NON-TECHNICAL SUMMARY. CEMEX, Egypt

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1 NON-TECHNICAL SUMMARY CEMEX, Egypt 16/12/2014

2 Table of Contents 1. The Project... 3 What does this Non-Technical Summary Cover? What are the operations at the CEMEX site in Assuit? What are the key surrounding site conditions of CEMEX?... 5 Location of Facilities... 5 What will the proposed investment cover? What are the environmental, health, safety and social aspects of the project?... 7 Overview of EHSS Review... 7 What are the key benefits of the project?... 7 Environmental and Social Action Plan How will stakeholders be engaged in the project? Overview of the SEP What will be the procedure for grievances? Glossary

3 1. The Project This Non-Technical Summary (NTS) provides an overview of the proposed developments at the CEMEX Assuit site in Egypt, following a potential loan from the European Bank for Reconstruction and Development (EBRD). CEMEX is proposing a fuel switch from heavy fuel oil (HFO) to petcoke or coal and other energy efficiency and environmental improvements. This NTS provides a summary of the project description, the benefits of the project and the mitigation of potential environmental and social impacts which have informed the development of an ESAP which will be implemented by CEMEX Egypt or CEMEX. Contact details at CEMEX for this project are: Contact Department Contact Information Corporate Communication and Public Affairs Department 3, Abbas El Akkad Street Nasr City Cairo Egypt Tel: +2(02) Tel : +2(02) Fax: +2(02) heba.hossam@cemex.com What are the operations at the CEMEX site in Assuit? CEMEX Egypt is a construction materials manufacturing facility owned by CEMEX group. CEMEX is a global producer of building materials with its headquarters based in Nuevo León, Mexico. Its product line covers cement, ready-mix concrete and aggregates and is sold in Europe, the US, Mexico, Latin America, the Caribbean and Asia. In advance of this potential loan to finance CAPEX, a high level ESDD was undertaken to assess EHSS management of the production facilities at the plant in Assuit. The plant (was previously owned by the Government and known as Assuit Cement Company) has been operating since Assuit Cement Company was acquired by CEMEX in November Since that time, CEMEX has invested over EGP 2 billion to improve the reliability of the plant, increase its capacity; and improve efficiency, safety, quality, and overall environmental standards. The plant located in Assuit consists of 3 production lines that have a raw material production of approximately 25,000 tonnes/day and an average dispatch of packaged products of 18,000 tonnes per day. Different products are manufactured using different properties of input materials. Each line consists of an integral system that inputs material and heat into the process and has a number of abatement systems to control the release of heat, dust and pollutants such as nitrogen oxides and sulphur oxides (NOX and SOX). The process used to provide sufficient heat to produce cement products is reliant on an energy source of heavy fuel oil or waste material at CEMEX. Heavy fuel oil is stored in tanks on site and waste is brought on site to be processed before using as a fuel. The construction and implementation of new and upgraded facilities to support the planned changes are confined to the boundaries of the manufacturing plant and impacts should be readily identified and assessed and will be addressed through appropriate mitigation measures. Moreover, the upgrade of operational equipment should reduce emissions and result in overall environmental improvement. 3

4 Cement Manufacturing Process Mining the raw material Transporting the raw material Crushing Prehomogenization Raw material storage Raw material milling Raw material homogenization Calcination Cement milling Cement packaging and shipping The key steps of the process consist of the following: Raw materials include sand, clay and limestone that are quarried. Materials are transported by trucks and/or conveyor belts for storage before initial treatment. Initial treatment involves crushing and grinding materials to smaller fragments The smaller fragments are separated according to their properties Separated groups of material are then stored ahead of use The separated groups of raw material are processed through a mill Raw materials are homogenized and referred to as raw meal Material enters a preheated calciner that removes water molecules from the material Calcined material enters a rotating kiln and is heated to 1800C Once the material has passed through the kiln it is cooled quickly The calcined material called clinker is then milled and blended to form cement. It is then stored before it is packaged and shipped to customers 4

5 2 What are the key surrounding site conditions of CEMEX? Location of Facilities Figure 1 Site Location and Surrounding Area The production plant is located within the Assuit area (Governorate of Assiut), Egypt. Assuit is the largest town in Upper Egypt and is located approximately 400km south of Cairo. The plant is located near the river Nile and covers an area of approximately 80 hectares. The site was constructed on an undeveloped area of desert and is located several kilometres away from the nearest residential area. Nearby to the main plant is a readymix product processing area and the quarries that supply raw material (including clay and limestone) to CEMEX. The project will not require any land acquisition as all proposed works are located within CEMEX s existing site boundary. What will the proposed investment cover? The EBRD is considering providing CEMEX a senior corporate loan to be used for a CAPEX switch from heavy fuel oil to petcoke or coal, as a main fuel source for cement production (the project ). The loan will also be used to fund various environmental and efficiency improvements. The replacement of heavy fuel oil to a selection of alternative fuels is part of a nationwide strategy in Egypt to reduce dependency of power plants on natural gas with reserves that are subject to fuel shortages. CEMEX also utilises waste as an alternative fuel source and has one of the largest facilities of waste recovery in Egypt. By improving the handling and storage process of the waste processing facilities, efficiency will increase in addition to the improvement of the environmental, health and safety conditions. The upgrade of 5

6 operational equipment will aim to ensure that all emissions from the plant will comply with both Egyptian and European standards. Current abatement systems involve electrostatic precipitators and bag filters to minimise the release of dust emissions. The precipitators will be replaced by new bag filters (which are recognised as more effective). Figure 2 New bag filter system added to production line 1. To be installed on production lines 2 and 3. Equipment upgrades are planned to take place from towards the end of 2014 and into The timescales for the switch to coal or petcoke from heavy fuel oil and the upgrade of the waste handling and storage process are planned to take place by end of Details of the three key investments to be funded by CAPEX are listed below. An investment in facilities to replace mazout for petcoke or coal - The replacement of heavy fuel oil to an alternative fuel is part of a national strategy to reduce dependency of power plants on natural gas with reserves that are subject to shortages. Within the industry, over EGP 1 billion has already been invested with thousands of new jobs being created nationally. Other industries are expected to benefit from the source of additional energy for electricity. An investment in new equipment for waste handling and storage - CEMEX is reported to be one of the largest waste recovery companies recyclers of waste of waste in Egypt and plans to increases its capacity using new equipment to process household waste, agricultural waste and discarded inorganic materials for use waste as a fuel. This will be supported by new equipment for material handling and storage. This project has been registered under the UN Clean Development Mechanism and has created over 1000 new employment opportunities. An investment in replacing the existing electrostatic precipitator filter by new bag filter that comply with Egyptian and European standards, as well as an extension to the pre-calcination stage of the process to ensure full use of the solid fuels. 6

7 3 What are the environmental, health, safety and social aspects of the project? Overview of EHSS Review An ESDD audit was carried out during August 2014 to conduct a high level EHSS corporate audit of CEMEX operations and of the company s plans for the switch from heavy fuel oil and energy efficiency and other environmental improvements. An evaluation of both the impacts and benefits of the project have been undertaken and where the results of the audit have identified mitigation measures to address impacts or improvements in corporate EHSS performance, a number of actions have been proposed and incorporated into an ESAP to ensure full compliance with relevant corporate, national, EU standards and EBRD Performance Requirements. According to the Egyptian regulatory system, the project has been classified as Category C, requiring it to be supported by a full EIA and consultation with the public. The EIA has been based on the use of petcoke and coal as a fuel. An external consultant has been commissioned to prepare the assessment. Currently, petcoke has been selected ahead of coal due to the availability of the fuel; however, a final decision has yet to be made. Therefore, the plant is being designed for coal and petcoke, allowing for both options. The following impacts and mitigation measures have been identified as part of the EIA process. Potential Impact Dust and emissions resulting from construction operations Solid waste resulting from drilling and construction operations Dust emission resulting from the operation process Increase in carbon dioxide emission Worker s occupational health and safety during operational process Solid waste and effluents resulting from operational process Risk resulting from handling petcoke fuel Key Mitigation Measures Dust control through covered trucks, good storage of materials, and construction equipment in good condition. Waste management plan to recycle solid waste. Nonrecyclable waste collected by contractor. Use of bag filters instead of electrostatic precipitators, good storage of material, enclosed transfer of material and regular inspections. Surround the plant boundaries with trees and implement an energy efficiency system in the plant. Firefighting and first aid equipment installed, metal detector to reduce metals present in fuel and carbon dioxide inerting system to reduce explosion risk. Appropriate storage, covered transportation and treatment of waste water. All necessary mechanical equipment installed, training to employees, storage of petcoke/coal away from water and avoiding employees eating/drinking/smoking while handling fuel. What are the key benefits of the project? The planned switch to petcoke or coal, the increase in used of alternative fuels and the various planned environmental and efficiency improvements result in the reported benefits. 7

8 Elimination of dependence on natural gas from power plants. The participation of CEMEX in the national initiative reduces the demand on HFO, making more available to power plants. Natural gas shortages pose a major threat to electricity supply in Egypt. Power cuts often affect Egypt on a daily basis. Greater availability of HFO as a fuel source will act as a key step in reducing power cuts in the country. Increasing energy efficiency of CEMEX s manufacturing process. Globally, the cement industry is a large consumer of energy due to the nature of the production process. CAPEX improvements, funded by the EBRD, should result in significant gains in energy efficiency, reducing CEMEX s overall consumption. Improved environmental performance. The CAPEX improvements and/or upgrades to equipment such as bag filters in accordance with globally accepted best practice standards will result in emissions being aligned with these requirements, positively impacting air quality. Poor air quality is a significant environmental problem in Egypt. The ESDD process has highlighted the potential impacts on informal waste pickers. CEMEX need to minimise any negative impacts created from the increased use of RDF and CEMEX will develop initiatives to have positive effects. Increased use of alternative fuels. Greater capacity for the use of RDF will result in reducing waste sent to landfill. Poor rates of waste recovery and high landfill disposal rates constitute a considerable environmental problem in Egypt. No net increase in GHG emissions. The carbon content of the new primary fuel (petcoke or coal) will be greater than HFO; however, a fuel blend has been identified to ensure that a net increase of GHG emissions is not experienced. As part of the CDM agreement, CEMEX are committed to minimise GHG emissions through the use of alternative fuels. 8

9 Environmental and Social Action Plan (ESAP) Following the audit, the ESAP was formed to align CEMEX s activities with European equivalent standards and EBRD performance requirements and environmental and social policy. The proposed action areas will result in improved performances of EHSS and risk management. A summary of the key themes that are incorporated into the ESAP from the findings of the audit are provided below. Implementation of the currently intended further introduction of emissions monitoring systems (CEMS) and replacement / updating of dust abatement, in line with BAT; Conducting a review of the primary controls of nitrogen oxide and carbon monoxide through ensuring that combustion conditions (air supply) is optimised; Improved management and fugitive dust emissions and improved preventative maintenance for point source dust abatement systems; An ESAP has been agreed and a summary of key action areas are highlighted below. Review Areas Corporate EHS Management Environmental Performance Planning and Permits Social and Employment Actions Areas Develop and implement a SEP that includes a grievance mechanism Report on company EHS performance and resolution of grievances Develop a decommission plan for old equipment to be dismantled and removed safely to protect workers and the environment as well as undertaking hazardous materials studies with plans for removal of asbestos and other harmful chemicals Complete a formalised study to ensure that the nitrogen oxide and carbon monoxide balance is optimised during the combustion process Develop and implement a preventative maintenance programme for the current and future bag filters to ensure regular servicing and maintenance is undertaken recommendations to minimise down-time and to ensure emissions levels are achieved in line with European standards for emission limit values. Implement fog canons, or alternative dust suppression techniques to minimise the impact of the wind-blown dust emissions from the bypass waste. Continue to explore the opportunities for recycling the bypass dust, which is currently sent to the bypass waste dump and continue to consider the plausibility and benefits of installing a heat recovery unit as a replacement for water dosing and to gain benefit from the waste heat (e.g. generation of electricity through a steam turbine). Engage in public consultation in accordance with national regulatory requirements. Formalise and update the current grievance and complaints mechanisms used for employees and external stakeholders with formal written policies and procedures. Review and update or develop written employment / social policies for the company. If expansion of the bypass waste dump is required (and the avoidance methods set out in this report cannot be implemented), specific liaison with adjacent settlement will be required. Greenhouse Gas Emissions Greenhouse gas emissions are released as a by-product from the cement manufacturing process. Carbon dioxide is released during the calcination and the kiln processes. The switch to petcoke/coal as primary fuel source is expected to result in an increase in carbon dioxide emissions. As a participant in the Clean 9

10 Development Mechanism (CDM) commitment CEMEX aim to reduce carbon dioxide emissions and increase the use of alternative fuels, including refused derived fuels, tyres and biomass..as part of the project, the greenhouse gas emissions have been calculated for current fuel and fuel blend which is to ensure that a net increase in the CO2 emission is not experienced, a scenario has been proposed to determine the quantities of alternative fuels that need to be used. 4 How will stakeholders be engaged in the project? Overview of the SEP A Stakeholder Engagement Plan has been developed for CEMEX with the objective of identifying key stakeholders and ensuring that, where relevant, they are informed in a timely manner of the potential impacts of projects. The plan will also identify a formal grievance mechanism to be used by stakeholders for dealing with complaints, concerns queries etc. It will be reviewed and updated on a regular basis. If activities change or new activities relating to stakeholder engagement commence, the SEP will be brought up to date. The SEP will also be reviewed periodically during project implementation and updated as necessary. The SEP includes the following: Project description, location of the site and key environmental and social issues; Public consultations and information disclosure requirements; Identification of stakeholders and other affected parties; Overview of previous CEMEX stakeholder engagement activities; Stakeholder engagement programme and methods of engagement and resources; and a Grievance mechanism. Stakeholders could be individuals and organisations that may be directly or indirectly affected by the project either in a positive or negative way, who wish to express their views. The definition applied to identify key stakeholders is: any stakeholders with significant influence on or significantly impacted by, the work and where these interests and influence must be recognised if the work is to be successful. Key stakeholders have been identified from the following categories: international; governmental (Egyptian state / regional and local); advisory non-government; services / suppliers; clients; institutions (universities, think tanks, etc.); the industrial sector (trade bodies, cement manufacturers), internal stakeholders (employees); general communities (locally affected people); public groups (nearby hospital, local schools); and the media. The SEP outlines the methods that CEMEX will adopt to ensure effective stakeholder engagement is undertaken, providing details of the programme of future public consultation and information disclosure that will be recorded for major projects. CEMEX will record the following information on an ongoing basis: Type of information disclosed, in what forms (e.g. oral, brochure, reports, posters, radio, etc.), and how it was released or distributed. The locations and dates of any meetings undertaken to date. Individuals, groups, and / or organisations that have been consulted. Key issues discussed and key concerns raised. Company response to issues raised, including any commitments or follow-up actions. Process undertaken for documenting these activities and reporting back to stakeholders. 10

11 If there are questions, queries, complaints or grievances regarding future projects, a grievance mechanism has been developed to address these issues and a grievance form will be used to record this information. The grievance form and the outline on how to use the grievance form is provide below. What will be the procedure for grievances? A grievance mechanism will be adopted in which the grievance form presented below will be used as required to handle grievances from non-employees. The mechanism will be as follows: Grievance received Grievance recorded in a register For an immediate action to satisfy the complaint, the complainant will be informed of corrective action Implement corrective action, record the date and close case For a long corrective action, the complainant will be informed of proposed action Implement corrective action, record the date and close case A grievance should be recorded by the complainant using the grievance form below, ensuring that contact details are provided with the preferred method and language of communication. A clear description should be provided of the incident or grievance. CEMEX will respond to grievances within one month of receiving the form. 11

12 Reference No: Full Name Contact Information Please mark how you wish to be contacted (mail, telephone, ). Preferred Language for communication Public Grievance Form By Post: Please provide mailing address: By Telephone: By English Arabic Other - specify Description of Incident or Grievance: What happened? Where did it happen? Who did it happen to? What is the result of the problem? Date of Incident/Grievance One time incident/grievance (date ) Happened more than once (how many times? ) On-going (currently experiencing problem) What would you like to see happen to resolve the problem? Signature: Date: Please return this form to: Contact Department Corporate Communication and Public Affairs Department Contact Information 3, Abbas El Akkad Street Nasr City Cairo, Egypt Tel: +2(02) Tel : +2(02) Fax: +2(02) heba.hossam@cemex.com 12

13 Glossary BAT Best Available Technique CAPEX Capital Expenditure ESAP Environmental and Social Action Plan EBRD European Bank for Reconstruction and Development ESDD Environmental and Social Due Diligence EHSS Environmental, Health and Safety and Social EU European Union EIA Environmental Impact Assessment EHS Environmental Health and Safety GHG Greenhouse Gas Ha Hectares NTS Non-Technical Summary PPE Personal Protective Equipment T Tonnes t CO 2 -e/yr Tonnes of carbon dioxide equivalent per year 13

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