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The cement industry is highly exposed to carbon risk, particularly in regions with CO2 emission trading or carbon taxation systems in place. This risk is directly related to the carbon footprint of individual companies, but is also significantly affected by external factors such as the international climate framework (Kyoto and post-Kyoto scenarios), local regulations, and the price of carbon on the international markets.
The Group is managing its carbon risk in two ways:
- reduction of the carbon footprint of its products and production processes (preliminary assessment of the carbon emissions and reduction potential of new acquisitions are also foreseen)
- financial risk coverage.
Scenario thinking, made possible by an accurate emissions tracking system put in place at Group level, is driving the financial risk coverage.
The most appropriate market instruments are taken into account, such as participation in Carbon Funds and access to the carbon derivatives markets.
In addition, the development policy, through the diversification of countries and operations, allows reduction of risk exposure in Europe, while also offering opportunities for developing carbon reduction projects that may be eligible as Clean Development Mechanism (CDM) projects under the Kyoto Protocol.
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