The IAA covers energy-intensive industries and refers to the cement industry as a high emission intensity sector with a strategic role for the clean transition. In this context, Cement Europe welcomes the IAA as it addresses the development of lead markets for low carbon products. Through its Net Zero Roadmap and the Cement Action Plan, the European cement industry has strongly emphasised the need for policy levers that facilitate the uptake of low carbon products as a necessary complement to the policy drivers that incentivise the decarbonisation of the manufacturing process.

Cement Europe would like to bring to the attention of the co-legislators two main issues to be addressed in the upcoming discussions on the IAA:

Lack of clarity on the scope and definition of low carbon products

Where cement is publicly procured, its place in Annex II IAA (low carbon and EU origin requirements) needs clarification. The scope should be “concrete, mortar and cement, including the clinker used to produce them, intended for use in buildings and infrastructure .”

The inclusion of cement within the scope is in line with the IAA’s objective to create lead markets for cement. In the IAA impact assessment, it is stated that the significant share (31%) of public procurement in the overall European cement market “underscores the public sector’s leverage in securing the offtake of low-carbon cement in construction and infrastructure, driving broader market transformation within the cement industry ”. It is exactly this link with the industry’s transformation that justifies the inclusion of cement within the scope and the setting of cement-specific thresholds. The threshold should be set at a level which allows the generation of financial leverage for capital intensive decarbonisation projects while at the same time, allowing a robust uptake level of low carbon products.

Starting from the assessment made in the Commission’s Impact Assessment which focuses on FID projects for low carbon cements by 2030 (Carbon Capture and Storge (CCS) (mainly) and Secondary Cementitious Materials (SCM) projects) representing 1% of EU overall production, Cement Europe considers the following threshold relevant for the upcoming discussions. The low carbon categories are based on the banding system set out in Annex.

• 25% of cement used in public procurement shall be low carbon by 2029, ranging from Near Zero to band C (see table in annex) whereby the Near Zero products would count double towards that target. Member States have the flexibility to include band D under the conditions referred to in Article 11(3) IAA. Targets should be updated progressively, at least every five years, based on technological progress and product availability.

Where concrete is publicly procured or in cases where cement and SCMs are added separately by concrete manufacturers during production, Cement Europe supports a methodology that allows for a consistent approach between cement and concrete.

Definition of EU origin

The definition of EU origin as encompassing third countries with which the EU has free trade agreements or a customs union and countries that are partners to the “Agreement on Government Procurement”, extends the EU origin far beyond the EU 27. Such extensive definition is contrary to the IAA’s objective of boosting the EU’s industrial competitiveness. It also ignores the need to strengthen and reinforce the EU internal market which is the cornerstone of Europe’s economic and social prosperity.

Therefore, Cement Europe suggests limiting EU origin to clinker produced in EU ETS installations and countries with an ETS linked system (Norway, Switzerland and, subject to the ongoing linking negotiations, the UK).

As an overall remark and aware of the objective of the IAA, Cement Europe reiterates the importance of securing a competitive international level playing field and promoting the EU’s industrial base. In that regard, the IAA needs to be designed in complement to a fully effective and watertight CBAM and European Commission efforts to explore potential trade measures where necessary.

We trust that these preliminary comments are useful for the upcoming discussion in the Council and remain available for a more detailed exchange on this topic throughout the negotiations.

Annex – IEA low emission production intensity thresholds proposal from the report “Achieving Net Zero Heavy Industry Sectors in G7 Members” ¹ adapted by Cement Europe to make the framework relevant for the European Union

Cement Europe has developed a definition of low carbon cement based on a banding system². The scheme is implemented in Germany as the voluntary Cement Carbon Class (CCC) and can serve the Commission in developing an environmental sustainability labelling requirement for cement:

• Cement types are plotted according to their Global Warming Potential (GWP) values against their clinker-to-cement ratios from national Environmental Product Declarations (EPDs) or, when available, from the environmental performance in DOPCs in accordance with EN 15804 and EN 16908 (Product Category Rules for cement).
• The classes below are fixed to clinker to cement ratio of 0.70.
• The Near Zero band defined by the IEA ³ has the lowest carbon footprint, based on full carbon capture projects.

Classes for cement		Requirement (GHG) CO2 eq / ton of cement
Low carbon cements	D	400 ≤ GHG < 500
	C	300 ≤ GHG < 400
	B	200 ≤ GHG < 300
	A	100 ≤ GHG < 200
	Near Zero	< 100

1. Page 134 of Achieving Net Zero Heavy Industry Sectors in G7 Members, IEA May 2022
2. https://www.cementeurope.eu/media/mkfda0xi/250611-cembureau_position-paper-cement-label.pdf
3. From 40 kg CO2/ton cement for cements with clinker-to-cement at 0% to 125 kg CO2/ton cement for cements with clinker-to-cement at 100%. Page 14 of Achieving Net Zero Heavy Industry Sectors in G7 Members, IEA May 2022