By Thomas Schulz, Group CEO, FLSmidth (until 2021)
[This article first appeared as an editorial in the financial newspaper Børsen on 7 December, 2019. The original version, in Danish, is available behind a paywall here]
The transition of the cement and mining industries to more sustainable forms of production is critical to solving the challenges of climate change. Over the past twenty years, the global consumption of cement has almost tripled, with cement production currently contributing no less than 7 percent of the world’s total CO2 emissions. Population growth, a growing middle class and increasing urbanisation mean the need for cement will continue to increase for the foreseeable future.
The situation is similar in mining. The green transition is increasing the demand for the metals and minerals needed to produce wind turbines, solar panels, electric vehicles, refrigeration, air conditioning and other electronic equipment. For example, the consumption of copper has increased by 185 percent over the last twenty years. A transition to renewable energy sources is only possible with an increase in mining and a rise in the recycling of minerals. This can be resource intensive in itself – for instance, large quantities of water are required to extract metals and minerals, and water is a highly scarce resource in parts of the world.
In response to this quandary, FLSmidth recently launched our MissionZero ambition, setting out a goal to collaborate with our customers and partners to work towards zero emissions in the two industries by 2030. That means zero C02 emissions from cement factories and zero water waste in mining, to mention just two examples. With MissionZero, we are building upon FLSmidth’s 137-year history of developing more efficient and less energy-demanding solutions.
Collaboration between the public sector, private companies, research organisations and educational institutions will provide the key to developing new and more climate-friendly production methods for materials such as cement.
Necessary investment in research and developmentWith today’s portfolio and our R&D innovation pipeline, FLSmidth can reduce C02 in cement production by 70 percent by 2030, while in mining we can already help customers recycle up to 95% of process water. The remaining 30 percent of the C02 emissions from cement production must be eliminated through the development and co-creation of new technologies.
It is, therefore, very encouraging that the Danish government and a united Parliament recently decided to invest even more in green technology research. It is precisely collaborations between the public sector, private companies, research organisations and educational institutions that will provide the key to developing new and more climate-friendly production methods for necessary materials such as cement. At FLSmidth, we are already well underway on this journey. We are, for instance, working with the Technical University of Denmark and Rockwool on energy-efficient solutions for the construction industry.
Low Carbon Energy is metals intensive
Wind energy is gaining a lot of momentum and there is an expected growth of more than 50% in the coming years, according to the World Banks’s Climate Smart Mining project. To meet this expansion, the industry will require large quantities of raw materials. An “old-fashioned” 3MW turbine consists of, for example, 1,200 tonnes of cement, 335 tonnes of steel, 4.7 tonnes of copper, 3 tonnes of aluminium and 2 tonnes of rare earths, along with a host of other minerals. And as the wind industry expands and wind turbines grow in size and efficiency, so will the need for related minerals.
Similarly, electric vehicles contain advanced electronics and batteries that rely on minerals and metals like copper, lithium and cobalt. Bear in mind that an electric vehicle contains four to five times more copper than a combustion engine vehicle – and that’s before you consider the materials needed for charging stations, grid infrastructure, and so on.
This is why it is imperative that we improve the methods used to produce cement and to operate mines. We owe that to future generations and to the millions of people in countries who aspire to higher standards of living and who demand economic growth, improved infrastructure, access to electricity, better homes, hospitals and other similar benefits. Overall, economic advances are a very positive development but they can also put a strain elsewhere, such as in increased energy and water use. This means that the green transition and climate change initiatives must go hand in hand with our efforts to meet other UN Sustainable Development Goals, such as better health and clean water.
Transforming words into action
We can and must find stability between a green transition and the continued development of higher living conditions for communities around the world. If this can be achieved, it will not only have a positive societal and environmental impact, but the green transition will turn into a competitive advantage for Danish businesses. There does not have to be any contradiction between good common sense and good business sense when we talk climate-friendly solutions; and this win-win is driving a growing interest from long-term investors wishing to invest in and finance green solutions. This will help take us from words to action.
*this article was published in 2019 when Thomas Schulz was CEO at FLSmidth