Opportunities to Reduce GHGsVia Energy Efficiency: Lessonsfrom AbroadNed Helme, Stacey DavisMark Houdeshelt, Haibing MaCenter for Clean Air PolicyClean Air Act Advisory CommitteeMay 26, 20102Center for Clean Air Policy(CCAP)Washington, CA, NY, Beijing and Brusselsbased environmental think tankCommitted to advancing pragmatic and costeffective climate and air quality policy throughanalysis, dialogue, and educationCCAP’s 30-country climate policy dialogueproduced agreements on emissions trading,design of Clean Development Mechanism;now focused on new climate treaty3Center for Clean Air Policy(CCAP)Working with key developing countries (China, India,Brazil, Mexico) and U.S. states to design climatepolicies»Sectors: electricity, cement,iron & steel, aluminum, oil (Mex)Completing major study for EC on sectoralapproaches to reducing emissions from these sectorsOriginal consultant on design of EU CO2emissionstrading program and MRV systemRunning multi-stakeholder dialogues in the U.S. andthe EU to build agreement on elements of a nationalclimate policy package and EU strategyHelp Members of Congress and governmentsworldwide consider and design policies4Presentation OverviewReview mitigation actions identified forenergy intensive industry sectors in Mexicoand China and discuss applicability to theUS BACT context.Review carbon intensity benchmarksdeveloped in Europe and applicability to theUS BACT context.Draw preliminary lessons and identify somenext steps.5Context for Mitigation Actions Identifiedthrough Developing Country Sectoral StudiesDevelopment of baselines & mitigation cost curves toinform future commitments in key industrial sectors.»Not source-specificSeeking to inform how many reductions can be doneunilaterally, which ones might qualify for internationalsupport, and which ones might earn offset credit.Also informing development of Nationally AppropriateMitigation Actions, including design of cost-effectivepolicy approaches.Bottom-up analyses looked at specific technologies.6Caveats on Sectoral Study(Cement)China studyContains “off-the-shelf” efficiency measures, but does not pushthe envelope on innovative technologies.Study does not reflect differenceswithin industry sectors; a largenumber of SMEs with much lowertechnology level significantlydrag down the sector-wide energy efficiency.Data quality not verified; datacollection methods may differ dueto capacity limits.Mexico studyCement study is based on data from CEMEX, which ownsrelatively clean installations.»Actual reduction potential could be greater than indicated.For energy/electricity use and blending, had data on individualinstallations for one year. All Mx kilns are dry kilns.7Relative Efficiency of CementIndustry in Select Countries4.44.64.53.53.72.900.511.522.533.544.55World Average USChinaMexicoBrazilJapan2004 Energy Consumption per Tonne of Clinker (GJ)Source: IEA. 2008. Worldwide Trends in Energy Use and EfficiencyUS cement sector is on par with China, less efficient than Mexico.8Cement Sector: CCAP Analysis ofMitigation Options (China, 2015)No.MeasuresMarginalmitigationcost ($/tCO2)TotalEmissionReduction(Mt CO2)1 Process control systems -5.2 25.12 Use of waste fuels(d) -4.6 34.83 Blended cement -3.4 54.34 Kiln shell heat loss reduction(d) -2.2 11.65 Kiln shell heat loss reduction(w) -1.5 06 Optimize heat recovery(grate cooler)(d) -0.8 7.77 Optimize heat recovery(grate cooler)(w) 0 08 High-efficiency motors 0.8 2.49 Conversion to grate cooler(w) 1.6 0.110 Conversion to semi-wet process(w) 2.4 0.39Cement Sector: CCAP Analysis ofMitigation Options (China, 2015)No.MeasuresMarginalmitigationcost ($/tCO2)TotalEmissionReduction(Mt CO2)11Conversion to grate cooler(d)3.2 24.712Kiln combustion systems(w)4 0.113Kiln combustion systems(d)4.8 13.314Conversion to PH/PC-kiln(d)5.1 19.815Conversion to pre-calciner kiln(d)5.4 6.116 Conversion to multi-stage preheating(d) 5.7 13.717Conversion to precalciner kiln(w)6.3 0.718Roller press/Horomill6.9 10.919Variable speed drives7.5 4.220Low pressure-drop cyclones(d)8.1 1.110Cement Sector: CCAP Analysis ofMitigation Options (China, 2015)No.MeasuresMarginalmitigationcost ($/tCO2)TotalEmissionReduction(Mt CO2)21 Heat recovery for power generation(d) 8.7 5.622 High efficiency roller mills(d) 9.2 5.523 High-pressure roller press 10.3 3.224 Improved grinding media 11.3 0.825 High efficiency classifiers(final) 12.3 1.226 High efficiency classifiers(d) 13.3 2.127 Mechanical transport systems(w) 15.2 028 Mechanical transport system(d) 17.1 1.629 Raw meal blending system(d) 19.3 0.830 Use of waste fuels(w) 21.7 011China Cement Cost Curve (2015)12Cement Sector: CCAP Analysis ofMitigation Options (Mexico)EmissionsReduction PotentialsEmissionsReduxReduxEmissionsIntensityNo.2020 ScenarioMtCO2MtCO2%tCO2 /t cement0Baseline (BAU)41.630.000.0%0.7371Max. EE = 3 GJ/t clinker39.542.095.0%0.7002Blending = 72.3%37.873.769.0%0.6713Buy RE electricity/offsets38.153.488.4%0.6764Alt fuels (tires) = 30%41.050.581.4%0.7275Alt fuels (MSW) = 30%39.172.465.9%0.6946Alt fuels (sludge) = 30%36.974.6611.2%0.6557Electricity Intensity = 80KWh/t cement40.521.112.7%0.71813Feedback from CANACEMEnergy Efficiency:»Can’t physically retrofit to this efficiency»Specific conditions prevent some upgrades»Implementation cost is very high ($1.9 billion)Blending:»Inexpensive way to reduce emissions»Need new NOMs for cement and market support to ensure demand»Slag/fly ash supplies limited but pozzolans prevalent in some areas»Cost may be underestimated and implementation scenario is unrealisticPurchase of Renewable Electricity:»Cement sector shouldn’t be responsible for indirect emissionsAlternative Fuels:»Very promising option (MSW and sludge have high biomass content)»barriers are significantElectricity intensity:»Mitigation scenario is infeasible14Promising Cement Sector MitigationOptions –Conclusions (Mexico)Cement blendingBarriers include market limits (supply of blending materials?)Full implementation cost could be much higher than original estimate(more than $600 million (2012 USD) over 20 years)Use of alternative fuelsPrimary barriers are legal/regulatory + fuel processing costsFull implementation cost dependsupon choice of alternative fuel andrelative prices of alternative fuel vs. petcokeReplacement of fossil-fuel electricity with renewable electricity built bycement industry (expanded cement sector boundary)Depends on how the power sector isincluded in mitigation efforts15Thoughts on Applicability of CementSector Analysis for the United StatesMany specific efficiency measures have been identified, some ata low cost per ton.»This is particularly the case for China, which has efficiency levelscloser to the U.S.Focusing on just efficiency leaves a lot on the table.Efficiency measures at existing plants may require high up frontinvestment (and for cement, long paybacks).»How is payback considered in BACT cost analysis?Efficiency improvements can be applied more easily to newunits than to existing units.Cement blending a good option in Mexico/China, but may notreduce emissions from cement plants in the U.S. as blendingoccurs closer to point of use.16Context for EuropeanBenchmarkingUnder Phase III of EUETS, allowance allocations to carbonintensive, trade-exposed industries/products are based onbenchmarks.»Benchmarks set at the average of the top 10%for a given productcategory, regardless of the process type or fuel.»Benchmarks reflect the combination of processes/fuels/ efficiencymeasures in place at top-performing units, without regard to cost.Sources may purchase allowancesor offsets to cover annualemissions in excess of theirannual allocations – system doesnot set binding unit-specific standardsLimited detail available on specific technologies and efficiencymeasures at top performing units – competitive concernsBased on unit-specific emissions and output data.17Sector Definition –Proposed CementSector Benchmark Based on ClinkerPractical difficulties in setting a cementbenchmark, in particular:»Cement benchmarking cannot be applied toindividual installations due to the trade of clinkerbetween installations including trade with grindingstations.»With cement benchmarking, it becomes necessaryto account for the differentiated availability ofclinker substitutes and quality differences betweenblended cements.18European Benchmarking of theCement Industry



# }Approx. benchmark: 780 kg CO2/t clinkerUS average = 934 kg CO2/ton19Benchmarking Implementation•Average performance of 10% most efficientinstallations in (sub)sector calculated for products.•50-57 benchmarks under developmentfor 19 sectors,35-41 benchmarks being based on benchmark curves,remainder based on best available technology &samples.•EU considering “innovation accelerator” to encouragelaggards to make large EE improvements•Benchmark curves cover ~80% of the emissions.•Consultative and transparent process. For proposedbenchmarks and related documents see:http://ec.europa.eu/environment/climat/emission/benchmarking en htm20European BenchmarksAluminumCementCeramicsChemicalsGlassGypsumIron & SteelIron OreLimeMineral WoolNon-ferrous metalsPulp & PaperRefiningHeat productionbenchmark(for combustion of fuel forproduction of hotwater/steam)Fuel mix benchmark(where the heat produced isnot measured--furnaces)21Thoughts on Applicability of EuropeanBenchmark for United States BACTEuropeNo separate data ontechnologies used in topperforming plants(competitive concerns).»Benchmark factors inprocess, fuels & efficiency.One benchmark covers allfacilities producing a givenproduct.»Costs and regional/sourcespecific issues notconsidered.»Sources can always buyallowances/offsets.United States BACTData on individualtechnologies generally usedto define BACT.»Could developstandards/benchmarksreflecting actual availabletechnology combinations.Standard is source-specific,considering energy,environmental & other costs.»NSPS, if any, provides floor.»No precedent forcompliance via offsets, butpossible?22Next StepsWhat is the boundary for BACT analysis?»Include blending?»Include indirect emissions?»For an existing source, include the whole source, or just thenarrow modification?Can benchmarks be used to define BACT?»Is there precedent for a broader performance std approach?Via NSPS floor?»What are the pros/cons for new/existing sourcemodifications?»Legal justification for use of offsets?»Is there any opportunity for building in EE incentives?