High energy prices, challenges in CBAM enforcement and promotion of lead markets, and rising carbon costs are impacting competitiveness against non-EU producers.
The cement industry is crucial to Europe’s construction value chain, accounting for about 9% of the EU’s GDP. Its production processes contribute to 4% of EU emissions and are investing in measures to achieve climate neutrality by 2050, aligning with the European Green Deal.
Marcel Cobuz, CEO of TITAN Group, noted the need for a long-term view to keep the EU cement industry competitive domestically and to maintain export market shares.
However, compliance with EU regulations and other factors make the industry less competitive than carbon-intensive producers outside Europe. Cement Europe stated that without a competitive business model, the cement industry’s viability and decarbonization prospects are at risk.
Marcel Cobuz emphasized the necessity for a clear policy partnership with Brussels to establish a predictable regulatory and financing framework to match decarbonization ambitions and investment efforts for long-term competitiveness.
POLITICO Studio: Why is the cement industry important to the EU economy?
Marcel Cobuz: Cement is vital for building homes, hospitals, transportation, and energy infrastructure. It supports communities with high-quality jobs and is integral to the construction industry, employing 14.5 million people in the EU. Cement manufacturers from nine countries compete internationally.
PS: What differentiates Titan within the industry?
MC: With strong European roots, we operate in 10 European countries. Sustainability is key, and we aim to decarbonize profitably. We’ve reduced our CO2 footprint by nearly 25% since 1990 and aim for a similar reduction by 2030. We use low-carbon energy, raw materials, and advanced technologies.
We are exploring building one of Europe’s largest carbon capture projects with support from the Innovation Fund, capturing two million tons of CO2 and producing three million tons of zero-carbon cement. We also partner with startups to produce low or zero-carbon materials, benefitting the entire industry.
PS: What are the main challenges for the EU cement industry today?
MC: High energy prices make the industry less competitive. Energy constitutes 60% of costs, and prices are two to three times higher than in neighboring regions. Regulatory complexity and compliance costs are high, with the ETS cost estimated at €97-€162 billion from 2023-2034. Low uptake of low-carbon products poses investment risks in new decarbonization technologies.
The playing field is uneven; EU cement imports increased by 500% since 2016, and exports halved, losing one billion euros in value. The industry is reducing manufacturing costs, replacing fossil fuels, and digitalizing operations, but friendly policies and regulatory predictability are needed.
PS: Will the full implementation of CBAM in 2026 help level the playing field?
MC: CBAM can help manage increasing carbon costs but faces challenges. Importers self-declare their carbon footprint, risking errors. Effective audits and cooperation with authorities are necessary to ensure accurate data. CBAM should not apply to EU exports, as carbon costs reduce competitiveness in longstanding markets.
PS: How can the EU support the European cement industry’s competitiveness?
MC: By simplifying legislation to enable long-term investment planning. The ETS revamp should maintain competitiveness and export market shares. Policies funding decarbonization should accelerate carbon capture projects and promote low-carbon products.
PS: Are you optimistic about the future of your industry in Europe?
MC: Current CO2 rights phase-out and CBAM’s effectiveness, combined with high energy prices and investment costs, pose existential risks. However, I’m optimistic that collaboration with the European Commission can ensure the industry’s viability, benefiting Europe with more jobs and sustainable infrastructure.
Disclaimer
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- The sponsor is Titan Group
- The advertisement is linked to policy advocacy around industrial competitiveness, carbon pricing, and decarbonization in the EU cement and construction sectors, including the EU’s CBAM legislation, the Green Deal, and ETS revision.
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