abs/10.1080/10643389.2020.1717298?journalCode=best20
20 https://ipen.org/sites/default/files/documents/ipen-plastic-waste-management-hazards-en.pdf
21 https://ipen.org/documents/refuse-derived-fuel-indonesia

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative33

temperature will result in zero toxic waste oremissions is flawed. It is true that a cement kiln
can reach up to 1,450°C when operated innormal conditions. However, there will beevents when the temperature of the flue gas is
below 850°C (or 1,100°C if the presence of
halogenated content of organic substances
above 1% of the waste content) when therequired temperature levels to prevent POPs
formation is not achieved. These events canhappen during "other than normal operating
conditions" such as scheduled start-ups andshut-downs, unscheduled down times, andtechnical accidents.
Recent studies indicate that it is not uncommon
for large combustion facilities to be operating inthese “other than normal operating modes.22
Studies have shown that even small changes intemperature can result in large changes inconcentrations of POPs in the flue gas. One casestudy from ‘state of the art’ waste-to-energy(WTE) incineration plant, Reststoffen Energie
Centrale (REC) in Harlingen (the Netherlands)
has depicted serious shortcomings and legal
loopholes in the temperature control of wasteburning. Therefore, even if both burning
halogenated waste are successfully avoided andPOPs emission monitoring capacity are
sufficient, POPs formation, and theirconcomitant public health impacts, are still very
likely to occur.
7. Waste co-incineration in cement kilns
releases more pollutants than waste
incineration. This means more pollution per kg
of fuel burnt is released from cement kilns
compared to waste incinerators. While thewaste incinerator sector is required to meetstrict operational and emissions standards,
these same regulatory requirements are notrequired for the cement industry sector. In
particular, the exhaust gas flow rate is higher for
cement kilns than waste incinerators, which is amajor contributing factor to the higher pollution
levels emitted by cement kilns. According to US
industry compliance data, for each tonne ofwaste burned in a cement kiln, the exhaust gas
flow rate is 5-10 times higher than in a waste
incinerator. This means that each pollutant
released from cement kilns is 7 times higher
compared to a waste incinerator. Therefore,
when measured in grams per second, or totalgrams per year a cement kiln emits far more of
the worst air pollutants than a waste
incinerator.23
8. Communities have suffered from theunchecked pollution happening in theirenvironment. To assess the real impact of waste
22 Understanding Excess Emissions from Industrial Facilities: Evidence from Texas, Nikolaos Zirogiannis, Alex J. Hollingsworth, and David M. Konisk, Environmental Science & Technology 2018 52 (5),2482-2490DOI: 10.1021/acs.est.7b04887)
23 From E.W. Kleppinger (1993) “Folly or Redemption: Can cement kilns really do the job? “ EWK Consultants Inc. 407 N Street, SW Washington, D.C. 20024-3701, paper reproduced at
http://chej.org/wp-content/uploads/Cement-Kilns-PUB-0401.pdf accessed on April 20, 2022

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative34

incineration on human health and theenvironment, bioassays could be explored byanalysing the presence of POPs in biomatrices inthe surroundings of cement kilns. A researchanalysis conducted by ToxicoWatch Foundationin three countries found that the environment
there are under threat by contamination ofsubstances of very high concern in eggs ofbackyard chicken, pine needles, and mosses.24
The analysis of chicken eggs around incinerators
shows that the majority of eggs exceed the EU
action limits for food safety as regulated in the
EU Regulation 2017/644. The results of theanalysis of the vegetation, pine needles andmosses also show high elevation of dioxin levelsin the vicinity of the waste incinerators. Hence,
continuous POPs monitoring from cement kilns
air emission, toxic ash, and biomonitoringshould be conducted to fully protect
communities around cement production
facilities where waste-derived fuels are burnt.
Studies have repeatedly affirmed that cement
plants pose significant risks for local
communities’ health.25,26 Below are somerelevant cases:● Apaxco, a small town in Mexico, has been on
the frontlines of fights against pollution from
cement kilns.27 A subsidiary of the HolcimApasco cement company named Ecoltec started
operations in 1998 and has caused at least
three major accidents in 2004, 2007 and 2009.
The accident in May 2009 resulted in strong
odours involving acrylate, which spread to a 4kilometre-radius, causing headache and eye
irritation to the community members. One
month and a half before the accident, elevenpeasants had died after breathing toxic gases
inside a well that they cleaned, presumably
contaminated by the company. Researchers
from University of Mexico (UNAM) haveevaluated the health impacts of the accident in2009 (305 people were tested) and discovered
the followings:○ 86% had symptoms of acute intoxication○ 69% of children in primary school had severe
memory damage.
○ 46% of children have some alteration inhigher mental functions.
○ 74% of those studied present some degreeof damage, which in 50% of cases is severe.
● In Western Australia, Cockburn Cement (asubsidiary of Adelaide Brighton) has been at thecentre of protests by local residents for many
years, as dust and fumes from the facility
24 https://zerowasteeurope.eu/library/the-true-toxic-toll-biomonitoring-of-incineration-emissions/25 Schuhmacher, M., Domingo, J.L., J. Garreta, Pollutants emitted by a cement plant: health risks for the population living in the neighborhood, Environ. Res. 95 (2004) 198–206.
26 Rovira J, Nadal M, Schuhmacher M, Domingo JL. Environmental levels of PCDD/Fs and metals around a cement plant in Catalonia, Spain, before and after alternative fuel implementation. Assessmentof human health risks. Sci Total Environ, 2014, 85-486:121-9.
27 https://zerowasteeurope.eu/2017/12/in-mexico-time-to-end-sacrifice-zones/

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative35

damage roofs and cars, and are alleged to harm
local residents’ respiratory health, with legal
cases pending. Adelaide Brighton has plans toincrease the use of RDF as an alternative fuel inAustralia.28● In Trbovlje, a town in Slovenia, Lafarge
Cement had been a significant source ofpollution after it took over a 130-year-old
cement plant in 2003. The facility burned
petcoke, a byproduct of oil refining, withhazardous industrial waste in the name of‘alternative fuel.’ The emissions from the facility
led to higher cancer rates in the region
compared to the rest of the county, and higher
chances of chronic respiratory illnesses amongchildren. Uroš Macerl, an organic farmer fromSlovenia, successfully shut down the facility bystopping its permit application, which was
acknowledged through the Goldman Prize in2017.29● In Brazil, LafargeHolcim started coincineration in 2003 in Barroso, Minas Gerais,and has caused constant pollution issues sincethen. Emission from the facility had immediate
effects on the local population who reported
symptoms such as sinusitis, sore throat, andrespiratory problems.30● Greenpeace conducted in-depth
investigations in Cameroon, Brazil, and India. All
cases found that there are systematically local
laws, national laws, and basic international
standards violations — adversely affecting local
communities' health.31○ In Figuil (Cameroon), the cement plant of
Cimencam (LafargeHolcim’s subsidiary) has
been regularly emitting large quantities ofpartially corrosive and toxic waste dust. The
operations in the cement plant and the open
dumping of such large quantities of corrosive
and toxic waste dust, especially near a weekly
public market, violate international standards of
cement production and would clearly be illegal
in Switzerland. As the result, people complain ofchronic and acute irritation of the skin, mucous
membranes, eyes and respiratory tract.
○ In Barroso (Brazil), the LafargeHolcim plant
has created problems since 1955. Both local andnational legislation lag behind laws of otherBrazilian states and international standards set
by the UNEP, the World Bank, and the EU. This
leads to “questionable interpretations” as to
28 https://ipen.org/sites/default/files/documents/ipen_ntn_rdf_australia-v1_3w-en.pdf
29 https://www.goldmanprize.org/recipients/uros-macerl/

30

https://www.greenpeace.ch/static/planet4-switzerland-stateless/2020/11/306f5644-lafargeholcimreport-gp_execsummary
en_greenpeace_4nov2020.pdf
31

https://www.greenpeace.ch/static/planet4-switzerland-stateless/2020/11/306f5644-lafargeholcimreportgp_execsummaryen_greenpeace_4nov2020.pdf
Summary of Cement Criteria Public Consultation - Climate Bonds Initiative36

whether the emission limits for dioxins andfurans as well as other pollutants are being
adhered to or not. Today there are still frequent
incidents and pollutant emissions, which cover
the roofs of the town with a layer of dust. Thereis strong evidence of epidemiologicallysignificant adverse health effects towards
citizens in Barroso which suffer from respiratory
diseases — which have become the mostcommon reason for hospitalization and thesecond most frequent cause of death.
○ In Ropar, Punjab (North India), theLafargeHolcim plant also systematically violates
local laws and basic international standards,
such as the air quality guidelines of WHO andthe World Bank. Publicly-available documentsfrom government show that the LafargeHolcim
subsidiary Ambuja Cement has built an illegally
operated fly ash drying plant which releases
high emissions. There are shocking images offugitive dust emissions from the cement
production inside private homes — causing
irritation of the skin and burning of the eyes.
9. Incineration of plastics does not eliminate thepresence of microplastics and its toxic additives
in ash. Although the public awareness of healthconcerns from stack emission of waste
incineration is growing, the toxic potency ofcontamination from waste incineration ash andits ‘green’ applications are being largely
underestimated. In contrast to the abundanceof data on flue gas emissions, data on hazardous
substances in bottom and fly ashes from waste
incineration are not widely available. Studies
have revealed the neglected presence of
microplastics from waste incinerator fly ash andbottom ash — which adsorb all kinds of heavy
metal on the surfaces of microplastics.32, 33,34
Another report by Zero Waste Europe mapped
eight studies on waste incinerator bottom ash
and found that POPs, such as PCDD/Fs and
PFASs, are present in bottom ash in larger
volumes than in fly ash.35 In fact, PFASs
accumulate at three times greater the total
concentration in bottom ash than in fly ash.
Even a very small amount of POPs —also known
as the “forever chemicals”— should not be
deemed negligible due to their toxic,
bioaccumulative, and highly persistent nature.
Reutilization of incinerator ash as alternative
raw materials (e.g. as construction material ormixed into cement as raw material) would
contribute to the release of POPs and toxic
heavy metals into our environment. A study
concluded that RDF usually has a higher content
of Sb, Hg, Cd, As, Pb, Cu, Cr and Zn than petcoke. On the other hand, coal can also present
32 https://pubmed.ncbi.nlm.nih.gov/32763713/
33 https://www.sciencedirect.com/science/article/abs/pii/S0048969721015965
34 http://hjhx.rcees.ac.cn/en/article/doi/10.7524/j.issn.0254-6108.2019070805
35 https://zerowasteeurope.eu/wp-content/uploads/2022/01/zwe_Jan2022_toxic_fallout_research_report.pdf

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative37

large amounts of Hg, Co, Cd and Tl.36 These
residues are often perceived as “useful”
applications or as “green” solutions throughout
the construction sector.37 However, the content
of hazardous compounds in those options
exceed the safety limits recommended byscientific researches and the amended Basel
Convention. A study showed thatstabilization/solidification of incinerator fly ash
is only a temporary concentration control. It
could not guarantee its long-term security andstability, especially under an acidenvironment.38 When a cement production
facility “recycles” toxic ash into the kiln the sinkbecomes the clinker and the product become
toxic cement. Both should not be considered as
an environmentally sound practices due to thehigh potential of toxic chemical leakage (e.g.
heavy metals, dioxins, PCBs, PFAS, and otherpersistent organic compounds).
Additionalcomments onentity criteria

70

The time period for the cement industry should
be considered not only focusing on the carbon
transition but having a well-balanced transition
harmonized with development for low carbon
technology, activities for a circular economy andcontribution to the SDGs.
For instance, the Japanese government recently
made a public the cement transition roadmap
collaborated with Japanese cement sector. This
roadmap includes not only reduction measuresof CO2 but also activities for circular economy.

Climate Bonds sector criteria are intended todirectly address climate impacts of investments. As
such, non-climate environmental objectives such as
water and other SDGs are normally not included.
However, circular economy is an important aspect
addressed for the use of waste-derived fuels. Land
use Change is another important aspect addressed
for the use of biofuels.

https://www.meti.go.jp/policy/energy_environ
ment/global_warming/transition/transition_fina
nce_technology_roadmap_cement_eng.pdf
71

Please reconsider whether the current single
transition pathway for all the countries
appropriate or not.
I do not think it realistic even if you make agrace period.
In order to switch from the current situation toalign with the transition pathway, and it needs
huge amount of funding for them. I think suchfinancing can also be named as transition
finance.

72

Striking the balance between pragmatism andlong term net zero aspirations is key. The
question and background paper already alludes
to this but there should be a morecomprehensive carrot and stick approachinstead of just a simple grace period.
There are already building blocks of thisapproach in the financing markets. For
companies who have already adopted a net

The transition pathway chosen for companies is
adopted from the SBTi 1.5-degree approach which
was in turn developed through close stakeholder
engagement with industry. Moreover, it reflects a
carbon budget necessary for a 1.5-degree warming
scenario. The level of ambition thus cannot be
lesser than this. Alternative pathways do not exist
for specific regions, moreover.
See section 4.3.1 in the Background Paper for fullrationale of the company level pathway andmethodology.
An updated methodology is now set for cementcompanies. It includes a two-tier certification
system to provide the flexibility this comment
proposes.
Full details are found in section 5 of the Criteria
document, and section 4.3.1 of the Background
Paper.

36 Genon G, and E. Brizio. Perspectives and limits for cement kilns as a destination for RDF. Waste Management, 2008 (New York, N.Y.) 28, 2375 – 2385.
37 https://zerowasteeurope.eu/wp-content/uploads/2019/11/zero_waste_europe_cs_the-hidden-impacts-of-incineration-residues_en-1.pdf
38 https://www.researchgate.net/publication/328692248_Review_on_Cement_StabilizationSolidification_of_Municipal_Solid_Waste_Incineration_Fly_Ash

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

38

zero target by 2050 and already performing ator below the carbon emissions intensity, theESG financing market has demonstrated theappetite and depth.
We suggest that flexibility in the loan structures
can be built in to accommodate the lead time it
requires for initiatives to bear fruit. For
companies who have demonstrated otherwise,
the capital markets would become more andmore difficult to access as cost of capital willcontinue to increase.
73

74

More clarification on the certification approach
would be helpful. Could you please clarify how
this differs from an initiative such as SBTi andhow do companies use this certification withrespect to finance?

Clarification is now provided in the document. See
section 5 of the Criteria document and section 4.3.1of the Background Paper for full details.

Rather than a grace period, could a convergenceapproach be used (as is the intention of the
SDA)?

The Cement Criteria now adopt the SBTi pathway
for companies. However, it was concluded by
Climate Bonds and the TWG that the convergence
tool as used by SBTi will not be used.

In short, the SBTi pathway is adopted forcompanies, but the convergence mechanism isdifferent for the Cement Criteria. They instead
prefer to require all companies to meet thepathway by 2030 at the latest.

Requiring all companies to converge on a common
endpoint by 2050 works assuming that allcompanies adopt the pathway and method.
However, Climate Bonds cannot assume that allcompanies will do this, let alone meet the pathway.
Climate Bonds thus prefers to instead require amore aggressive convergence with the sectoral
pathway to avoid the risk of overshoot. Ultimately,
this will be harder for companies not yet on thepathway, but easier for those already beneath it.
Full details and rationale are found in section 5 of
the Criteria document and section 4.3.1 of the
Background Paper.
75

The standard should consider providing moretime to companies from emerging or underdeveloped countries.

The two-tier certification system is intended toachieve this. In other words, regions or countries
that are in earlier stages of development or
decarbonisation can meet the Tier 2 requirements
which allow a period of not meeting the pathway
while a transition plan is enacted that will allow
them to achieve the pathway.
Full details and rationale are found in section 5 of
the Criteria document and section 4.3.1 of the
Background Paper.

76

5 years for developed countries, 10 for allothers.

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

The two-tier certification system is intended toachieve this. In other words, regions or countries
that are in earlier stages of development or
decarbonisation can meet the Tier 2 requirements
which allow a period of not meeting the pathway
while a transition plan is enacted that will allow
them to achieve the pathway.

39

Full details and rationale are found in section 5 of
the Criteria document and section 4.3.1 of the
Background Paper.
77

The cement industry is vertically integrated.
Each company owns facilities that aremodernized and facilities that are old, highly
inefficient wet kilns. Continuing to use theolder, more energy intensive kilns adds to theindustry’s (and the company’s) tremendous
carbon footprint. Efforts should be madeimmediately to retire these older cement
plants. For example, due to the passage of theInfrastructure Bill in the US, cement production
will rise in the United States, therefore
investments made now to retire all the old wet
kilns and move to more sustainable building
materials would have huge impacts on the
carbon footprint of that new
infrastructure.Those investments, which would
reduce fuel usage at the kilns and start thetransition to more sustainable construction
materials should be made immediately to
reduce the impact of the increase of carbon
from cement production.

Climate Bonds and the TWG fully agree with thesecomments. Improved kilns are encouraged throughthe emissions pathway for facilities.
The TWG strongly agreed better use of building
materials was key to decarbonising the wholecement and concrete sector. However, as it covers
concrete and other sectors, it was unfortunately
outside of the scope of criteria.

As well, the kiln infrastructure in China also has
newer, more efficient kilns, and older,
extremely inefficient kilns. It would seem that asound transition policy for the cement industry
might be to invest in modernizing all the old,
inefficient cement kilns in China while more
modern building materials, which are truly low
carbon, can get adopted into building codes
globally.
Since the ultimate solution to the incredible
carbon emissions from super-heating limestone
to make pozzolons is to replace this practicewith the use of true low carbon building
materials, time will be needed to to educatearchitects, builders, and craftsmen on how to
use those materials safely and bothgovernment, planners, and local building
inspectors will need to be trained and certified
on how to properly and safely use these newmaterials. This transition will take time,
dedication, and lots of education. It must be ourimperative to start now.
General,including
editorials &clarifications

78

Background Paper (section 2.2):
Key levers to decarbonise are missing here
- Fuel substitution- CCUS- Efficiencies

Climate Bonds is grateful for these comments andhas implemented them into the documents.

See GCCA roadmap for further details
79

Background Paper (section 2.3, page 10):
Generating between 6 and 8% of man-madegreenhouse gas emissions -> of CO2 emissions[cement is around 3% of GHG emissions]

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

There are a wide variety of sources stating different
numbers. Rather than stipulating an actual number,
the wording will rather reflect that the number lies
somewhere in this range.
40

80

Mineralisation to be added along with carbon
cured solutions

Potentially outside of scope as occurs at theconcrete stage.

81

Background paper (section 2.4 - investments
page 11):This is simply added for context that in some
limited cases, timber solutions can be used inconstruction. It is not part of the criteria, however.

Wood based solutions is not a relevant
investment here – to be deleted
82

Draft background paper page 11:“The Energy Transitions Commission estimatesthat cement will be the costliest of all theindustrial sectors to decarbonise by somedistance” – reference ? this is contradictory toother studies – should be deleted

83

Draft background paper (page 14, section
4.1.1):
Please turn the paragraph in a positive way anduse the word increased efficiency as opposed todilution. => It is easy and cheap to lower theembodied carbon of a tonne of cement by using
it more efficiently – more efficiency in clinker, incement and in concrete.

This wording can be deleted as it is a disputed andvague sentence.

The wording has been changed accordingly to
strike a more positive note for making emissions
reductions in the sector.

This is contrarily to what the document claims, afuture proof strategy.
84

Draft background paper (page 19, section 4.3
intro):

No response needed.

It is not correct to say that 95% reduction canbe achieved without breakthrough technologies
85

We find the approach of green labelling of somespecific installations/ equipment far too
simplistic and even actually incorrect for some.
General statements on required subinstallations cannot be made as each plant isdifferent. Installations need to be looked at in
an integrated way.
The concept suggests taking from the bookshelfa sub installation that is green and eligible,
while there is always much more behind
ECRA’s technology papers (2017) also indicatethat just putting improvements together is notpossible.

This comment is well received, but this relates
more to financial investment structures.
Automatically eligible measures are relevant forinvestors wishing to invest in capital investments
across a range of assets through loans etc. Thismeans that, even if at a single plant level, theemissions reductions are minimal, collectively they
are significant and should be encouraged. This was
the view of the TWG.
Fuel substation including biomass and CCS are
eligible subject to meeting cross-cutting criteria.
However, CCU is outside of scope simply because
the TWG did not have time to robustly discuss it.

In the same way, we believe that some levers
should always be eligible :- Fuel substitution including biomass- CCUSSCM inclusion

86

Definition of clinker wrong, P1

87

Draft background paper (page 23 – SCMs):

SCM – we cannot accept that only calcined clays
and ground limestone are accounted for as
Summary of Cement Criteria Public Consultation - Climate Bonds Initiative

Amended.
Slag and fly ash are eligible for use in cement
production. This has been cleared up.
41

eligible. Slag and fly ashes still have an
important role to play and the near- andmedium-term future.

CCU and CCS

Climate Bonds and the TWG agree with thisviewpoint and as such cement producers using fly
ash and slag to reduce their cement emissions are
not outside of scope. Rather, for the avoidance of
doubt, ‘production of’ these SCMs (i.e., coal energy
and steel production) cannot be part of bondproceeds.

88

As shown above, it is suggested that SCM iseffectively used as an alternative clinker toreduce the clinker ratio, but a composition of
cement varies by national/regional
circumstances. In particular, Japan has to take
into consideration that the Building Codes isstrictly regulated due to an earthquake
countermeasure.

Climate Bonds and the TWG agree with thiscomment, which is why a set clinker factor for
eligible plants is not set.

89

Draft background paper (section 4.4.8 CCU):

CCU is outside of scope simply because the TWG
did not have time to discuss it. It is understood thatthe ‘Utilization’ stage takes place at the concrete
stage and is out of scope for now.

It is not acceptable that CCU and CCS are nottreated equally. The proposed approach does
not incentivise CCU where CCS is not an option.

Future iterations of the Criteria will aim to address
and include CCU, subject to additional criteria.

Recarbonation

90

Carbon capture is one of the key technology for
decarbonisation of concrete sector. So thisshould be included in scope.

This is now within scope.

91

Carbonation:

Recarbonation is not included because it is typicallysmall during the lifetime of structures (2-5%) andcan be large only if the concrete is crushed at theend of life. Neither the real-life expectancy ofbuildings nor the End-of-Life is guaranteed, andtherefore, we chose to exclude carbonation.

Recarbonation should also considered as
eligible, especially mineralisation and enhanced
recarbonation

Municipal
Solid Waste
Fuels

92

There are several issues with the current scopeof the activity:

See response to comment 69.

1. Lack of coherence and alignment with a lowcarbon and climate-resilient economy
Both in the draft criteria and background paper,
CBI states that fuel substitution using “nonorganic fraction of municipal waste streams” or“waste streams stripped of the recyclable
content” as alternative fuels is favoured.
Yet, in Section 2.2 “Alignment with other sector
criteria”, the waste management sector is
missing. It seems that the current CBI criteria forthe cement sector will be a perverse incentive
to promote incineration of waste in cementkilns, which is absolutely the opposite to climate
mitigation.
In many parts of the world, waste is notseparated from its organic fraction, and theinfrastructure to do so does not exist. Even inplaces like California with an advanced recycling
infrastructure, efforts to strip out the organic
component of the waste stream are justbeginning. In India and China, where the vast
majority of cement will be made in the next 3
decades, there is little source separation of theSummary of Cement Criteria Public Consultation - Climate Bonds Initiative

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organic fraction of waste. Local governments
implement waste separate and recycling efforts,
once that waste is headed to a large
combustion unit that must be fed waste to
make its primary product and contracts for fuelare signed, the incentive for recycling theorganic fraction of the waste and removing
recyclable waste is removed. In some local
jurisdictions large capital intensive incinerators
have negotiated “put or pay” contracts. These
contracts force local jurisdictions to deliver acertain amount of waste to the combustion
facility and when that volume is not met, thelocal jurisdiction must pay the combustion
facility. These “put or pay” contracts frustrateefforts at waste reduction and directly
contravene the IPCC 2022 recommendations on
the circularity necessary to meet thegreenhouse gas reduction goals agreed to in the
Paris Agreement.
The CBI's 2019 criteria on Waste Managementclassify “Facility producing electric and/or heat
via the combustion of municipal solid waste OR
mixed residual waste” and “Facility producing
electric and/or heat via gasification of residualmunicipal solid waste” as activities that require
further assessment to determine its eligibility.
However, the EU —through EU Sustainable
Financing Taxonomy— has excluded Waste-ToEnergy incineration from their sustainability
agenda and decided to stop all
financial support for this highly carbon-intensive
process. Given the regulation, CBI decided to
exclude waste incineration from eligibility
criteria within the EU — but open for waste
incineration investment outside of the EU. Thisdecision was despised by one-hundred-andthree civil society organisations from all over
the world in a letter submitted by Zero Waste
Europe.
Despite the strong urge from global
communities to exclude waste incineration fromits eligibility criteria outside the EU —impacting
primarily on countries from the Global South—
CBI has introduced another form of waste
incineration in this draft criteria for the cement
sector. Zero Waste Policy Brief on CBI’s Waste
Management Criteria comprehensively explains
the many reasons why waste incineration is nota solution both for our climate or waste
problems. We urge CBI to exclude fuelsubstitution using the “non-organic fraction ofmunicipal waste streams” or “waste streams
stripped of the recyclable content” asalternative fuels from the scope of the activity.
2. Waste-derived fuels production businessmodel is an unfair business model, demanding
hefty financing supports from the limited local
administratives’ budget
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We recommend CBI to not provide financial
support for “Construction, upgrade andoperation of waste-derived fuels”. This unfair
business model requires local governments tocommit not only in supplying a huge yet steadyamount of waste for years —which should be
prevented, not burnt— but also pay andsubsidise the cement industry in acquiring
waste-derived fuels from municipal solid waste.
One example is the RDF production facility in
Cilacap (Indonesia), where the Cilacap
Environment Agency is financially burdenedwith RDF production costs (operational cost) in
the form of a “cost-sharing” agreement
between the local government and PT. Semen
Bangun Indonesia.39 Almost half of theoperational cost for RDF production is paid by
the Cilacap Regency government. In addition to
the hefty subsidy that the Cilacap Regency
Government provided, the Ministry of Public
Works and Central Java Province government
also required to provide 46% of the capital cost
— or equivalent with USD 2.9 million. Morethan 51% of the project’s capital expenditure iscovered by The Danida ESP3 project contributedin the form of a grant.
Given the already-limited public budget for solid
waste management, these subsidies shouldhave been used to invest in waste prevention,
recycling, and composting projects instead.
Clearly, this kind of business model might not beeasy to be replicated in other places and posehigh financial and environmental risks — thus,
not suitable to be included as part of aconventional bond, much less the green or
climate bonds market.
2. Reinforcement of perverse incentives toincrease waste incineration
We urge CBI to exclude municipal solid waste
utilization as alternative fuels from the cement
criteria. By allowing waste burning in cementkilns, CBI would perpetuate waste burning
practices globally. INTERPOL alerted an alarming
increase in illegal plastic pollution trade acrossthe world since 2018.40 The INTERPOL report
indicates that there has been a considerable
increase over the past two years in illegal waste
shipments, primarily rerouted to South-East
Asia. Under the guise of recycling, plastics havebeen dumped or illegally incinerated in recent
years. Incineration for energy recovery in the
cement industry is not immune to criminality. In
Romania, the cement industry has been
infamous for burning waste illegally imported
from Italian facilities suspected to be managed
by Italian mafia groups. In Ireland, the cement
industry burns an increasing amount of plastic
waste which used to be exported to China.
39 Laporan Assessment: Proses Pengelolaan Sampah Terpadu Refuse-Derived Fuel (RDF) Kabupaten Cilacap (WALHI Jawa Tengah, 2021)
40 https://www.interpol.int/News-and-Events/News/2020/INTERPOL-report-alerts-to-sharp-rise-in-plastic-waste-crime

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After the findings by INTERPOL, International
Pollutant Elimination Network (IPEN) spotted
illegal plastics burning resulting from waste
trade activities in South-East Asian countries.
The report exposed Australia’s massive
investment in pelletized plastic waste
processing which then sent and rebranded as
refuse-derived fuel (RDF) to be burnt inIndonesia, Malaysia, and The Philippines —perversely as clean and renewable energy.41
There are also significant RDF exports from
Malaysia to India and from Indonesia to China.
Thailand exports Solid Recovered Fuel (SRF) to
China, India, Malaysia, and Indonesia. While thebulk of Process Engineered Fuel (PEF) is
exported to cement kilns in the Philippines.
Additionally, Global North countries like the U.S.
and UK are also contributing to this practice bydisguising hard-to-recycle waste as“recyclables”.42
On top of this, another perverse incentive thatencourages plastics burning in cement kilns isplastic credit. Various institutions create
standards that allow waste incineration —in
cement kilns or other industrial boilers— to beaccredited plastic credits. Although these
credits are claimed as an offset for plastic
reduction goals, this practice actually releases
the embedded fossil-carbon in plastics, emitting
carbon through a highly intensive energy
process, and disincentivizing priority measures
like plastics reduction and recycling — which
will save more energy and prevent greenhousegas emissions compared to plastics burning.
Several standards that allow this polluting
practice are Verra’s Plastic Waste Reduction
Standard, Plastic Credit Exchange’s Plastic
Pollution Reduction Standard, and the
Guidelines for Corporate Plastic Stewardship(developed by The 3R Initiative, Environmental
Action, South Pole and Quantis).
3. The scope of activity needs to be redefined toinclude production curtailment
A full 45% of the greenhouse gas emissions
from the industrial sector emanate from
cement production. Unfortunately, cement
production is rising as new cities poke theirhead out of the industrial core in emerging
economies. Absent a dramatic transformation iswhat global societies use as its building
materials, cement will continue to be one of thelargest industrial contributors to climate gases.
Tinkering around the edges using fuelsubstitution will simply not get the reductions
needed from this sector if we are to avoid theworst effects of climate change. Unfortunately,“The cement sector is regarded as a sector
where mitigation options are especially narrow
41 https://ipen.org/sites/default/files/documents/ipen_ntn_rdf_australia-v1_3w-en.pdf
42 https://www.boell.de/en/2019/11/04/waste-exports-rubbish-dump-closed

Summary of Cement Criteria Public Consultation - Climate Bonds Initiative45

according to the IPCC, therefore wholesale
movement into low carbon building materials is
the only path out of the cement industry’s
climate-forcing carbon footprint.”[//report.ipcc.ch/ar6wg3/pdf/IPCC_AR6_WGIII_
FinalDraft_Chapter11.pdf]
By the numbers:“World cement production has increasedaround 20% in the past decade and reached ahigh of 4100 million tonnes in 2019. (It is
expected to continue to rise). The electricalenergy consumed in cement production isapproximately 110 kWh/tonne. Only 30% of theelectrical energy is used for raw material
crushing and grinding while around 40% of thisenergy is consumed for grinding clinker tocement powder. Hence, global cement
production uses 18.7 TWh which isapproximately 2% of the world’s primary energy
consumption and 5% of the total industrial
energy consumption. Furthermore,manufacturing of cement emits 3 Gton CO2,
which is 45% of the industrial sectors CO2
emission. (IEA, 2020).”
Moreover, a simple substitution of fuels will not
solve the threat that the cement industry poses
to humanity, since the majority of greenhousegas emissions from the cement sector comefrom heating the limestone to form pozzolans.
“The decarbonation of limestone to give thecalcium required to form silicates andaluminates in clinker releases roughly 0.53 t
CO2 per ton of clinker. In 2005, cement
production (total cementitious sales including
ordinary Portland cement (OPC) and OPC blends
had an average emission intensity of 0.89 with arange of 0.65–0.92 t CO2 per ton of cementbinder. Therefore, the decarbonation oflimestone contributes about 60% of the carbon
emissions of Portland cement, with theremaining 40% attributed to energy
consumption, most of which is related to clinker
kiln operations; the WWF-Lafarge Conservation
Partnership estimated that the production ofclinker is responsible for over 90% of total
cement production emissions.”
We urge you to redefine the scope of theactivity to reduce emissions from this large
sector and include production curtailment.

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