NATIONAL CLIMATE CHANGE RESPONSE GREEN PAPER 2010 Parliamentary Portfolio Committee on Water and Environmental Affairs 16 TH March 2011 Dr Dhiraj Rama

CONTENTS Introduction ACMP Presentation Overview Cement Sector Case Study Recommendations Conclusions

INTRODUCTION: Who are the ACMP? The ACMP acts as an umbrella body for six South African clinker and cementitious material producer companies, specifically guiding and representing their interests in the fields of environmental stewardship, health and safety practices, and community and stakeholder interaction The ACMP’s member companies include:  AfriSam:  Lafarge South Africa:  NPC-CIMPOR:  Pretoria Portland Cement Company Ltd:  Cemlock(Gauteng) Pty Ltd  I.D.M. Cement (Pty) Ltd):

OVERVIEW Principles of the Green Paper supported by the ACMP The ACMP are in support of a sectoral approach to climate change BUT The cement sector do face challenge in implementing their climate change strategies. The aim of this presentation is : Firstly, to provide an overview of the cement industry and historic GHG mitigation Secondly to highlight challenges to GHG reduction and provide recommendations on how they may be overcome

SECTORAL APPROACH A CASE STUDY CEMENT SECTOR GHG Emissions Electricity Limestone: 50% Material Handling e.g. transport from quarry to factory Coal: 35% Extenders AFR EE: Energy efficiency Transport DEPENDENCY Rail freight EE: finance & technology Extenders: Waste definition: unintended consequence of waste definition Regulatory decision making: Thermal policy OPPORTUNITIES RISKS:  INFRASTRUCTURE PROJECTS  JOBS VS IMPORTS Target setting Rational approach Production cut CHALLENGES GHG MITIGATION OPPORTUNTY GHG MITIGATION ALREADY IMPLEMENTED

Recommendation 1 Targets vs. Benchmarks

GHG emission trends: Recognition of previous and current effort Less limestone (extenders used) Less coal Less electricity

Recommendation 2 Remove legislative barriers that are counter- productive to GHG reduction

BARRIERS: Legislation: E.g. Waste Act Waste definition: unintended consequences: A number of materials conventionally used internationally and locally with consequences to GHG emission reduction now potentially and intriguingly renders cement as waste in RSA due to unclear definitions in the Waste Act, International and local business risk: cement classified as waste Discourages use of slags / fly ash / boiler ash/ synthetic gypsum etc resources: main contributors to GHG mitigation Waste definition must be reviewed urgently: Role of Government to ensure appropriate supply chains to manage efficient response to climate change commitment

BARRIERS: Regulatory delay: Eg. Waste Tyre Regulations 13 February 2009 : Waste Tyre Regulations -13 February 2009 (GN149). 24 July 2009 : Department’s high temperature thermal treatment policy -24 July th April 2010 : Tyre waste management plan - 5 th April to date not been approved March 2011: status unknown. This example clearly demonstrates the role of Government to ensure appropriate supply chains to manage efficient response to climate change Consequence:.   the unnecessary use of coal, a rapidly depleting resource:   The cement producers unable to avoid CO 2 emissions attributed to coal. Approximately 13 million waste tyres generated annually (=225,000 tons ).   Implementation would have   promoted sustainable development principles (reduce use of natural resources)   avoided adverse impact on ambient air quality through burning of tyres and consequences to public health   Further example of delays is the lengthy period required by authorities to authorize the EIA’s for co-processing of AFR and the issuing of waste licenses

Recommendation 3 Addressing the rail transport inefficiencies

RAIL TRANSPORT Role of Government to ensure appropriate supply chains to manage efficient response to climate change commitment to transport of goods by rail Road freight: key contributor to GHG emission   Many businesses rely on road freight due to its access and reliability   Establish an efficient sustainable rail network Sectoral approach required:   Eg. Cement producers: the specific needs regarding both infrastructure and service level agreements will have a significant positive impact on managing its carbon footprint.

Recommendation 4 Economic instruments for a low carbon economy

CARBON PRICING Carbon pricing: Establishing a realistic price on carbon is a key factor to cost effective climate action Accurately price carbon: Encourage the pro-active adoption of low carbon technologies Carbon revenue: Focus the funds generated by a carbon price on the mitigation of carbon emissions Recognition of previous and current effort Signatory to the Energy Accord Use of alternate fuels

CARBON PRICING AND ECONOMIC INSTRUMENTS Benchmarking economic instruments: Socio-economic impact assessment: BRIC countries Energy mix Economic growth goals and targets Efficacy of incentives vs taxes Carbon tax at present is not a good solution as it would severely impact on the cost of doing business with consequences to the public use of a combination of different economic interventions Benchmarking emissions: absolute vs specific values Discount objectively the notion that major policy and action plans to address energy intensity would not suffice before confirming the carbon tax approach

RECOMMENDATION 5 White Paper

WHITE PAPER ACMP SUPPORT DEVELOPMENT OF THE WHITE PAPER Governance framework Ensure progress towards implementation: Eg. National Strategy on Sustainable development Government actions/governance mechanisms: Enhance efficient regulatory processes: Examples: Efficient permitting, compliance monitoring and enforcement of legislations such as the Air Quality Act and the Water Act. Improving capacity and capability of the government Departments to ensure efficient service delivery. Many actions described in the Green Paper are already related to current regulatory requirements (example Water use and discharge; agriculture management, etc). The format be amended to deal with matters thematically: Ensures an accurate reflection of the processes already in place in South Africa. Identifies policies and programs that are already in place, but require improved implementation or mainstreaming climate change response during implementation National strategy on sustainable development: Must be referred to and referenced. Catalyze alignment of the different polices, programs and plans in the country and must be a key outcome of the review processes reflected in the Green paper Management of risk: Avoid unintended consequences: Socio economic state of RSA Trade barriers

CONCLUSION In light of the government commitments, the ACMP endeavours to support the national initiatives to enable the country to reach the targets set, namely 34% by 2020 and 42% by 2025 Avoid unintended consequences: greenhouse gas reduction strategy does not compromise South Africa’s competitiveness and employment conditions While focusing on these targets, adaptation strategies need to be addressed by mainstreaming it in all key government departmental policies, plans and programs Address trade barriers