The global cement industry makes 1.6 billion tonnes of cement every year, surpassed only by steel production. Of that total, 500 million tonnes are made in China. Many of the major cement companies making the remaining 1.1 billion tonnes are from Europe, and they have investments in more than 30 countries around the world. For example, the Swiss company, Holcim, has investments and cement plants in 38 countries, and the French company, Lafarge, is in 32 or 33 countries.

Tackling Pollution Head-On

In China, only about 60 million tonnes, or 10 percent, of cement is produced at plants with modern facilities. The other 440 million tonnes are made in older plants, which typically spread cement dust everywhere. Taiheiyo Cement has built a modern cement plant near the airport of Dalian in northeastern China. This plant releases almost no dust. However, other factories around our Dalian plant are emitting vast quantities of pollution and this is something of great concern to us all.

The cement industry in Japan is second only to thermal electric power plants as an emitter of carbon dioxide, a greenhouse gas. You can't make cement without emitting CO2, so it is the cement industry's fate to have these emissions. In the context of today's problems of CO2 emissions and global climate change, Japan's key emitters include electrical power plants, vehicle exhaust, the activities of the average citizen, and industry overall. It is sobering to think that the cement industry, again, second only to thermal power plants in CO2 emissions in Japan, is part of a global industry that makes 1.6 billion tonnes of cement a year. It is no surprise that cement production is an important issue when we talk about global warming.

I'd like to leave that discussion aside for a moment and talk about my own personal experience in my company so far. I graduated from university in 1952 and went to work at Onoda Cement (which later evolved into Taiheiyo Cement). You might know that from the mid-1960s to the mid-1970s, Japan witnessed four great pollution lawsuits - court cases about compensation for victims of the Minamata Disease in Kumamoto, Itai-Itai Disease in Toyama, the second case of Minamata Disease in Aganogawa, Niigata Prefecture, and Yokkaichi asthma caused by a petroleum industrial complex in Mie Prefecture. It was with those cases that Japanese industry, particularly the materials industries, first collided with pollution problems.

I too encountered problems at the plant in Ofunato, Iwate Prefecture. At the start of July one year, typical rainy season clouds hung low around the mountain behind the factory. Caustic lime that had not undergone complete combustion in the plant was emitted from the stack over the course of about three hours and found its way into these clouds. The problem was caused by an operational error. The clouds hung at the base of the mountain with the mist, and as a result, lime was deposited on the crops. The skins of fruit, eggplants, tomatoes and other crops quickly took on a wrinkled appearance. The fresh color of apples completely disappeared. Also, because it was a dairy farming area, the cows and sheep that ate the grass developed severe diarrhea. This was all caused by just three hours of emissions.

Because we didn't fully understand why this all happened, we investigated the cause in cooperation with the agricultural department of Iwate University. If you experience this kind of thing yourself you will understand that in this industry, production experts usually take center-stage, and manage things in the best way they know how. But by even what seems to be just a little mistake, you can end up causing considerable damage. At the same time, you learn that cleaning up after a mistake is not an easy thing to do. You also learn that the loss of public confidence from such an event is huge. With that incident, I personally experienced those things and I remember thinking at the time that environmental or pollution problems would some day become big issues in Japan. As I expected, from the mid-1960s to the mid-1970s, pollution problems erupted all over Japan.

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Russia gave us the idea of making cement from waste

The next story is about the relationship between a power utility named Chubu Electric and my company. Years ago, Chubu Electric was to build a thermal power plant in Owase, Mie Prefecture, which faces the Pacific Ocean. This thermal power plant was to burn coal to make electricity, and if you burn coal you create coal ash. At the same time, oxides of sulphur are emitted from the stack. This means that you must recover the sulphur to reduce pollution. In order to recover the sulphur, my company is manufacturing pulverized limestone as a desulfurizing agent, and we supply that limestone to Chubu Electric. To recover the sulfur Chubu Electric installs desulfurization equipment in which the limestone reacts with the recovered sulphur to create gypsum. The gypsum is then taken as a raw material for making cement. But what about the coal ash?

Coal ash is usually landfilled. In many cases, thermal power plants are located along coastlines, but if you dump the ash into a landfill site along the coast, the next thing is you run out of landfill capacity. You may also end up having to pay compensation to the fishing industry. So if you want to keep running your power plant you will have to dispose of your coal ash somehow. Well, it so happens that our inland plant at Yokkaichi in Mie Prefecture takes all of that coal ash and now uses it as a raw material to make cement. In other words, between Chubu Electric and Taiheiyo Cement, we have an arrangement whereby my company handles the waste that Chubu Electric creates to keep producing electricity. We see this concept, of taking the waste products from one industry and transforming them into products for another, as the basic idea behind "zero emissions."

It so happened that our research department was sending researchers to, what was at that time, the Soviet Union. What they found was that the country didn't really have much of a cement industry. By investigating further, we found that the problem was the lack of raw materials. But because there were not enough raw materials available, they were taking garbage, or whatever they could find, and making cement with it. We were told that this cement was very high in iron content and I thought, "Eureka!". This was the start of our idea to make cement from garbage. At that time, there was also talk in America about making cement from garbage. From this inspiration, I proposed that making cement using waste would be the future of the cement industry.

In our research department we spent ten years studying if it was feasible to make cement using garbage. The outcome is what we call "Ecocement". Cities in Japan take household waste and incinerate it in incinerators and then the incineration ashes are landfilled which then became a problem. Our society's typical way of dealing with the garbage that people throw out is not exactly the best. If you first incinerate it, you get ashes. In that process, dioxins are broken down the first time. But next is the cooling process and if you recover the dust from that process, in it you will find that dioxins have re-synthesized themselves. They are then carried in the ash and fall on the environment. In fly ash you will normally find a lot of dioxins. Local governments tell operators to dispose of the dioxin-laced ash separately although actually there is no practical way to handle it separately. So, in some cases everything is simply trucked off to the landfill, all mixed up together.

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Ecocement: Extending the Life of Landfills

So, the question is how to handle the two types of ash. The biggest feature of our cement plants is that we put this ash into our kilns. The internal combustion temperature is 1,450 degrees Celsius. If you raise the temperature that high, dioxins are completely broken down. Next, we apply a rapid cooling process, by which almost no dioxins are generated. With this process was born the idea of making what we call "Ecocement". To make Ecocement it is also necessary to remove heavy metals from the process.

We asked Akiko Domoto, the governor of Chiba Prefecture, for approval to build an Ecocement plant in Ichihara City and it is operating today. At the Ecocement plant in Ichihara City we collect the incineration ash from Chiba Prefecture's Ichikawa City, Matsudo City and Chiba City, remove the heavy metals, and then "cook" the cement in the kiln. In effect, we are making cement from urban garbage. Chiba Prefecture is running out of capacity to handle all of its household waste within the prefecture and so are transferring the garbage to other prefectures. Taiheiyo Cement has been taking a part of the garbage and transforming it into cement. The same phenomenon is happening in Saitama Prefecture and Nara Prefecture. Basically, cities that are not near a coastline or where there is not enough space to dispose of waste are running out of places to put their garbage.

Japan is a relatively small country and therefore lacks the space to throw things away. England is also relatively small as countries go, but it also has a relatively small population and there are still places in the suburbs available for the disposal of waste. By comparison, the United States is a huge country and so they are really using landfill as their main approach. But this approach is not possible in Japan. I think the city of Tokyo is a good example of Japan's situation. Landfills in Hinode City and the Santama area of Tokyo have only enough space for another ten years, even with proper waste pre-treatment. But if we build an Ecocement plant for them, the life of landfills could be extended to 20 or 25 years. In Japan, this is our only solution to the shortage of landfill space. Some people may be more optimistic about this but basically "the writing is on the wall" for landfills in this country.

Japanese society has problems in a number of ways. We are at the point now that we must question some of the problems that have become interlaced with environmental problems such as the vested interests that have emerged, at least since the Second World War. For example, what about the problem of transferring garbage from Tokyo to other prefectures because there is no longer any place to dispose of it here? This is the cause of illegal dumping around the country. This problem has also occurred in other countries and grown into a major issue. Under the Montreal Protocol, the transfer of industrial waste between countries is now prohibited. Although there is some dispute about the definition of industrial waste, in Japan, waste is constantly being transferred within and between prefectures. The vested interests of transportation and waste treatment companies are also part of the story. Also, successive governments have chosen to ignore the problem, to the extent that for example, 700,000 tonnes of garbage has piled up on the border between Aomori and Iwate prefectures. The perpetrators are able to escape through legal loopholes. If we don't change this whole situation we won't be able to solve environmental problems in Japan.

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The Cement Industry Crosses Over into Waste Management

Our research department resisted at first when I asked it to look into the idea of putting garbage into cement. I was told that cement cannot be used if it is high in chlorine. But that was not the point. The point was that the department's job was to conduct research and find the best way to remove chlorine. In the past, there was no concept of making cement from garbage. But if you look at it today, our research department is conducting exhaustive research into ways to remove chlorine and heavy metals, etc., and I sense that in the future, Japanese technology will make some great advances in environmentally friendly waste treatment technologies.

Our approach is that even if the process is still expensive, we should burn waste to make cement. The fact that we are stepping beyond the normal definition of the cement industry in this way, crossing into the domain of waste treatment, leads to a fair amount of shakeup in business routines. This is true also in the United States and this topic also became an issue at the recent G8 economic summit. However, there are fairly large differences in thinking between the United States, Europe and Japan. For example, in the United States there is a strong aversion for air pollution and air pollution problems turn into court cases. In a way it may be no surprise, therefore, that landfill is the central method in that country. But in America's waste management industry, intense merger and acquisition activity is creating some industry giants. A Chicago-based waste management company is now the number one in the industry in that country and it is now expanding into waste management on the global stage. At that company's core is landfilling, not incineration. I have visited a landfill in a Chicago suburb and saw that they are doing a thorough job with water quality management. They also conduct a fair amount of research into the use of landfills after they become full.

What caught my eye was the transparency of information. Information disclosure is one of the most important fundamentals of environmental industries. The Chicago company is expanding overseas as far as Hong Kong and Malaysia, but if you visit their research department, you will see that 24 hours a day the company is displaying all its information on landfill water quality. This openness plays a very important role.

The United States is strict when it comes to air pollution. At state level you will find that there have been many lawsuits and compensation cases related to landfills. My company has three cement factories in the western states - one in Arizona, one north of Los Angeles in Colton, and one in the Mojave Desert. They are profitable, and we're happy with that. But let me give an example of how regulations affect us. There is a mountain near the Colton plant and a rare species of small flying insect lives at the top of the mountain. Because quarrying is prohibited in places where these flies live, we must obtain our limestone from elsewhere. Also, because blasting could disturb them, we conduct no blasting. In short, the state regulations are strict.

So, although the United States pulled out of the Kyoto Protocol, in various ways the environmental controls inside the country are still very strict. Another example is the handling of medical waste. There are reportedly 100,000 medical doctors in the United States and they produce a huge amount of medical waste, which is being handled by three companies. Controls are stringent, to the extent that a system is in place to have all this medical waste collected in numbered containers, and computers are used to trace the movement of every container. I don't think such a system exists in Japan.

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Who's Job Is It to Change the Government's Thinking?

In addition to strict laws, Europe has non-governmental organizations (NGOs) - international groups like the WWF, Greenpeace and Friends of the Earth. The center of their activities is in Europe, not the United States. Instead of the government, it is often NGOs that are influencing corporate behavior. Companies in industries like cement production cannot operate without some kind of interaction with NGOs.

The NGOs are getting stronger and, in the European Union, environmental regulations have also become fairly strict. As one example, strict regulations are meant to control BSE (mad cow disease). I have seen a factory in Germany that does this, but in Japan all cement factories are now also using bone powder from cows. When the BSE problem arose in dairy products in Osaka, Taiheiyo Cement handled all of the waste from those products at our Kyushu plant. This raised quite a furor, but the material was transported by a trucking company in tightly-sealed containers to Kyushu, dropped off at the plant and, still in containers, carried inside the plant and incinerated. All bone powder from cattle in Japan is now being incinerated in the cement industry.

I think that Japan has reached a turning point. One big issue has to do with expanding the administrative powers of local governments. The way things are today, with narrowly defined lines of authority of local governments, we find that environmental business is nearly impossible. Single municipalities will find it impossible to handle environmental waste management within their limited budgets. In Chiba Prefecture, for example, it is a huge amount of work to collect household waste from the cities of Ichikawa, Funabashi, Matsudo, and Chiba. Inspite of legislative difficulties and that it is not our traditional business, it is becoming our work to collect this waste and turn it into cement. This is an issue that elected members of government must address. In the case of Japan, this is one important key.

Second, there is a big problem with the central government's way of handling things. All the ministries are very territorial, whether it be the Ministry of Agriculture, Forestry and Fisheries, the Ministry of Economy, Trade and Industry, the Ministry of Health, Labour, and Welfare, or whatever ministry. We have to plead our case to each one separately. I am now the chairman of Korea's Ssangyong Cement Company, and we are thinking about taking fly ash from coal burning power stations in Japan and mixing it with cement made in Korea. I say we're "thinking about" it because we can't do it yet. Of course, there is no technical problem with using this as a raw material, there is no pollution problem, and this material is already being used in Japan. But when you start to talk about exporting it, it's a big issue. After about a year, the Japanese government at last reluctantly gave us permission. Perhaps the factors were not fully understood in Korea, but approval was granted there without any problem. This whole issue arose because of the Montreal Protocol stating that industrial waste must not be transferred. This is not just an issue for Japan alone, but in northeast Asia the day will come that China, North Korea, South Korea and Japan will have to cooperate more. Of course it is not only on environmental issues, but that day when we must cooperate more will certainly come. Particularly for Japan, this will be important.

Today in Europe, NGO power is very strong. European cement manufacturers say that they cannot do business unless they cooperate with NGOs. But this is not the case in the United States. NGOs are not as strong there. Citizen power there is based more on lawsuits and when citizen power is as strong as that, the state governments' decisions are very quick. In this sense, corporate activities are being kept within certain boundaries

But NGOs in Asia are still quite undeveloped - environmental NGOs in particular. The Japanese government says that we should "use the power of Japan's NGOs", and this may work with issues such as the rebuilding of Afghanistan after war, but not with environmental problems. They just don't have a lot of influence. In Japan the thinking and awareness of the government is important. The question of how to change this is a challenge posed to everyone. The most important thing is WHO will change the government's thinking. If the government's thinking does not change, there will be no fundamental solution to environmental problems.

Also important is that compared to Japan, the power of politicians is greater in China, Korea and southern Asia. Without political power, NGOs or other bodies will not solve problems. In one sense, in many cases they are only working for self-satisfaction on limited issues. That is simply not enough. The real issue is how to influence the overall political debate.

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"Has Taiheiyo Cement Gone Too Far?"

Ten major cement companies got together with the idea that it would be good to have a global perspective and tackle problems together. The World Business Council for Sustainable Development (WBCSD) is a collection of industries around the world working toward sustainable development. About 160 companies are involved, including about 20 from Japan, and Taiheiyo Cement is the only one from this country's cement industry. The WBCSD is trying to reconsider from a fresh perspective what industries must do to survive in the twenty-first century.

One of the sector projects in the WBCSD is the Cement Sustainability Initiative (CSI). Ten of the world's major cement companies that form the core members of the CSI have been discussing long-term solutions to achieve sustainable development of the cement industry. Although they face different circumstances in each country, they have taken the approach of working together on environmental issues. It is the EU headquartered members that are making a particular effort to promote this initiative and they were anxious to proceed. So we held discussions for about a year and a half to define what sustainability means for the cement industry and developed documentation describing some basic thinking on where the industry should go in the future. Japan's 12 or 13 cement manufacturers also needed to get together in a similar way to create some guidelines dealing with environmental problems. In the case of Japanese operators, including Taiheiyo Cement, there is considerable interest in tackling the issue of handling waste as well as other topics. The Japanese companies were able to cooperate with each other in discussions, consider the topics at a global scale and summarize our proposals in a pamphlet. The companies that form the CSI have agreed to play a central role in spreading these ideas worldwide.

I think that there are some differences between the environmental problems that I am facing and those faced by the people in the other companies. One of the trends in advertising in Japan is that we often see companies claiming to be "environmentally friendly." I don't think this is a bad thing in itself. But it is not enough for just one sole company to be environmentally friendly, no matter how much it tries to defend itself, saying to customers "just choose us, our company can solve environmental problems alone". I think that environmental problems are by no means a problem of just one company and there is no point in trying to say that "just our company is doing it". If companies don't clear away obstacles and work together, there will be no solution to today's environmental problems.

So, from now on, when it comes to environmental issues, companies must open their eyes more. This is a no small matter. It relates to the transparency that I mentioned earlier and companies must be prepared to fulfill their social responsibility. We have created an Ecocement plant in Chiba and are starting to provide various services to local governments. In one sense, we are ignoring conventional business wisdom to get into these activities to the extent that one business commentator recently asked, "Has Taiheiyo Cement crossed the Rubicon?". In other words, by crossing over into the environmental business, are we going past the point of no return, gambling with the company's survival? Perhaps yes, perhaps no. But the world cannot count solely on the information technology revolution to solve all its problems, as some people seem to believe. In the future, companies cannot survive without taking some courageous steps into new territory.

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