The building materials group Heidelberg Cement has warned of plant closures in Germany.

If the price of electricity does not fall permanently, the company will have to take one or the other plant completely off the grid, and it has prepared for that, said CEO Dominik vonAINTH.

According to him, the group has bought the majority of the electricity in the long term, but the company has to get the rest on the spot market in the short term.

The high energy prices urgently need to be reduced.

"In Germany and Europe there are real question marks behind the locations."

Bernd Freytag

Business correspondent Rhein-Neckar-Saar based in Mainz.

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According to CFO René Aldach, Heidelberg Cement assumes that energy costs will increase by one billion euros to 3.1 billion euros in the current year.

The company has developed its own savings scenario for each plant.

Since the systems can be operated very flexibly, parts of the production are already shifted to the weekend when the electricity price tends to be lower.

Without an electricity price cap, if possible Europe-wide, there would be no peace in the market, says the CEO of the company.

It can be observed regularly that energy prices fall as soon as a price cap is discussed.

Von Acht assumes that electricity prices are already being driven by speculation because the federal government buys gas at almost any price.

This problem can only be solved permanently with a price cap.

When asked how high this should be, he named an acceptable range of 150 to 200 euros per megawatt hour.

According to CFO Aldach, the price on the electricity exchange is currently fluctuating greatly, from more than 1000 euros to less than 100 euros per megawatt hour.

Planning is not possible like this.

The hope of the green cement

Heidelberg Cement is the second largest cement manufacturer in the world, as well as the second largest producer of concrete and aggregates such as sand and gravel.

The group operates almost 150 cement plants worldwide, ten of them in Germany.

If plants in Germany or Europe close because of the high energy prices, according to von Achts, the quantity would become scarce and the prices for cement and concrete would rise.

Relocating production to cheaper locations is not an issue.

Transporting cement over long distances is uneconomical.

Anyone importing into the EU from outside must also pay a C02 border adjustment.

However, construction projects in Germany would not be jeopardized even if the price of concrete doubled, says vonakhten.

On average, concrete accounts for less than 5 percent of construction costs.

The group, which is currently changing its name to Heidelberg Materials, is pinning its hopes on “green” cement and concrete.

Von Acht assumes that customers are willing to pay significantly more for these building materials if they have no or significantly less carbon dioxide emissions.

Since the majority of the greenhouse gases are released during the production of cement - CO2 inevitably escapes when clinker is burned - Heidelberg Cement is promoting what is known as CCS, i.e. the separation and storage of carbon dioxide.

In its Norwegian plant, the group has started what it says is the largest pilot project on an industrial scale: the CO2 is to be separated there and injected into the seabed.

In 2024, Heidelberg Cement wants to offer the world's first CO2-free cement.

Because transport is expensive, the company wants to credit the CO2 savings to the entire production – similar to the electricity market.

Customers in Germany could also indirectly buy green cement from Norway.

CCS projects of this kind are still receiving significant government funding.

According to Heidelberg Cement, the Norwegian state will bear 80 to 85 percent of the 300 million euros in costs in Norway.

On average, the group expects state aid of around 50 percent in the initial phase of the projects.

CFO Aldach puts the expected costs for the company itself at 1.5 billion euros by 2030. A tonne of cement would be roughly 60 euros more expensive, but the group will then foreseeably save the purchase of CO2 certificates, which are currently about the same cost a lot.

At the moment, however, only a few companies are dependent on purchasing them, they still get the certificates free of charge, but the allocated quantities are gradually being limited.

Heidelberg Cement currently has enough certificates and does not have to buy any.