California´s climate change program & implications for the cement industry

With the passage of the “California Global Warming Solutions Act of 2006” (AB32), California became the only U.S. state to undertake an economy wide climate change program. This Act required the state´s Air Resources Board (ARB) to adopt rules and regulations in an open public process to reduce state-wide greenhouse gas (GHG) emissions to 1990 levels by 2020. In order to achieve the State´s GHG goal by 2020, ARB adopted many direct regulations to reduce GHG emissions and a market based Cap & Trade program. Within the Cap & Trade program, multiple sectors are covered, including, for example, electricity suppliers, transportation fuels suppliers and the industrial sector (which includes, among others, all cement plants in the state). The Cap & Trade program goes into effect on January 1, 2013. This paper will provide relevant background information on the cement industry and an overview of California´s climate change program with particular focus on the Cap & Trade program and how the cement industry will be regulated.