A new procurement challenge for the cement industry

1. What challenges does the cement industry encounter when trying to align the technology suppliers for carbon capture?

The cement industry is a very mature one with a simple operational procurement model. Cement manufacturing companies are used to working with established cement technology providers and usually getting a fixed price for a greenfield turnkey plant or for brownfield revamp initiatives. Carbon capture introduces new types of project development models along with varying supplier profiles where the majority of the technology providers come from the legacy oil and gas industries. So, the cement players face the need to understand how the carbon capture technology market works while adapting their ways of procuring new equipment and processing plants to those of the oil and gas industries.

2. Does the fact that carbon capture technology is still evolving for cement manufacturing create additional procurement issues?

Although there are proven carbon capture technologies available, they have not been used much outside of the oil and gas industries, and implementing carbon capture technology at a cement plant is complex, carrying new risks for the cement producers. This risk can emerge as a financial one, as the suppliers can increase the level of engineering to de-risk themselves, resulting in an additional cost for the cement producers. As the suppliers have yet to sell many capture plants, it is too early to expect well-designed modular solutions of various capacities at this stage. Without the modularisation and standardisation of the capture plants, each capture project is customised, which can increase the implementation risks and costs. On the other hand, it can also be argued that while more modular and standardised plants could create more mature plug and play solutions, customisation can result in better integration into an existing cement plant and result in optimal CAPEX and OPEX decisions. A balanced approach between modular systems and the right level of customisation potentially results in best practice in terms of minimising the financial risks and enhancing the capture plant efficiency.

3. Does this market immaturity create challenges when trying to secure long-term maintenance of the carbon capture technology at cement plants?

Certainly! A carbon capture plant operates in a similar way to a chemical manufacturing plant, whereas a cement plant is an entirely different and very lean operation. At cement plants, many of the processes are automated, meaning that a small number of on-site staff can keep such a plant operating effectively. The addition of a carbon capture plant means new resources are needed or extensive training needs to be given to existing staff members to handle the very different safety standards associated with working with chemicals.