Existing law requires the State Air Resources Board to develop a comprehensive strategy for the states cement sector to achieve net-zero emissions of greenhouse gases associated with cement used in the state as soon as possible, but no later than December 31, 2045.

This bill would set a policy for the state to purchase or specify, on a statewide basis, at least 10%, by volume, of cement and concrete, including supplementary cementitious materials, that meet a certain benchmark by 2030 and to exclude the purchase of all fossil-based supplementary cementitious materials from that 10% by 2035. The The bill would specify that a supplementary cementitious material developed through the mineralization of emissions from fossil fuel combustion is not considered a fossil-based material.

This bill would require, by March 31, 2024, the Department of Transportation, in consultation with the Department of General Services, to develop a model advance procurement agreement for the purchase or specification of low-carbon cement and low-carbon concrete products up to 10 years in advance that would facilitate the development of production of concrete, cement, and supplementary cementitious materials that meet or exceed the benchmark for low-carbon cement and concrete and, low-carbon concrete, and would, in meeting the goals described above, authorize state agencies to use the model agreement for the purchase or specification of low-carbon cement and low-carbon concrete products. The bill would allow, for purposes of meeting the state policy described above, the volume of low-carbon cement or low-carbon concrete products agreed to be supplied under a model advance procurement agreement, but that was not actually supplied, to be counted for up to 5 years or until the state agency is able to obtain the missing materials, as specified.

Existing law requires the State Air Resources Board to develop a comprehensive strategy for the states cement sector to achieve net-zero emissions of greenhouse gases associated with cement used in the state as soon as possible, but no later than December 31, 2045.

This bill would set a policy for the state for state agencies to purchase or specify specify, on a statewide basis, at least 10%, by volume, of cement and concrete, including supplementary cementitious materials, that meet a certain benchmark by 2030 and to exclude the purchase of fossil-based supplementary cementitious materials by 2035. The bill would require, by March 31, 2024, the Transportation Agency, the Department of Transportation, in consultation with the Department of General Services, the Department of Water Resources, and other state agencies, in collaboration with the State Air Resources Board, to develop and enter into a model advance procurement agreements agreement for the purchase or specification of low-carbon cement and low-carbon concrete products up to 10 years in advance that would facilitate the development of production of concrete, cement, and supplementary cementitious materials that meet or exceed the benchmark for low-carbon cement and concrete, as provided. concrete and, would, in meeting the goals described above, authorize state agencies to use the model agreement for the purchase or specification of low-carbon cement and low-carbon concrete products.

Existing law requires the State Air Resources Board to develop a comprehensive strategy for the states cement sector to achieve net-zero emissions of greenhouse gases associated with cement used in the state as soon as possible, but no later than December 31, 2045.

This bill would set a policy for the state for state agencies to purchase or specify at least 10%, by volume, of cement and concrete, including supplementary cementitious materials, that meet a certain benchmark by 2030 and to exclude the purchase of fossil-based supplementary cementitious materials by 2035. The bill would require, by March 31, 2024, the Transportation Agency, the Department of Transportation, the Department of General Services, the Department of Water Resources, and other state agencies, in collaboration with the State Air Resources Board, to develop and enter into advance procurement agreements for the purchase or specification of low-carbon cement and low-carbon concrete products up to 10 years in advance that would facilitate the development of production of concrete, cement, and supplementary cementitious materials that meet or exceed the benchmark for low-carbon cement and concrete, as provided.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

SB 682 (Skinner) - Low-carbon cement and low-carbon concrete

Bill Summary:

This bill would make it the policy of the state to purchase or specify at least 10 percent of cement and concrete meet or exceed a specified benchmark for low-carbon cement by 2030 and to exclude the purchase of all fossil-based supplementary cementious materials from that 10% by 2035.

Fiscal Impact:

• Unknown, likely significant ongoing costs (General Fund) for the Department of General Services to purchase or specify low-carbon concrete or low-carbon cement by 2030 and exclude from that 10 percent the purchase of all fossil-based supplementary cementitious materials by 2035.
• Unknown, likely significant ongoing costs (General Fund) for the Department of Transportation (CalTrans) to implement the provisions of this bill. CalTrans anticipates the bill would impact more than 600 projects annually and could result in significant initial and ongoing costs and could increase overall project costs.
• Unknown, likely significant ongoing costs (General Fund and special fund) for the Department of Water Resources to implement the provisions of this bill.

Background:

Cement is a major source of GHG emissions. Cement accounts for 1.8% of the California’s GHG emissions and 7% of CO2 emissions worldwide. It is often referred to as one of the most hard to abate industrial sectors. This is because part of the process of making cement usually requires grinding the intermediate product in a rotary kiln that is heated to about 2700 °F. Heating these kilns requires fossil fuels; full electrification is not currently feasible. Furthermore, the chemical reactions that occur in this process cause the limestone to release stored CO2. This heating step accounts for about 85% of all emissions associated with cement, which the US EPA has estimated to range from 720-880 kilograms of CO2 per metric ton of cement. Cement production accounts for 80- 90% of the life cycle CO2 emissions for the concrete.

Supplementary cementious materials (SCMs) can lower the GHG emissions from concrete production. SCMs are natural materials or industrial byproducts used to partially replace cement in the production of concrete. Because SCMs reduce the amount of cement needed to make concrete, they generally reduce the emissions associated with concrete production. Caltrans maintains a list of authorized materials that includes acceptable SCMs.

Two of the most common SCMs are slag, a glassy, granular material formed as waste during the production of iron and steel, and fly ash, the fine residue resulting from the combustion of pulverized coal. While replacing cement with a waste product may result in the creation of fewer GHG emissions, the production of these specific fossil-based SCMs are emissions intensive. This bill would make it the policy of the state to eliminate slag and fly ash from its concrete by 2035.

Purchasing, contracting & advanced procurement agreements (APAs). This bill directs Caltrans and DGS to develop a model for advanced procurement agreements for the purchase or specification of low-carbon cement and low-carbon concrete products up to 10 years in advance. However, as a practical matter, state agencies generally don’t buy cement or concrete as a stand-alone product. Rather, they award contracts to private firms to build and repair roads, bridges, reservoirs, and much more, and those private firms produce their own or contract out for the cement and/or concrete. Since these construction contracts are very project-specific and generally awarded through a competitive bidding process, it’s not clear how state agencies could enter into APAs with any entity up to 10 years in advance.

According to the bill sponsors, one way the agencies could develop this APA is by putting out a bid for a certain amount of low-carbon cement or concrete to be delivered by a date up to 20 years in the future. The winner of the contract would enter into an APA with the state agency, giving it a guaranteed market for its product, so it in turn could get financing from a private bank to build the facility needed to manufacture the product. The state agency would take figurative delivery of the low-carbon cement or concrete and would then presumably have to require the winners of construction and maintenance contracts to use this concrete to fulfill their contracts. This is designed to meet one of the bill’s stated goals, which is to use APAs to help develop the low-carbon cement and concrete industry by demonstrating there is market demand for the product.

Proposed Law:

This bill would make it the policy of the state to purchase or specify at least 10 percent of cement and concrete meet or exceed a specified benchmark for low-carbon cement by 2030 and to exclude the purchase of all fossil-based supplementary cementious materials from that 10% by 2035.

Related Legislation:

SB 596 (Becker, Chapter 246, Statutes of 2021) – Requires CARB to – by July 1, 2023 – develop a comprehensive strategy for the state’s cement sector to achieve net-zero emissions of GHG associated with cement used within the state as soon as possible, but no later than December 31, 2045

AB 966 (Bonta, 2019) – Would have required each cement plant in the state to submit a facility-specific Environmental Product Declaration (EPD) to CARB and require state agencies awarding contracts to require large successful bidders to submit a product-specific EPD for projects that involve the purchase of more than 500 cubic yards of concrete. This bill died in the Assembly Appropriations Committee.

AB 262 (Bonta, Chapter 816, Statutes of 2017) – The Buy Clean California Act, requires DGS to develop maximum acceptable global warming potential emissions for structural steel, concrete reinforcing steel, flat glass, and mineral wool board insulation used in public works projects.

AB 1452 (Skinner, 2009) – Would have required CARB to develop and adopt limitations on GHG emissions resulting from the production of cement sold in the state, including GHG emissions resulting from transportation, by January 1, 2011. This bill died in the Assembly Appropriations Committee.

Staff Comments:

DGS costs. DGS notes that the bill’s model advance procurement agreement for the purchase or specification of low-carbon cement and low-carbon concrete products up to 10 years in advance would carry some significant risks. One would be that a state agency could be trapped in an uneconomical deal if the market price of these materials 10 years from now turns out to be far lower. Because the bill aims to bring these products to market, the actual production costs are not yet known. The bill’s 10-year timeframe for the model advance procurement agreement suggests that a proposed bidder would be banking on making improvements to production methods between now and the time of delivery.

Alternately, the state could have a deal with a low-carbon cement or low-carbon concrete contractor that that may not be able to deliver the product on time and in sufficient quantity. This also creates significant risk in the state’s public works projects if the state directly procures these products. Currently, the contractor on a public works project is responsible for procuring materials. Changing this responsibility opens a new avenue of disputes between the state and a contractor, and dilutes the contractor’s responsibility to supply. This creates risk of delays, challenges and change orders to a public works project.

CalTrans costs. CalTrans anticipates this bill would impact more than 600 projects annually and could create significant initial and ongoing cost to implement and could increase overall project costs. For example, if this bill was adopted as written, the Department would likely require additional resources to perform additional testing and data reviews, additional outreach and collaboration with industry, additional tracking of the long-term performance of this new specification of cement, and additional calculations to quantify the environmental gains of these new policies.

This bill would create additional costs for the Caltrans to implement the advanced purchase agreement in this bill. Caltrans would need to first develop a model advance procurement agreement with Department of General Services for state agencies to use. Caltrans would then be required to use this model agreement, to enter into advance procurement agreements for purchasing or specifying low-carbon cement and concrete based on long-term predictions of future contracts. These agreements would present a risk to the Caltrans, as project needs, and requirements are likely to change.

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SENATE COMMITTEE ON TRANSPORTATION

Senator Lena Gonzalez, Chair

2023 - 2024 Regular

Bill No: Hearing Date: 4/25/2023

SUBJECT:

DIGEST: This bill would make it the policy of the state to purchase or specify at least 10 percent of cement and concrete meet or exceeds a specified benchmark for low-carbon cement by 2030 and to exclude the purchase of all fossil-based supplementary cementious materials by 2035.

ANALYSIS:

Existing law:

1. Requires the California Air Resources Board (CARB), by July 1, 2023, to develop a comprehensive strategy for the state’s cement sector to achieve net-zero emissions of greenhouse gases (GHG) from cement used in the state as soon as possible, but no later than December 31, 2045. (Health & Safety Code (HSC) §38561.2)
2. Executive Order N-19-19:
   1. Directs the California State Transportation Agency (CalSTA) to leverage more than $5 billion in annual state transportation spending for construction, operations, and maintenance to help reduce GHG emissions.
   2. Directs the Department of General Services (DGS) to minimize the state government’s carbon footprint and to develop and implement sustainable purchasing policies to prioritize the purchase of environmentally preferable goods and materials.
3. Requires CARB to ensure statewide GHG emissions are reduced by at least 40% below the 1990 level by 2030. (HSC §38500 et seq.)

This bill:

1. Makes legislative findings and declarations regarding the use of concrete and cement in California and the state’s decarbonization goals.
2. Establishes the benchmark for low-carbon cement and concrete to be the benchmarks set forth in the commitment made by the First Movers Coalition at the 27^th Conference of Parties United Nations Climate Conference (COP 27). These benchmarks are cement with embodied carbon below 184 kilograms of CO₂ equivalent per ton and concrete with embodied carbon values ranging from 70-144 kilograms of CO₂ equivalent per cubic meter depending on the specified compressive strength of the concrete.
3. Establishes the definition of fossil-based supplementary cementious materials (SCMs) to be based on the definition set forth in the commitment made by the First Movers Coalition. This definition includes SCMs made from ground granulated blast-furnace slag and fly ash.
4. Declares that it is the policy of the state to purchase or specify, on a statewide basis, at least 10 percent, by volume, of low-carbon cement and concrete by 2030, and exclude the purchase of all fossil-based SCMs by 2035.
5. Requires the California Department of Transportation (Caltrans), in consultation with DGS, to develop a model advance procurement agreement for the purchase or specification of low-carbon cement and concrete products up to 10 years in advance, to facilitate the development of these products.
6. Authorizes state agencies to use the model advance procurement agreement developed by Caltrans and DGS to achieve the policy of purchasing of specifying or purchasing low-carbon cement and concrete.

COMMENTS:

1. Purpose of bill. According to the author, “The cement and concrete industry is one of the most difficult industries to decarbonize, and unfortunately, cement and concrete production accounts for about 8 percent of global carbon emissions. In California, the largest concrete consumer is Caltrans, which consumes about 40% of all concrete in the state, and spends around $5 billion on transportation infrastructure every year. With that much market power, California can accelerate decarbonization in this sector by committing to purchase low-carbon cement and concrete, catalyzing innovation in technology and scaled production for these solutions. By making sure that California prioritizes low-carbon cement purchases, we can build on the great work accomplished in this space to achieve our 2045 zero-emission goals.”
2. California relies on concrete and cement. Cement is a chemical substance, usually made out of limestone and silicate-containing minerals, used to adhere other materials together to make a new, stable, material. One of the most common uses of cement is to combine it with water, fine materials like sand, and coarse materials like gravel, in order to produce concrete. In a typical mix, the cement represents 10-15% of the material by volume. Concrete is the most common building material used in the world because it is relatively cheap, durable, and easily molded into sturdy structures.

According to the United States Geological Survey, in January of 2023 California was the third largest producer and consumer of cement in the country after Texas and Florida. In the last year California consumed about 10.5 million metric tons of cement.

1. Cement is a major source of GHG emissions. Cement accounts for 1.8% of the California’s GHG emissions and 7% of CO₂ emissions worldwide. It is often referred to as one of the most hard to abate industrial sectors. This is because part of the process of making cement usually requires grinding the intermediate product in a rotary kiln that is heated to about 2700 °F. Heating these kilns requires fossil fuels; full electrification is not currently feasible. Furthermore, the chemical reactions that occur in this process cause the limestone to release stored CO₂. This heating step accounts for about 85% of all emissions associated with cement, which the US EPA has estimated to range from 720-880 kilograms of CO₂ per metric ton of cement. Cement production accounts for 80- 90% of the life cycle CO₂ emissions for the concrete.

According to a report from the climate think tank Energy Innovation, California won’t meet its 2030 GHG emission reduction goals unless industries like cement producers reduce their emissions. The report notes this would require plant retrofits, major changes to infrastructure, and would require the use of technologies that haven’t yet been deployed at scale in California, like carbon capture and storage.

In 2019, Global Efficiency Intelligence, an environmental consulting firm, published a report called Deep Decarbonization Roadmap for the Cement and Concrete Industries in California. It identified the following four strategies, in order of greatest reduction potential to least:

• 1. Carbon capture, utilization, and storage – capturing and compressing CO₂ emitted during cement production to be permanently stored;
  2. Clinker substitution – replacing conventional cement starting and intermediate materials with supplementary cementitious materials (SCMs) that produce less CO2;
  3. Fuel switching – replacing coal and petroleum coke used for heating with natural gas or a low carbon fuel; and

• 1. Energy efficiency, including waste heat recovery.

1. Supplementary cementious materials (SCMs) can lower the GHG emissions from concrete production. SCMs are natural materials or industrial byproducts used to partially replace cement in the production of concrete. Because SCMs reduce the amount of cement needed to make concrete, they generally reduce the emissions associated with concrete production. Caltrans maintains a list of authorized materials that includes acceptable SCMs.

Two of the most common SCMs are slag, a glassy, granular material formed as waste during the production of iron and steel, and fly ash, the fine residue resulting from the combustion of pulverized coal. While replacing cement with a waste product may result in the creation of fewer GHG emissions, the production of these specific fossil-based SCMs are emissions intensive. This bill would make it the policy of the state to eliminate slag and fly ash from its concrete by 2035.

1. First Movers Coalition (FMC). The FMC is a public-private partnership to commercialize clean technologies through advanced purchase commitments. It was formed by President Biden in partnership with the World Economic Forum at the Conference of the Parties (COP) in 2021 (referred to as COP26) and now includes 65 companies, representing more than 10% of the global Fortune 2000 by market value, as well as ten government partners.

At last year’s COP27 in Egypt, the FMC set commitments for purchasers and specifiers of cement and concrete. For construction and engineering projects, the member companies and government agencies committed to purchasing at least 10% (by volume) of their cement/concrete per year as near-zero cement/concrete inclusive of any SCMs by 2030 and excluding fossil-based SCMs by 2035. It established the definition of “near-zero” cement to mean cement with embodied carbon below 184 kilograms of CO₂ per metric ton.

1. Is this bill redundant with existing efforts? At least two state agencies have announced plans to begin using or are already using low-carbon cement.

In January 2022, Caltrans announced it was approving the use of low-carbon cement, relying on Portland limestone cement, which the agency says can cut its concrete-related carbon dioxide emissions by up to 10% a year while meeting the same high performance standards as regular concrete at a slightly lower cost. Caltrans is one of the largest consumers of cement and concrete in the state.

The Department of Water Resources announced in November 2022 that it too was using more carbon-friendly concrete. It made repairs at the Oroville Dam using low-carbon concrete, resulting in 125 pounds per cubic yard of less cement and reduced about 2,037 tons of carbon dioxide. The agency says it was the equivalent of eliminating the emissions of 400 gasoline-powered vehicles over one year.

Additionally, the Legislature passed SB 596 (Becker, Chapter 246, Statutes of 2021) which required CARB to – by July 1, 2023 – develop a comprehensive strategy for the state’s cement sector to achieve net-zero GHG emissions as soon as possible, but no later than December 31, 2045. CARB’s efforts will focus on developing regulations and incentives for producers of cement and concrete to transition to lower-emission production methods. This bill’s approach is complementary by focusing on developing a market for those producers; it should not conflict with the strategy CARB is developing.

1. Purchasing, contracting & advanced procurement agreements (APAs). This bill directs Caltrans and DGS to develop a model for advanced procurement agreements for the purchase or specification of low-carbon cement and low-carbon concrete products up to 10 years in advance. However, as a practical matter, state agencies generally don’t buy cement or concrete as a stand-alone product. Rather, they award contracts to private firms to build and repair roads, bridges, reservoirs, and much more, and those private firms produce their own or contract out for the cement and/or concrete. Since these construction contracts are very project-specific and generally awarded through a competitive bidding process, it’s not clear how state agencies could enter into APAs with any entity up to 10 years in advance.

According to the bill sponsors, one way the agencies could develop this APA is by putting out a bid for a certain amount of low-carbon cement or concrete to be delivered by a date up to 20 years in the future. The winner of the contract would enter into an APA with the state agency, giving it a guaranteed market for its product, so it in turn could get financing from a private bank to build the facility needed to manufacture the product. The state agency would take figurative delivery of the low-carbon cement or concrete and would then presumably have to require the winners of construction and maintenance contracts to use this concrete to fulfill their contracts. This is designed to meet one of the bill’s stated goals, which is to use APAs to help develop the low-carbon cement and concrete industry by demonstrating there is market demand for the product.

1. Novel approach for novel technology. The development of a 10-year APA raises several questions that Caltrans and DGS will have to work through, especially given that many of the products developed under this contract are made with novel technology. This bill wisely takes a technology-neutral approach to setting state goals for procuring near-zero carbon concrete and cement. But that means that Caltrans will have to carefully evaluate the physical and chemical properties of the concrete and cement produced from these new processes, to determine in which use cases they work nearly as well or perhaps even better than conventional materials. The “Buy Clean California Act” of 2017 requires Environmental Product Declarations (EPDs) for certain materials being used on state building projects and prohibits successful bidders from installing the eligible materials on the project until the bidder submits an EPD. A barrier to implementing an APA model may be the time and resources necessary to complete an EPD for these novel products.
2. Slagging off. Phasing out the use of fossil-based SCMs like fly ash and slag is in line with California’s overall goals of transitioning away from fossil fuel-based energy and materials. However, the approach this bill takes to entirely ban fossil-based SCMs may inadvertently cause issues. The state currently uses over 1 million tons of SCMs, according to the California Construction and Industrial Materials Association. If Caltrans is unable to find a fossil-free alternative for these SCMs before 2035, they would be forced to return to SCM-free concrete or move to a poorer quality SCM, which may actually increase the overall emissions of the state’s cement industry. The committee and author may wish to amend the bill to specify that only the 10% of the state’s specified concrete that must be near-zero carbon also need to be free of fossil-based SCMs.
3. I have a bridge to sell you… It will be difficult for an agency to properly evaluate a bid from an entity that has yet to build a facility to produce the product necessary to fulfill the contract it hopes to receive from the state. While agreeing to buy something up to 10 years in advance may indeed help develop a particular market and help a vendor receive financing to build a factory to manufacture its product, this may not necessarily be in the taxpayers’ best interest. For example, in 2009, the cost to install solar panels was about $8.50 per watt, but by 2021, that cost had fallen to about $2.77 per watt. If the state had entered into an APA in 2009 to buy solar panels at $8.50 per watt to take delivery of them in 2021, it would have been paying more than 200% above the 2021 market rate for the panels.

Beyond price considerations there are also reasonable concerns that despite industry promises, companies may not be able to effectively scale their technology to supply the amounts of concrete required under this policy and agreed to in an APA. If California’s use of concrete merely remains steady, it will require 1 million metric tons of concrete per year by 2030 from an industry that currently is only producing at the laboratory scale. If a company is unable to deliver on the contract, then the state might suddenly find itself struggling to source zero-carbon cement from another source. This short notice will dramatically increase prices, if it is even possible at all. The committee and author may wish to amend the bill to allow a state agency an additional five years to specify or use the promised amount of low-carbon cement or concrete if the contractee fails to deliver the material agreed to in the APA.

1. Double Referral. This bill was double-referred to the Senate Committee on Environmental Quality where it was heard on March 29, 2023 and was passed on a 5-2 vote.

Related Legislation:

SB 596 (Becker, Chapter 246, Statutes of 2021) – Requires CARB to – by July 1, 2023 – develop a comprehensive strategy for the state’s cement sector to achieve net-zero emissions of GHG associated with cement used within the state as soon as possible, but no later than December 31, 2045

AB 966 (Bonta, 2019) – Would have required each cement plant in the state to submit a facility-specific Environmental Product Declaration (EPD) to CARB and require state agencies awarding contracts to require large successful bidders to submit a product-specific EPD for projects that involve the purchase of more than 500 cubic yards of concrete. This bill died in the Assembly Appropriations Committee.

AB 262 (Bonta, Chapter 816, Statutes of 2017) – The Buy Clean California Act, requires DGS to develop maximum acceptable global warming potential emissions for structural steel, concrete reinforcing steel, flat glass, and mineral wool board insulation used in public works projects.

AB 1452 (Skinner, 2009) – Would have required CARB to develop and adopt limitations on GHG emissions resulting from the production of cement sold in the state, including GHG emissions resulting from transportation, by January 1, 2011. This bill died in the Assembly Appropriations Committee.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

Unknown

POSITIONS: (Communicated to the committee before noon on Wednesday, April 19, 2023.)

SUPPORT:

Blue Planet

Brimstone Energy

Carbonbuilt

Decarbonized Cement & Concrete Working Group

Heirloom Carbon

Institute for Carbon Management

OPPOSITION:

None received

-- END --

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Allen, Chair

2023 - 2024 Regular

Bill No: SB 682

SUBJECT: Low-carbon cement and concrete.

DIGEST: Requires several state agencies to work with the California Air Resources Board (CARB) to develop and enter into advance procurement agreements (APAs) to buy or specify low-carbon cement and low-carbon concrete products up to 10 years in advance.

ANALYSIS:

Existing law:

1. Requires CARB – by July 1, 2023 – to develop a comprehensive strategy for the state’s cement sector to achieve net-zero emissions of greenhouse gases (GHG) from cement used in the state as soon as possible, but no later than December 31, 2045. (Health & Safety Code (HSC) §38561.2)
2. Executive Order N-19-19:
   1. Directs the California State Transportation Agency (CalSTA) to leverage more than $5 billion in annual state transportation spending for construction, operations, and maintenance to help reduce GHG emissions.
   2. Directs the Department of General Services (DGS) to minimize the state government’s carbon footprint and to develop and implement sustainable purchasing policies to prioritize the purchase of environmentally preferable goods and materials.
3. Requires CARB to ensure statewide GHG emissions are reduced by at least 40% below the 1990 level by 2030. (HSC §38500 et seq.)
4. Requires CalSTA to use escalating percentages of crumb rubber for state highway construction projects and to annually prepare an analysis comparing the cost differential between asphalt containing crumb rubber and conventional asphalt. (Public Resources Code §42703).

This bill:

1. Makes numerous findings and declarations regarding the need to achieve deep GHG reductions in cement and concrete by relying on new advanced technologies and APAs.
2. Defines “benchmark for low-carbon cement and concrete” to mean the benchmarks for concrete and cement products set forth in the commitment made by the First Movers Coalition at the 27th Conference of Parties United Nations Climate Conference in Cairo, Egypt.
3. States it is the policy of California that state agencies, including the CalSTA, the Department of Transportation (Caltrans), DGS, and the Department of Water Resources (DWR), buy or specify at least 10% volume of cement and concrete, including supplementary cementitious materials, that meet or exceed the benchmark for low-carbon cement and concrete by 2030 and to not buy any all fossil-based supplementary cementitious materials by 2035.
4. Requires CalSTA, Caltrans, DGS, DWR, and other state agencies to work with CARB to – by March 31, 2024 – develop and enter into APAs to buy or specify low-carbon cement and low-carbon concrete products up to 10 years in advance.
5. Requires these APAs to be equal to or more than 10% of each state agencies’ total annual spending attributable to cement and concrete by 2030.

Background

1. Concrete and Cement. Concrete is a mixture of cement (a binder usually made from lime or calcium silicate), aggregates (sand, rock, etc.), water, and air. In a typical mix, the cement represents 10-15% of the material by volume but 80-

90% of the life cycle CO2 emissions for the concrete.

Cement is made by grinding clinker, an intermediary nodular material produced from heating limestone and clay in a rotary kiln to about 2700 °F. Most of the energy used in cement manufacturing is in clinker production. The remainder of emissions comes from quarrying, transporting, and preparing the other raw materials.

California is the second largest cement producing state after Texas, accounting for 10-15% of the cement production and industry employment in the US as of

2009. As of 2019, there were eight cement plants in California and more than

300 concrete manufacturing plants. Most of the cement used in California is produced in state and cement and clinker production is expected to increase significantly in California as the population and economy grow.

1. Concrete GHG Emissions. Cement accounts for 1.8% of the California’s GHG emissions and 7% of CO2 emissions worldwide. It is often referred to as one of the most hard to abate industrial sectors.

Cement plants are also the largest consumer of coal in the state. In 2015, 51% of fuel combustion and energy for California's cement industry came from coal, while 12% came from electricity.

Due to the high heat required, full electrification of these plants is difficult. GHG emissions dropped 20% between 2000 and 2015, mainly due to a drop in production, however, they have slowly been rising again since.

According to an Energy Innovation Report, California won’t meet its 2030 GHG emission reduction goals unless heavy industry like cement producers reduce their emissions. The report notes this would require plant retrofits, major changes to infrastructure, and would likely require the use of technologies that haven’t yet been deployed at scale in California, like carbon capture and storage (CCS).

1. How To Decarbonize Cement. The GHG emissions stemming from the making of cement are approximately 40% from energy use (for heating and driving the processing) and 60% from the chemical reaction that occurs when limestone is heated at high temperatures to make cement, known as “process emissions.”

In 2019, Global Efficiency Intelligence, an environmental consulting firm, published a report called Deep Decarbonization Roadmap for the Cement and

Concrete Industries in California. It identified the following four strategies, in order of greatest reduction potential to least:

• 1. Carbon capture, utilization, and storage (CCUS) – capturing and compressing CO2 emitted during cement production to be permanently stored;
  2. Clinker substitution – replacing conventional Portland cement clinker with supplementary cementitious materials (SCMs) that produce less CO2;
  3. Fuel switching – replacing coal and petroleum coke used for heating with natural gas or a low carbon fuel; and
  4. Energy efficiency, including waste heat recovery.

Implementing these four strategies could potentially reduce GHG emissions from concrete and cement by up to 68% compared to 2015 levels by 2040. A more conservative estimate with moderate improvements and low adoption of CCUS is around a 13% reduction by 2040.

1. Is California Already Moving In This Direction? At least two state agencies have announced plans to begin using or that they are already using low-carbon cement.

In January 2022, Caltrans announced it was approving the use of low-carbon cement, relying on Portland limestone cement, which the agency says can cut its concrete-related carbon dioxide emissions by up to 10% a year while meeting the same high performance standards as regular concrete at a slightly lower cost.

DWR announced in November 2022 that it too was using more carbon-friendly concrete. It made repairs at the Oroville Dam using low-carbon concrete, resulting in 125 pounds per cubic yard of less cement and reduced about 2,037 tons of carbon dioxide. The agency says it was the equivalent of eliminating the emissions of 400 gasoline-powered vehicles over one year.

1. First Movers (& Shakers). The First Movers Coalition (FMC) is a public-private partnership to commercialize clean technologies through advanced purchase commitments. It was formed by President Biden in partnership with the World Economic Forum at Conference of the Parties (COP) in 2021 (referred to as COP26) and now includes 65 companies, representing more than 10% of the global Fortune 2000 by market value, as well as ten government partners.

At last year’s COP27 in Egypt, FMC set commitments for purchasers and specifiers of cement and concrete. For construction and engineering projects, the member companies and government agencies committed to purchasing at least 10% (by volume) of their cement/concrete per year as near-zero cement/concrete inclusive of any supplementary cementitious materials (SCM) by 2030 and excluding fossil-based SCMs by 2035.

1. What Other States Are Doing? A New York law took effect in January 2022 requiring the state’s Office of General Services to establish guidelines for buying low-embodied-carbon concrete, also known as LECC.

In Colorado, a 2021 law requires that beginning in 2024, state projects over $500,000 have to being using materials – including low-carbon cement and concrete – to reduce the greenhouse gas emissions during the construction of state public projects.

In New Jersey, a bill was signed into law in January 2023 making concrete producers who supply at least 50 yards of concrete for state funded construction projects eligible for a performance-based tax credit if the concrete they deliver for things like foundations, bridges, and sidewalks also delivers quantifiable reductions in embodied carbon.

Comments

1. Purpose of Bill. According to the author, “The cement and concrete industry is one of the most difficult industries to decarbonize, and unfortunately, cement and concrete production accounts for about 8% of global carbon emissions. In California, the largest concrete consumer is Caltrans, which consumes about 40% of all concrete in the state, and spends around $5 billion on transportation infrastructure every year. With that much market power, California can accelerate decarbonization in this sector by committing to purchase low-carbon cement and concrete, catalyzing innovation in technology and scaled production for these solutions. By making sure that California prioritizes low-carbon cement purchases, we can build on the great work accomplished in this space to achieve our 2045 zero-emission goals.”
   
2. Each State Agency Or State Agencies As A Whole? The bill states “It is the policy of the state” that state agencies buy or specify at least 10% by volume of cement and concrete meet or exceed the benchmark for low-carbon cement and concrete by 2030. Later, the bill requires that collectively, the APAs account for at least 10% of “state agencies’ total annual spending attributable to cement and concrete by 2030 …”

It appears the policy is for each agency to hit the 10% mark by volume, but the requirement is for collectively, all state agency spending on low-carbon cement and low-carbon concrete to be 10% of their total spending on cement and concreate. The author and committee may wish to consider aligning the policy and the requirement so it’s clear the 10% number applies to all state agencies collectively, not individually to each state agency, and specify it applies to the volume of cement and concreate purchased, not the amount of money spent buying cement and concrete.

1. Purchasing, Contracting & APAs. The bill requires CARB and state agencies to “develop and enter into advance procurement agreements for the purchase or specification of low-carbon cement.” However, as a practical matter, state agencies generally don’t buy cement or concrete as a stand-alone product. Rather, they award contracts to private firms to build and repair roads, bridges, reservoirs, and much more, and those private firms produce their own or contract out for the cement and/or concrete.

Since these construction contracts are very project-specific and generally awarded through a competitive bidding process, it’s not clear how state agencies could enter into APAs with any entity up to 10 years in advance.

According to the sponsor, one way this could work would be for a state agency to put out a bid solicitation for X amount of low-carbon cement or concrete to be delivered by a date certain up to 10 years in the future, such as 2033. The winner of the contract would enter into an APA with the state agency, giving it a guaranteed market for its product, so it in turn could get financing from a private bank to build the facility needed to manufacture the product. The state agency would take figurative delivery of the low-carbon cement or concrete and would then presumably have to require the winners of construction and maintenance contracts to use this concrete to fulfill their contracts.

This is designed to meet one of the bill’s stated goals, which is to use APAs to help develop the low-carbon cement and concrete industry by demonstrating there is market demand for the product. However, this approach raises a number of questions, not the least of which is whether a state agency can properly evaluate a bid from an entity that has yet to build a facility to produce the product necessary to fulfill the contract it hopes to receive from the state.

While agreeing to buy something up to 10 years in advance may indeed help develop a particular market and help a vendor receive financing to build a factory to manufacture its product, this may not necessarily be in the taxpayers’ best interest. For example, in 2009, the cost to install solar panels was about $8.50 per watt, but by 2021, that cost had fallen to about $2.77 per watt. If the state had entered into an APA in 2009 to buy solar panels at $8.50 per watt to take delivery of them in 2021, it would have been paying more than 200% above the 2021 market rate for the panels.

The author and committee may wish to consider making the use of an APA optional, instead of mandatory, but yet require Caltrans – in consultation with DGS – to develop a model APA that could accomplish the goals of this bill while at the same time reducing the state’s potential fiscal risk.

1. Cart v. Horse. Current law requires CARB to – by July 1, 2023 – develop a comprehensive strategy for the state’s cement sector to achieve net-zero GHG emissions as soon as possible, but no later than December 31, 2045

This bill requires the state to develop and enter into advance procurement agreements to buy or specify low-carbon cement and low-carbon concrete products up to 10 years in advance by March 31, 2024.

The author and committee may wish to consider whether it would be more appropriate to wait until after CARB releases its comprehensive strategy to get to net zero GHG emissions from cement prior to adopting a mandate to purchase a certain amount of low-carbon cement and concrete.

1. Is Three Months Enough Time? The bill requires state agencies to work with CARB to develop and enter into advance procurement agreements to buy or specify low-carbon cement and low-carbon concrete products up to 10 years in advance by March 31, 2024. However, if this bill is signed into law, it wouldn’t take effect until January 1, 2024. The author and committee may wish to consider whether three months is enough time for the state agencies to accomplish what is mandated by this bill.
2. Technically Speaking. Page 3, Line 16, and Line 34 of the bill refers to Cairo as the city that hosted the 27th Conference of Parties United Nations Climate Conference. The conference was actually held in Sharm El-Sheikh, Egypt. The author and committee may wish to consider making this technical change to accurately refer to the location of the conference.

Page 4, Line 3, inadvertently references subdivision (a) of the bill when it should be referencing subdivision (b). The author and committee may wish to consider making this technical change.

1. Committee amendments. Staff recommends the committee adopt the suggested bolded amendments in Comments 2, 3 and 6 above.

Related/Prior Legislation

SB 596 (Becker, Chapter 246, Statutes of 2021), requires CARB to – by July 1, 2023 – develop a comprehensive strategy for the state’s cement sector to achieve net-zero emissions of GHG associated with cement used within the state as soon as possible, but no later than December 31, 2045.

AB 966 (Bonta) of 2019 sought to require each cement plant operating in the state to submit a facility-specific Environmental Product Declaration (EPD) to CARB and require state agencies awarding contracts to require large successful bidders to submit a product-specific EPD for projects that involve the purchase of more than 500 cubic yards of concrete. This bill died in the Assembly Appropriations Committee.

AB 1452 (Skinner) of 2009 sought to require CARB to develop and adopt limitations on GHG emissions resulting from the production of cement sold in the state, regardless of the cement's origin and including GHG emissions resulting from transportation by January 1, 2011. This bill died in the Assembly Appropriations Committee.

SOURCE:

Decarbonized Cement & Concrete Working Group (DC2)

SUPPORT:

Carbonbuilt

Institute for Carbon Manangement

OPPOSITION:

None received

ARGUMENTS IN SUPPORT:

According to the sponsor, the Decarbonized Cement & Concrete Working Group (DC2):

“DC2 is a coalition of innovative companies leading the global effort to reduce carbon emissions from cement and concrete. Our seven founding members—Biomason, Blue Planet Systems, Brimstone, CarbonBuilt, Chement, Fortera USA, and Sublime Systems—are pioneering, U.S.-based venture-backed climate technology companies dedicated to delivering ultra low-carbon, carbon-neutral, and carbon-negative cement and concrete solutions. Collectively, our technologies rethink production processes and feedstocks, introduce novel materials, and utilize or sequester CO2 directly in concrete—all with a goal of decarbonizing the cement and concrete sector.”

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