Energy consumption and CO 2 emissions in China’s cement industry: A perspective from LMDI decomposition analysis Jin-Hua Xu a , Tobias Fleiter b , Wolfgang Eichhammer b , Ying Fan a,n a Center for Energy and Environmental Policy Research, Institute of Policy and Management, Chinese Academy of Sciences, Beijing 100190, China b Fraunhofer Institute for Systems and Innovation Research, Karlsruhe 76139, Germany HIGHLIGHTS c We analyze the energy consumption and CO 2 emissions in China’s cement industry. c The growth of cement output is the most important driving factor. c The efficiency policies and industrial standards significantly narrowed the gap. c Efficiency gains cannot compensate for the huge increase in cement production. c The potentials of energy-saving of 26% and CO 2 mitigation of 33% exist based on BAT. article info Article history: Received 14 February 2012 Accepted 16 August 2012 Available online 7 September 2012 Keywords: Chinese cement industry Energy efficiency CO 2 emission abstract We analyze the change of energy consumption and CO 2 emissions in China’s cement industry and its driving factors over the period 1990–2009 by applying a log-mean Divisia index (LMDI) method. It is based on the typical production process for clinker manufacturing and differentiates among four determining factors: cement output, clinker share, process structure and specific energy consumption per kiln type. The results show that the growth of cement output is the most important factor driving energy consumption up, while clinker share decline, structural shifts mainly drive energy consumption down (similar for CO 2 emissions). These efficiency improvements result from a number of policies which are transforming the entire cement industry towards international best practice including shutting down many older plants and raising the efficiency standards of cement plants. Still, the efficiency gains cannot compensate for the huge increase in cement production resulting from economic growth particularly in the infrastructure and construction sectors. Finally, scenario analysis shows that applying best available technology would result in an additional energy saving potential of 26% and a CO 2 mitigation potential of 33% compared to 2009. & 2012 Elsevier Ltd. All rights reserved. 1. Introduction Currently, China is the largest cement-producing and consuming country in the world. Cement production in China was 1.87 billion metric tonnes in 2010 (CMIIT, 2011), which accounts for about 57% of global cement production (USGS, 2011). The average annual growth from 1990 to 2010 was 11.6%, resulting in a total growth of 790% over this period along with the rapid growth of the Chinese economy characterized by the investment in the construction area (Fig. 1). The cement industry is a highly energy- and CO 2 -intensive industry, and the total energy use of the Chinese cement industry amounted to 4542 PJ (155 Mtce) in 2009, 1 which accounts for about 7.1% of Chinese total final energy consumption and 10.1% of the final energy consumption of the industrial sector (NBS, 2011). Cement produc- tion also results in huge amount of CO 2 emissions from calcina- tions of limestone and fossil fuel combustion. In 2009, CO 2 emissions from cement production amounted to 1073 Mt, which corresponds to 15% of China’s total greenhouse gas emissions (IEA, 2011). More than 80% of CO 2 emissions from the construc- tion of buildings stem from cement production (Habert et al., 2010). Further, the cement industry is considered the largest emission source for particulate matter (PM), accounting for 30% of Contents lists available at SciVerse ScienceDirect journal homepage: www.elsevier.com/locate/enpol Energy Policy 0301-4215/$ - see front matter & 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.enpol.2012.08.038 n Corresponding author. Tel./fax: þ86 10 62542627. E-mail addresses: yfan@casipm.ac.cn, ying_fan@263.net (Y. Fan). 1 One tonne of coal equivalent (tce) equals 29.3 GJ. Throughout this report we will use the units GJ or PJ. Energy Policy 50 (2012) 821–832