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VC Brasil
We made progress toward our 2030 decarbonization targets with an increase in the use of alternative fuels and new materials to replace clinker in cement production, and investments in renewable energy
We emitted, globally, 556 kg of CO2 per tonne of cement produced, 4% less than in 2022. Our 2030 decarbonization target, approved by the Science Based Target initiative (SBTi), is 475 kg of CO2 per tonne of cement. Between 1990 and 2023, we reduced CO2 emissions per tonne of cement produced by 27%.
Our decarbonization strategy is based on four main pillars: co-processing (the substitution of fossil fuel with other materials, especially biomass and waste, in cement production kilns); the use of cementitious materials (by-products from other industries) to replace clinker, the primary source of CO2 emissions in the cement production process; energy efficiency and use of renewable energy sources, through company-owned hydroelectric power plants and investments in solar and wind energy; and the development of technologies and use of innovative processes, new materials, carbon capture, gains in efficiency in the cement and concrete value chain, and partnerships with various organizations and academia to increasingly optimize resources and continue reducing carbon intensity.
In 2023, our global thermal substitution rate through coprocessing was 31%. This result reflects investments to modernize plants and the use of new sources of alternative fuels, mainly waste and biomass, to replace fossil fuels in cement production kilns. In 2022, we achieved a thermal substitution rate of 26.5% and our goal is to reach 53% by 2030.
Our clinker factor went from 73.9% in 2022 to 72.8% in 2023, which also contributed to reduce emissions (lower use of clinker in cement). Our goal for 2030 is to achieve a clinker factor of 68% by increasing the use of alternative raw materials, in line with the concept of a circular economy. Clinker, the main component in cement, is obtained by burning limestone and other raw materials in high-temperature kilns. It is at this stage of production that the largest percentage of direct CO2 emissions occurs. Therefore, the lower the clinker factor, the lower the emissions.
In 2023, 35.1% of the electricity consumed by our company came from renewable sources, compared to 22.9% in 2022. This increase is the result of the implementation of the Ventos do Piauí project in Brazil and the use of wind energy in Spain. Our goal is to have 45% of the energy consumed globally come from renewable sources by 2030.
“The most competitive and sustainable companies will be those with the lowest greenhouse gas emissions. In all countries where we operate, we are committed to advancing in our decarbonization journey, in line with our goal of producing carbon-neutral concrete by 2050,” said Álvaro Lorenz, our global director of Sustainability, Institutional Relations, Product Development, Engineering and Energy.
Concrete is the second-most consumed material in the world, after water, and is essential for infrastructure, housing, quality of life and the well-being of society. Produced from cement, it is an abundant and accessible material with countless applications, in addition to having important qualities such as resistance, durability, safety and resilience.
Decarbonization Journey
In February 2024, we received, for the first time, an A score in the assessment of corporate transparency and climate change performance by CDP, one of the most respected global non-profit organizations that runs a global system for companies, cities, states and regions to disclose their environmental impacts. Based on data reported through the CDP Climate Change 2023 Questionnaire, we earned an A score, placing our company among a small number of organizations that are ranked at the top of the list and exemplify best practices in the market.
Additionally, we were once again recognized by Sustainalytics as the only Top-Rated Industry company in the building materials sector in Latin America, based on an assessment of our 2023 ESG performance.
Investments
In January, we announced a R$5 billion investment in a comprehensive growth and structural competitiveness program involving our company’s operations in Brazil. Of this total, R$1.5 billion has already been invested as part of the program, which includes structural investments in our company operations in all regions of the country, to increase competitiveness and co-processing capacity and significantly reduce CO2 emissions. Through these investments, we will add 3 million tonnes of cement per year to our production capacity in Brazil.
A project is also underway at the Salto de Pirapora (SP) site to increase the rate of thermal substitution/co-processing and reduce CO2 emissions. The project is expected to be completed by 2028. To finance it, we were the first Brazilian cement company to sign a financing agreement with the International Finance Corporation (IFC), a member of the World Bank Group, linked to sustainability indicators. In line with our sustainable growth strategy, we have been issuing and contracting debt linked to sustainability indicators since 2019. In total, we have already carried out more than 10 transactions involving these types of financing instruments.
In the beginning of the year, we signed an agreement to build a solar energy complex in the town of Paracatu (MG), with an estimated 470 MWp installed capacity allocated to the company. This transaction includes power purchase agreements, scheduled to start in 2026, to supply 100 MWm of solar energy over 15 years to help power our production sites in Brazil.