Is a cement crisis looming in Sweden for the end of the year?

An environmental court rejected the application to mine limestone in Sweden’s largest cement plant. The industry predicts billions of losses, a halt of construction and thousands of jobs at risk.

Construction of houses in Sweden may be stopped in November
Most constructions of houses in Sweden may be stopped in November because of shortage of cement | Stockholm, Jon Flobrant

On July 6, the Swedish Supreme Land and Environmental Court decided not to accept Cementa’s application to renew its permit for mining in the cement production plant of Slite in Gotland, the country’s largest island in the middle of the Baltic sea.

The plant provides 75% of the cement in Sweden and the industry already predicts a massive shortage in November, a halt on most constructions, losses of SEK 20 billion (US $2.3 billion) per month, and thousands of jobs at risk.

Cementa, part of the giant German building materials group HeidelbergCement, is the largest and only manufacturer of cement in Sweden. It has only two extracting plants in the country, and limestone quarries in Slite provide, according to the industry, 75% of the cement for the territory. The second site provides about 5% of the cement and is close to maximum capacity. The rest, between 10-15%, is imported.

But it may soon be impossible to extract anything in Slite as the Supreme Land and Environmental Court of Sweden decided not to process the renewal of the mining permit, because of shortcomings in the company’s assessment of the impact of the activity on groundwater.

The right to extract cement expires on October 31 and was to be renewed for another 20 years, until 2041. But mining may stop on November 1.

The mining permit challenged by environmentalists and the local government authority

Sweden environmental court didn't validate the renewal of the permit for cement extraction in Slite
Sweden environmental court didn’t validate the renewal of the permit for cement extraction in Slite | Cementa communications

In 2020, the Court approved the permit but the original decision was challenged by the Swedish Environmental Protection Agency, the County Administrative Board of Gotland, the local government authority, and “a number of environmental organizations and private individuals“.

The plaintiffs claim the activity disturbs the nearby 928 km2 (328 square miles) of groundwater and deteriorates the protected aquatic ecosystem. The Court then considered the environmental impact assessment made by Cementa insufficient to clear uncertainties on the consequences of the activity. As such, “encumbered with significant shortcomings“, the Supreme Land and Environmental Court felt not able to take a position and decided to reject Cementa’s application for a mining permit at Slite’s plant.

In 2016, the associations had already asked to revoke the permit for the damage caused to the Natura 2000’s protected area and the “inconvenience to nearby residents“. The Court had found the conditions were met so that the activities could be authorized.

Slite presented as the future first carbon-neutral cement plant

The decision comes after HeidelbergCement Group announced in June 2021 the ambition to make the site of Slite the world’s first carbon-neutral cement plant.

On its website, Cementa presents Slite as one of the most environmentally friendly factories of Europe, giving jobs on-site to about 230 people.

The cement industry is an important producer of carbon, mostly due to the way limestone is processed. Rocks are crushed and burned to extract calcium, the binding agent to produce cement, while small balls of carbon emerge, the clinkers, leading to CO2 emissions.

Cement accounts for 4% to 8% of global carbon emissions (whether the energy used to produce cement is taken into account). Cementa’s activity in Gotland is alone responsible for about 3% of all of Sweden’s carbon footprint.

Cementa's group has just announced its plant in Slite would become carbon neutral in 2030
Cementa’s group has just announced its plant in Slite would become carbon neutral in 2030 | Cementa communication

Cement is essential for the construction industry, accounting for 11% of Sweden’s GDP

On July 22, the company decided to appeal the decision and now warned that “Sweden is heading for an acute shortage of cement at the end of November“, shortly after the authorization expires.

While environmentalists approve the decision, the construction industry, which accounts for 11% of Sweden’s gross domestic product, argues a crisis is looming.

It predicts “extensive disruptions in ongoing infrastructure projects” and, as imports could not provide enough cement in such short notice, “the construction of 3 in 4 new homes will be stopped from the second half of November“.

Byggföretagen, the Swedish Construction Federation, a trade association representing private construction companies and employers, considers major infrastructure projects are already delayed and claims that SEK 20 billion (US $2.3 billion) of investment will be lost per month, threatening 150,000–200,000 jobs in the construction sector.

The C.E.O. of Byggföretagen and the chairman of the Business Committee met Ibrahim Baylan, the minister for Business, Industry and Innovation. But the recent discussions disappointed the construction representatives, who already hoped for a concrete plan to save the extraction.

The industry warns a shortage of cement puts 200,000 jobs at risk in Sweden | Cementa communications

The government likely to respect the court’s decision

But the government remains cautious.

Answering questions from members of parliament, the minister of industry wrote on July 29 to recall that, so far, the court was not able to take a position and “didn’t consider the application on merits“. He added he couldn’t comment on justice decisions or ongoing cases but initiated “a ministry-wide work to follow the issue and analyze the consequences that may arise. The government also has ongoing contacts with the company as the situation develops“.

Earlier in July, he had also told Dagens industri that “one has to work within the framework of the existing laws. And if the verdict stands, the business must cease“.

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