At a series of industry webinars in late 2020, we asked participants about their status on alternative fuel. The webinars saw a global and a regional Asian/Pacific (APAC) audience. The responses reveal an interesting trend when comparing the general, global interest and expectations to alternative fuel use with that of their APAC peers.
Are Asian countries about to catch up on fuel substitution?
On the opening question; ‘What is your current rate of fuel substitution?’ One quarter of the global cement professionals responded, ‘Less the 20%’. On the same question, more than three quarters of their APAC colleagues responded the same.
However, looking ahead five years, on what is the ‘desired’ substitution rate, we see a dramatic increase among the APAC producers, now;
- 50% would like to be in the 20-40% bracket
- 26% would like to be in the 40-60% bracket
- 13% would like to be in the ‘greater than 80%’
Clearly, the topic of alternative fuels is expected to get more and more attention in the region as waste handling and logistics mature.
In a recent analysis of the global alternative fuels adoption in cement, FLSmidth pyro experts Mads Nielsen and Robert Krist concluded that countries such as South Korea and Japan have taken the lead in the region, with adoption rates similar to Europe. This is causing a second-wave of alternative fuel adoption as places move towards 100% substitution rates.
In November last year, Korean Sungshin Cement announced the purchase of two, new HOTDISC Combustion Devices to their kiln lines 3 and 6 to be delivered in 2021 - the first is expected to be commissioned in mid-2021 and the second at the end of 2021. After a recent installation at SsangYong’s Yeongwol and Donghae plants this will be HOTDISC number 3 and 4 on the Korean peninsula.
Great variation in adoption across the region
Although there is no lack of available alternative fuels, China for instance, has traditionally had a relatively low substitution rate. However, driven by acute concerns over air quality and waste disposal in many Chinese cities, the Chinese government now pays much more attention to sustainability issues and the transition has picked up pace. For example, cement companies that burn municipal waste as an alternative fuel are not subject to the same stringent production limits (brought in by the government to tackle overcapacity in the industry) as plants that use only fossil fuels.
India meanwhile is treading its own path
New regulations to deal with the growing waste problem in India now compel cement companies to use refuse-derived fuels for at least 5% of their fuel requirements. In a measure that appears to be all stick and no carrot, cement companies are responsible for bearing the cost of these regulations: there are, for example, no gate fees payable to cement companies to offset investment in alternative fuel handling equipment
This regulatory-driven approach has resulted in a focus on low-cost systems for alternative fuels handling systems, mostly from local Indian suppliers.
Indian cement producer, Dalmia, has previously announced their commitment to achieving 100% substitution rates by 2030. To realize the ambition, the equipment and design of Dalmia Cement’s new line at Rajgangpur was specifically curated to maximise the potential for alternative fuels.
In a recent article on the outlooks for 2021, Ramanathan Chandran, Managing Director for FLSmidth in India, reported; “We see new regulations on waste-to-energy and handling of waste, offering a massive opportunity for the cement industry.”
The FLSmidth Alternative Fuels Team together with regional sales people are monitoring new regulation and local initiatives to best support cement producers in the regional.