Holcim and industrial gas company Air Liquide have announced a cooperation for CO2 capture in Belgian cement production. The project marks a concrete step in the decarbonization strategy of the construction industry and could have signaling effects for other cement manufacturers. But how realistic is the technical implementation, what economic framework conditions are required, and what does the development mean for competition in the European cement industry?
Why Carbon Capture is Indispensable for the Cement Industry
Cement production causes approximately eight percent of global anthropogenic CO2 emissions worldwide. The majority does not result from energy consumption, but from process-related emissions during clinker production. When limestone is burned at around 1,450 degrees Celsius, it releases chemically bound CO2 – a thermodynamically unavoidable process. Even with complete electrification of kilns and use of renewable energy, these process-related emissions cannot be eliminated. This is precisely where Carbon Capture and Storage (CCS) comes in: the technology is intended to capture CO2 directly at its source, liquefy it, and then either store it permanently or use it for industrial applications.
For cement manufacturers like Holcim, CCS is therefore not an optional addition but a technological necessity to achieve the EU's climate targets. The European cement industry is under massive regulatory pressure: EU emissions trading is tightening, free allowances are running out, and the CO2 border adjustment mechanism (CBAM) will increase the price of imported building materials from 2026 onwards. Those unable to demonstrate an effective decarbonization strategy will be pushed out of the market in the medium term.
The Belgian Pilot Project: Technology and Dimensioning
The cooperation project between Holcim and Air Liquide in Belgium aims to capture CO2 from the exhaust gases of a cement plant and prepare it for transport. Air Liquide brings expertise in gas separation and liquefaction, while Holcim provides industrial infrastructure and process knowledge from cement production. This collaboration is typical for CCS projects: cement manufacturers rarely have the necessary expertise in chemical process engineering, while industrial gas companies do not operate their own emission sources.
Technically, two CCS processes are possible in the cement industry: post-combustion capture, in which CO2 is extracted from diluted flue gases, and oxyfuel combustion, in which pure oxygen is used instead of air to produce a more concentrated CO2 exhaust stream. Both processes are energy-intensive and require significant investments in new system components. The post-combustion variant has the advantage that it can be retrofitted to existing plants without fundamentally rebuilding core processes.
The dimensioning of the Belgian project is not known in detail, but modern cement plants emit between 0.5 and 1.5 million tons of CO2 per year. Even if only 50 percent of emissions are captured, considerable quantities result that must be transported and stored. This reveals a central challenge: CCS does not end at the factory gate but requires a complete value chain from capture through transport to storage or use.
Infrastructure and Logistics: The Bottleneck of Decarbonization
CO2 capture is technically manageable, but the downstream infrastructure is missing in large parts of Europe. For large quantities, pipeline transport is the most economical solution, but a comprehensive CO2 pipeline network does not yet exist in Europe. In Belgium, there are considerations to transport CO2 by ship to geological storage formations under the North Sea – a model also pursued by projects in the Netherlands and Norway. However, such transport chains are complex, demanding from a regulatory perspective, and require significant investments in ports, liquefaction facilities, and storage infrastructure.
Alternatively, CO2 can be used as a raw material in the chemical industry, for synthetic fuels, or in building material production (Carbon Capture and Utilization, CCU). However, industrial demand is limited, and many CCU applications release the CO2 again after a short time, so they do not achieve lasting climate impact. For the cement industry, geological storage (CCS) therefore remains the more realistic option for permanently reducing emissions.
Economic Viability: Costs, Funding, and Competition
Installing CCS plants significantly increases production costs. Estimates range from 50 to 100 euros per ton of captured CO2, depending on plant size, CO2 concentration in the exhaust, and energy supply. For a typical cement plant, this corresponds to annual cost increases in the tens of millions of euros. Without external funding or CO2 prices significantly higher than today's ETS prices, such investments are not profitable.
In the EU, there are various funding programs for CCS projects, including the Innovation Fund and national instruments such as Carbon Contracts for Difference, which offer companies long-term price certainty for avoided emissions. Belgium and the Netherlands have also included CO2 transport infrastructure in their industrial strategies. However, the funding gap remains substantial, and many projects are stuck in the planning phase because economic framework conditions are unclear.
For Holcim, the Belgian project is a test run for scaling CCS in other markets. The company has already made clear in previous announcements that decarbonization can only be managed with government support and clear regulatory framework conditions. Holcim's decarbonization challenge is exemplary for the entire industry: technically feasible, but economically viable only under certain conditions.
Significance for Competition and the Industry
If Holcim and Air Liquide successfully put a CCS facility into operation, it creates a competitive advantage over manufacturers unable to reduce their emissions. Within the framework of EU emissions trading and CBAM, low-CO2 building materials will become increasingly competitive. At the same time, pressure increases on other cement manufacturers like Heidelberg Materials, CEMEX, or Buzzi to start similar projects.
Technological leadership is not merely a matter of marketing but has direct impacts on market positioning. Large projects and public contractors increasingly specify CO2-reduced building materials, and suppliers without demonstrable decarbonization strategies are excluded from procurement processes. With projects like the one in Belgium, Holcim positions itself as a technology leader and attempts to set standards that put other competitors under pressure.
For smaller and medium-sized cement manufacturers, the development becomes an existential challenge. CCS plants are only economical above a certain operating size, and investments cannot be made without external funding for many companies. It is foreseeable that decarbonization will lead to further consolidation of the cement industry, similar to what can be observed in other capital-intensive sectors.
Regulatory Opportunities and Political Uncertainties
The regulatory framework conditions for CCS in Europe are in flux. While the EU fundamentally recognizes CCS as part of its climate strategy, individual member states still have reservations, particularly regarding geological storage. Belgium faces the challenge of creating social acceptance for CO2 transport and storage while simultaneously industrial policy interests demand rapid implementation.
Another regulatory issue is the creditability of CCS in emissions trading. Currently, there are discussions about whether captured and stored CO2 can be fully deducted from emission obligations or whether leakage rates and transport emissions must be considered. Such details have significant impacts on project profitability and influence investment decisions.
Political uncertainties also arise from different national strategies. While countries like Norway, the Netherlands, and Belgium actively build CCS infrastructure, other EU states are more cautious. This fragmentation complicates cross-border projects and hampers the development of a European CO2 transport network.
Outlook: CCS as a Bridge Technology or Permanent Solution?
The question of whether CCS is a bridge technology or a permanent solution for the cement industry remains open. Some experts argue that in the long term, alternative binders and circular economy approaches could partially replace Portland cement production. However, concrete based on cement will remain indispensable for decades to come, and CCS remains the only technology to eliminate process-related emissions.
The Holcim and Air Liquide project in Belgium is therefore more than just a pilot project – it is a litmus test for the decarbonization strategy of the entire industry. If CCS can be scaled economically and technically, the cement industry will become a central pillar of industrial decarbonization in Europe. If the model fails due to costs, infrastructure, or acceptance, the industry will face fundamental transformation pressure that goes far beyond technological adjustments.
For purchasers, planners, and operators in the construction industry, the development means that CO2-reduced building materials will become increasingly available – but at higher costs and with more complex supply chains. The sustainability strategy between climate protection and cost reality thus becomes the central question of the coming years, not just for cement manufacturers but for the entire construction value chain.
