Heidelberg Materials : Key EU Policy

Pioneering the green built environment in the 2024 European elections

heidelbergmaterials.com

Heidelberg Materials is a leading global manufacturer of building materials, specialising in aggregates, cement, and ready-mixedconcrete, the second most used material in the world after water.

Our key policy priorities:

1		Set-up a Clean Tech Deployment Fund to secure
	adequate funding
2		Enable the full potential of CCUS technologies
	to support climate action
3		Support massive roll-out of renewable
	and alternative fuel infrastructure
4		Facilitate procurement of low carbon and
	circular construction products
5		Ensure an effective and water-tight Carbon
	Border Adjustment Mechanism (CBAM)
6		Mitigate the impact on Europe's nature
	and biodiversity

Recognising the role of the cement and concrete industry in meeting the EU's climate ambition and making cities and infrastructures more sustainable, we have committed to the most ambitious CO₂ reduction targets in our sector.

In line with the Paris Agreement of the United Nations Framework Convention on Climate Change (UNFCCC), Heidelberg Materials pledges to provide net-zero carbon cement and concrete, with a goal to achieve net-zero emissions by 2050 at the latest1.

To achieve this target, we are focusing on a mix of technological solutions, including the increased use of alternative fuels, lowering the amount of CO₂-intensive clinker in cement, product optimisation, increased circularity, and the widespread deployment of Carbon Capture, Utilisation, and Storage (CCUS) technologies across our production sites in Europe.

We are also committed to mitigate the impact on nature by halting and reversing biodiversity loss and implementing further measures in our quarries for a nature positive future.

As a new policy cycle approaches, the EU should focus on the implementation of the Green Deal, accompanied by a comprehensive industrial policy, to ensure the success of a sustainable just transition. Heidelberg Materials aims to champion action on the following key policy priorities that will benefit the building materials sector and the broader EU construction value chain's green transformation.

1. According to SBTi definition. To learn more about HM Climate Policy with more detailed figures for scopes 1-3:here

Pioneering the green built environment in the 2024 European elections

Heidelberg Materials industry-leading Sustainability Commitments for 2030:

400kg CO₂/t

Reduce net Scope 1 emissions to 400kg CO₂ per tonne of cementitious material on average across the Group, equaling a reduction of 47% compared with 1990 levels.

10mtonnes CO₂

Capture 10 million tonnes of CO₂ cumulatively by 2030 through our CCUS projects.

50%

Achieve 50% of our revenue from sustainable products that are either low-carbon or circular.

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1

Set-up a Clean Tech Deployment Fund to secure adequate funding

Heidelberg Materials is taking bold investment decisions, but CCUS projects are still in the early roll-out stage and currently not economically viable. Substantial public support for the deployment of CCUS projects is required, in alignment with ambitions of the Net-Zero Industry Act and the EU Industrial Carbon Management Strategy.

Our recommendations:

• Create a Clean Tech Deployment Fund for energy-intensive industries.
• Redirect a significant portion of EU and national
  Emissions Trading System (ETS) payments of the cement sector towards supporting CCUS projects at clinker installations.
• Combine EU and national support schemes and existing tools in a simplified and streamlined way.
• Allocate remaining resources from the EU budget (MFF 2019-2027) for climate action purposes.

€1.5bn

CCUS: We aim to capture 10 million tonnes of CO₂ cumulatively and invest up to €1.5bn by 2030.

1st

The first industrial-scale CCS project in the cement world located at our plant in Brevik, Norway, is targeting mechanical completion for the end of 2024. It will capture and store approx. 400,000 tonnes of CO₂ per year as part of the Norwegian Longship program.

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Pioneering the green built environment in the 2024 European elections

Pioneering the green built environment in the 2024 European elections

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2

Enable the full potential of CCUS technologies to support climate action

The swift development of national and cross-border CO₂ transport and storage networks is a necessary precondition for its wider deployment. In addition, recognising the benefits of CCU as well as carbon removals - achieved through use of sustainable, waste-based biomass coupled with CCS (BioCCS) - is critical for energy-intensive industries with unavoidable process emissions.

Our recommendations:

• Significantly increase the EU's CO₂ storage capacity target of 50mtpa and complement it with binding targets for 2040 and 2050. This should include onshore storage for plants located at inland locations. The
  UK and Norway's CO₂ storage potential must also be considered.
• Secure a sufficient geographical coverage by coordinating EU and national CO₂ infrastructure and storage planning, developing common CO₂ specifications, and sharing knowledge across regions. Source-to-sink pipelines are most effective, but
  CO₂ transport by ship and rail will also be required.
• Include carbon removals under the EU ETS framework, in the medium term, as the recognition of these technical sinks is also critical for achieving a net-zero status in the EU.
• Acknowledge CO₂ reduction benefits of CCU applications in accounting rules, based on a stringent verification and environmental assessment.
  Thereby, clearly distinguish between unavoidable process emissions from industrial sources and avoidable fossil CO₂.

CCUS

We have announced multiple large-scale CCUS projects globally, with seven CCUS projects in Europe including Anthemisin Belgium, ANRAVin Bulgaria, AirvaultGOCO2in France, GeZeroin Germany and Slite CCSin Sweden.

3

Support massive roll-out

of renewable and alternative fuel infrastructure

The transformation of our sector will lead to a significant increase in the use of decarbonised electricity and alternative fuels.

Our recommendations:

• Facilitate energy-intensive industries' access to an ample supply of renewable and low-carbon electricity at competitive costs. This encompasses both generation capacity and the development of appropriate networks and storage.
• Promote simplified and long-term access to alternative fuels and biomass waste in the EU Member States to support the transition away from fossil fuels, including a ban on landfill.
• Acknowledge co-processing as an efficient waste management solution in the waste hierarchy, combining material recycling and energy recovery in a simultaneous process.

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Pioneering the green built environment in the 2024 European elections

Pioneering the green built environment in the 2024 European elections

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4

Facilitate procurement of sustainable and circular construction products

Introducing material-neutral tendering and green public procurement processes can enhance acceptance and increase the adoption of sustainable products, including for recycled construction materials.

Our recommendations:

• Introduce a comprehensive EU sustainable products strategy to foster lead markets for low or net-zero carbon as well as circular products.
• Remove regulatory, technical, and economic barriers to the use of recycled building materials so that they can be brought to the market under similar conditions as primary raw materials.
• Consider emissions across the entire life cycle of a construction product when calculating the carbon footprint of new buildings and give priority to products with lower embodied carbon and equivalent operational performance.
• Promote a smoother and faster standardisation process for low-carbon cement and concrete products, in alignment with the new Construction Products Regulation.

Two global product brands showcasing our leading role in carbon reduction and circularity:

for low-carbon and circular products, with each having to meet strict requirements to become part of the range. As first company in our industry, Heidelberg Materials is using globally standardised criteria to label its sustainable products.

for the world's first carbon captured net-zero cement enabled by CCS technology.

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Pioneering the green built environment in the 2024 European elections

Pioneering the green built environment in the 2024 European elections

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5

Ensure an effective and water-tight Carbon Border Adjustment Mechanism (CBAM)

Sectors covered by CBAM, including cement, should experience a seamless implementation phase from 2026.

Our recommendations:

• Ensure a smooth implementation of CBAM as a critical tool to level the playing field between
  EU and non-EU suppliers and to advance the decarbonisation of the cement industry.
• Prevent and address potential fraud related to misstatements or false declarations in cement standards before the operational phase of
  CBAM begins in 2026, given the significant increase in imports from non-EU countries in the EU cement sector.

6

Mitigate the impact on Europe's nature and biodiversity

The built environment plays a pivotal role in either preserving or degrading biodiversity. Its impact on nature should be mitigated through targeted measures across the lifecycle of buildings.

Our recommendations:

• Support ambitious EU targets to restore at least
  20% of the EU's land and sea areas by 2030, and all ecosystems in need of restoration by 2050.
• A holistic approach to spatial planning and robust environmental safeguards, optimising space for human activity and proactively assessing ecological impacts for the transition to a net-zero economy.

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Pioneering the green built environment in the 2024 European elections

Pioneering the green built environment in the 2024 European elections

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Heidelberg Materials AG Berliner Strasse 6

69120 Heidelberg Germany heidelbergmaterials.com