The investment will represent the largest investment into Ukraine’s cement industry.
Ukrainian industry continues to invest in energy efficiency and carbon-emissions trading under the international Kyoto agreement, with foreign-owned enterprises increasingly placing their bets on expensive upgrades.
CRH plc, a global producer of building materials headquartered in Dublin, announced on March 29 that it would invest $280 million into new state-of-the-art technology at a major cement plant that it owns in the west Ukrainian town of Kamenets-Podilsky.
The investment will represent the largest investment into Ukraine’s cement industry. Yevhen Groza, an analyst at Point Carbon, a global carbon-market consultancy, said it is also the first joint-implementation project entirely approved under the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which Ukraine ratified in 2004.
Under the project, $187 million will be spent on replacing an existing three-million-ton per annum wet process plant with a new state-of-the-art dry process cement plant.
The new plant “will have the potential to reduce emissions of CO2 in Ukraine by up to 3 million metric tons by 2012,” reads a press release by CRH, which has been operating in Ukraine since 1999.
The Irish company committed to invest an additional $100 million to modernize the plant’s existing cement milling capacity and infrastructure.
“This project is an important milestone in the abatement of emissions under the Kyoto Protocol and a clear sign of CRH’s commitment to reducing specific CO2 emissions across its operations,” CRH Chief Executive Liam O’Mahony said.
CRH, which has operations in 27 counties and posted $25 billion in sales in 2006, estimates its share of the Ukrainian cement market at about 17 percent.
The Kamenets-Podilskiy plant can produce 3.7 million tons of cement a year, giving it the third largest capacity among cement producers in Ukraine.
“The purpose of the investment is to change the plant’s operations to a completely brand new cement line, which will have the combined effect of reducing energy requirements and reducing emissions,” said Declan Maguire, CRH Regional Director for Central and Eastern Europe.
Another foreign-owned Ukrainian enterprise seeking to invest in efficiency under the Kyoto Protocol is the ISTIL mini-steel mill in Donetsk Region.
ISTIL inked a deal on Feb. 13 this year to sell the European Bank for Reconstruction and Development (EBRD) its surplus greenhouse gas emissions in another joint-implementation project.
According to the joint-implementation project, ISTIL, founded by Pakistani businessmen who studied metallurgy on Ukrainian turf during Soviet days, will invest $45 million into energy efficiency as part of an $85 million loan issued by the EBRD.
If the government approves the project, ISTIL will get about $4 million from the EBRD in return for 650,000 emission reduction units, which are equivalent to the tons of greenhouse gas emissions expected to be eliminated at the steel mill over the next five years.
ISTIL’s agreement will only take full effect after it is signed by Ukraine’s Environment Ministry, which has almost 50 other joint-implementation projects lined up for its approval.
Among the five joint-implementation projects that received a green light from the government is state-owned Zasyadko mine, also in Donetsk Region, which has already sold 3.8 million tons of methane emission reduction units for $3.2 million to the Japanese government. Kyoto rules require countries to represent the interests of their companies in such carbon-trading deals. The deal at Zasyadko, which is controlled by Ukrainian deputy Ukhim Zvyagilsky, followed modernization efforts at the mine.
The other four joint-implementation projects that received approval include an electric power plant in Lviv Region, which sold emission reduction units to Austria, a landfill gas-utilization facility in Kharkiv, and a methane-conversion project at a coal mine in Donetsk Region.
