[Report] Half of R&D Invested in 'Green Technology'... Visiting the German Factory with 100% Alternative Fuel

[Cement Industry, Looking 30 Years Ahead]
① German Polysius Phoenix Plant
Emphasizing the Importance of Maintaining Alternative Fuel Quality
Challenges in Investment Costs for Eco-friendly Facilities and R&D

Editor's NoteThe cement manufacturing industry plays a crucial role in the construction sector. However, it is also a major contributor to global greenhouse gas emissions, accounting for 7% worldwide. With the government setting a goal to achieve carbon neutrality (Net Zero) by 2050, the domestic cement industry must tackle the dual challenges of reducing greenhouse gas emissions and improving performance. Additionally, the industry faces complex conflicts. Environmental groups opposing the use of alternative fuels such as waste in cement production label it as 'garbage cement,' hindering progress, while disputes with incinerator companies over waste disposal methods persist. Although investing in eco-friendly facilities requires enormous costs, the ready-mixed concrete industry strongly opposes cement price hikes, and a delivery price linkage system will be implemented starting this October. To explore the eco-friendly cement production sites and ESG (Environmental, Social, and Governance) management strategies in Europe, which is about 30 years ahead of Korea, we visited the sites from the 20th to the 27th in collaboration with the Korea Cement Association.

"We use 100% alternative fuels. The coal storage is no longer in use."

Europe is the birthplace of the cement industry. It has long been moving away from the image of a smokestack industry toward becoming an eco-friendly sector. At the center of this transformation is Germany. The German cement industry leads the world in recycling circular resources. Instead of bituminous coal, the main culprit of carbon emissions, various wastes are burned to produce cement. Alternative fuels account for 69% of the total fuel used, compared to about 35% in Korea. Industrial and household waste are used as fuel to make cement. On the 22nd (local time), we visited the Phoenix plant of ThyssenKrupp Polysius in Germany, which is leading the carbon-neutral era. A representative from the Phoenix plant pointed to a facility previously used as a coal storage and said, "We use 100% alternative fuels," adding, "That coal storage is no longer used."

◆Leading Decarbonization Company, Polysius = Founded in 1859, Polysius has expanded to 28 countries worldwide and has experience building over 800 cement plants. It employs about 3,800 people, 70% of whom are engineers and technicians. Half of its research and development (R&D) budget is invested in green technology. In particular, 5-10% of its annual sales revenue is spent on developing alternative fuel technologies. Polysius also has a strong connection with Korea, having been responsible for establishing major cement company plant facilities during the early days of Korea's cement industry in the 1950s and 1960s.

The Phoenix plant built by Polysius is located in Beckum, a small to medium-sized city about a four-hour drive from Frankfurt, Germany. It has been operating since 1914 and produces 500,000 tons of cement annually. The scale of the Phoenix plant differs from Korean cement plants. Korean plants have more production lines and much larger facilities. For example, Ssangyong C&E's Donghae plant produces 11.5 million tons of cement annually. Due to differences in plant size and production volume, it seems challenging to directly benchmark Germany's production process.

Regarding this, Luke Rudosky, Head of Innovation & Research at Polysius, said, "(In Korea's case) the biggest challenge is not the plant equipment or mechanical issues but the quality control of alternative fuels." He explained that when using alternative fuels, maintaining stable thermal efficiency comparable to bituminous coal is essential to avoid defects in the finished cement product. He added, "The Phoenix plant sources waste materials for alternative fuels from seven different suppliers," emphasizing that "maintaining consistent quality of alternative fuels is key."

◆Waste Treatment at High Temperatures "This is Our Competitiveness" = The Phoenix plant has been producing cement using various wastes since the 1990s. The annual waste usage is 65,000 tons. We entered the waste storage area, where the waste was finely processed to the point that its original form was unrecognizable, giving it a crumbly texture. The finer and more uniform the particles, the better the thermal efficiency. While greenhouse gases are emitted during waste landfill and incineration, using waste as fuel instead of fossil fuel bituminous coal in cement production can reduce the total national greenhouse gas emissions.

However, in Korea, the cement industry and incineration industry are engaged in a 'turf war' over waste disposal. The cement industry insists on using waste as alternative fuel, while incineration companies struggle to prevent losing business to cement companies. When asked if similar conflicts exist in Germany, a Phoenix plant representative said, "The cement kiln operates at a high temperature of 1450℃ for 10 minutes, achieving complete combustion that significantly reduces harmful substances like dioxins," adding, "This is our competitive edge." Compared to waste incinerators that operate at 850-1100℃ and produce incomplete combustion byproducts, the Phoenix plant greatly reduces harmful emissions. The plant also complies with the same carbon emission standards applied to waste incineration facilities and is equipped with Selective Catalytic Reduction (SCR) systems to reduce nitrogen oxides.

◆"Cement is a Public Good... There is Capacity to Pay Higher Prices" = The issue is cost. To fully utilize alternative fuels like the Phoenix plant, investments in carbon reduction facilities, R&D, and waste procurement are inevitable. Rudosky believes that cement price increases are unavoidable. He stated, "Cement is one of the most widely consumed materials worldwide and has characteristics similar to a public good," adding, "I think there is some capacity to pay higher prices. If prices rise, government subsidy policies can also play an important role."

Although it is time for cement companies to actively invest in eco-friendly initiatives, securing the necessary resources is not easy. Looking at the performance of the seven major companies responsible for over 90% of domestic cement production last year, sales increased by 19% year-on-year to 5.25 trillion KRW, but operating profit decreased by about 12% to 406 billion KRW. Net profit also fell by 20% during the same period.

This content was produced with the assistance of AI translation services.