Alternative Fuels for Saudi
Cement Manufacturing with
Time-varying Carbon Pricing
Walid Matar and Doaa K. Filali
June 2022
Doi: 10.30573/KS--2022-DP12
2
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
About KAPSARC
KAPSARC is an advisory think tank within global energy economics and sustainability
providing advisory services to entities and authorities in the Saudi energy sector to advance
Saudi Arabia's energy sector and inform global policies through evidence-based advice and
applied research.
This publication is also available in Arabic.
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© Copyright 2022 King Abdullah Petroleum Studies and Research Center (“KAPSARC”).
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“Document”) shall not be used without the proper attribution to KAPSARC. The
Document shall not be reproduced, in whole or in part, without the written permission
of KAPSARC. KAPSARC makes no warranty, representation or undertaking whether
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or responsibility for the accuracy, completeness, or usefulness of any information that
is contained in the Document. Nothing in the Document constitutes or shall be implied to
constitute advice, recommendation or option. The views and opinions expressed in this
publication are those of the authors and do not necessarily reect the ofcial views or
position of KAPSARC.
3
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Key Points
Saudi cement manufacturers have relied on natural gas, crude oil, and fuel oil to operate their kilns.
There is an ongoing effort to reform domestic fuel prices, which has caused the cement industry to
consider alternative fuels. With this in mind, we study the prospects for using tire-derived fuel (TDF)
and petroleum coke to displace more valuable fuels. We also examine the potential effects of hypothetical
carbon pricing schemes on fuel switching. We employ an optimization model that characterizes the
operational and investment decisions of the cement industry. We look at six policy scenarios that range
from the status quo with xed nominal fuel prices, to the availability of alternative fuels, nancial support
for retrotting existing kilns, and fuel price liberalization with and without carbon pricing. There is a slight
adoption of TDF when other fuel prices remain xed. TDF use only reaches its limit and petroleum coke
is only used when fuel prices are liberalized without a carbon price. Those two fuels are not used when
a carbon price is paired with liberalized fuel prices. If carbon pricing is gradually implemented, cement
manufacturers can arbitrage over time by storing cement. In this case, our results show they over-produce
cement in the early years of production to sell in the latter years.
4
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Summary
After cement production in Saudi Arabia
surged in the rst half of the 2010s due to
the country’s rapid economic development, it
has slowed measurably in recent years as economic
growth has declined. This is shown in Figure 1,
along with the evolution of the Kingdom’s real gross
domestic income (RGDI). Still, it ranks among the
top 10 countries for existing cement kiln capacity
(United States Geological Survey 2019). The Saudi
cement industry has relied on Arab Heavy crude
oil, heavy fuel oil (HFO), and natural gas to produce
clinker, a key cement ingredient.
Figure 1. Cement production and RGDI in Saudi Arabia through the years.
Sources: The Saudi Central Bank (SAMA) (2020); Matar and Gasim (2020).
0
100
200
300
400
500
600
700
0
10
20
30
40
50
60
70
1990 1994 1998 2002 2006 2010 2014 2018
Saudi real gross domestic income
Take over billion U.S. dollars
Cement production in Saudi Arabia
(million metric tonnes)
RGDI
Cement production
The Kingdom is pursuing the reduction of oil use
in the industrial, electric power, and water sectors.
Energy price reform, as detailed in Saudi Vision
2030 (2017), is intended to induce most industrial
consumers of crude oil and diesel to look elsewhere
to fuel their electricity generation and industrial
manufacturing processes. TDF and petroleum coke
are fuels that local cement producers could consider
when displacing their liquid fuel use.
In this paper, we examine the prospects for the
use of shredded scrap tires and petroleum coke as
supplemental fuels in the Saudi cement industry.
Moreover, we look at the impact of different carbon
pricing schemes on the decisions made by the
Saudi cement industry. This paper assesses the
effectiveness of policies to encourage the adoption
of these alternative fuels in Saudi Arabia.
We study the economically viable fuel mix for
Saudi cement plants when TDF and petroleum
coke are introduced during periods of low prices for
competing fuels. A status quo and ve alternative
policy scenarios are examined in the planning
5
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
horizon from 2019 to 2025. Three of them examine
the operation of the cement plants in the absence
of carbon pricing: allowing alternative fuels in the
prevailing domestic fuel pricing paradigm, supporting
the use of alternative fuels by providing nancial
support for any required investment, and changing
domestic fuel prices. The other two explore
liberalizing fuel prices and imposing a carbon price.
In one policy scenario, a hypothetical carbon price
is imposed at a constant rate through the end of the
time horizon. The other scenario is a hypothetical
gradually rising carbon price.
Some 95 million tonnes of TDF are used from 2019
to 2025 if fuel prices are kept the same. Having
external nancial support of $30 million for the
incremental investment necessary for TDF raises
its use by a factor of four over the planning horizon.
TDF is only used to its full capacity in a scenario of
liberalized fuel prices. However, it is not used when
liberalized fuel prices are paired with carbon pricing
schemes. If priced at the value at which Saudi
exported it, petroleum coke is only used when fuel
prices are liberalized.
In terms of pollution, all scenarios without carbon
pricing exhibit 340 million tonnes to 380 million
tonnes of total carbon dioxide (CO2) emissions from
2019 until 2025. The imposition of constant carbon
pricing and fuel price liberalization results in 280
million metric tonnes of CO2. Sulfur oxide (SOX)
emissions are similar in all scenarios that keep
the low, xed fuel prices. SOX emissions declines
when constant carbon pricing supplements rising
fuel prices because of higher investment in more
efcient kilns. Furthermore, the adoption of TDF
when fuel prices are liberalized or retrot support
is offered causes zinc emissions to rise. Under fuel
price liberalization alone, annual zinc emissions are
eight times those of the base case.
Facilitating the use of TDF and petroleum coke
would help alleviate the increased costs resulting
from raising energy prices. The marginal cost
of producing one extra tonne of Portland Type I
cement would be reduced by 40% compared to a
price liberalization scenario that does not allow the
use of those two fuels. Thus, if policymakers wish
to continue raising fuel prices to their international
market levels, using these alternatives would
alleviate the burden of high fuel prices on cement
producers.
Summary Summary
6
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Time-varying Carbon Pricing
A
carbon price, or a carbon tax, has shown
high efcacy when implememented in the
power system (e.g., He et al. 2012; Carl
and Fedor 2016; Newbery 2018). Such a pricing
system may either be implemented in stages or as a
constant value from the start. He et al. (2012) show
that for a power system, a variable-through-time
carbon tax can produce all the emission reduction
benets of a cap-and-trade scheme, but with a much
higher prot. Pereira and Sauma (2020) state that
a multi-stage implementation of a carbon tax avails
the energy regulator some exibility in managing
the political economy. There may be challenges in
adopting a single carbon tax, as it could undermine
the regional or global competitiveness of private
industry (Newbery 2018).
Similar to He et al. (2012), Pereira and Sauma
(2020) study the effects of a two-stage CO2 tax
on the electricity sector versus one that is at.
They nd that a piecewise implementation with
an initially lower rate followed by a higher one is
more cost-effective than a xed rate. Electricity
generation may, however, have unique attributes
that result in such ndings. If the cost of storage is
reasonable, industrial rms can anticipate higher
future costs and choose to over-produce at the
present to meet future demand. For instance,
cement storage could be widely exploited for
long-term planning by cement manufacturers if
present production costs are lower than those in
the future. Also, the levelized cost of electricity
for renewable technologies has been declining
(International Renewable Energy Agency 2019).
It makes sense that CO2 abatement would cost
less in the future for power systems. These two
factors may therefore result in this paper reaching
a different conclusion than those cited above.
7
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
The use of TDF and petroleum coke in
cement manufacturing is not new. TDF has
a high heating value, which has made it an
attractive alternative for global cement companies.
Nearly 50 cement plants in the United States (U.S.)
were burning tires as fuel in 2006, up from ve
in 1988 (PCA 2008). Moreover, German cement
manufacturers used 61% biomass, waste oil,
household waste and tires (The German Cement
Works Association 2012).
According to the PCA (2008), a cement plant in
Texas incinerated up to two whole tires for every
revolution of the kiln. This process allowed the
company to forgo a quarter of its conventional fossil
fuel use. Burning the tires whole instead of shredded
would also introduce iron into the clinker through
the tires steel meshing (Kääntee et al. 2004). This
effect would further add to the benets by reducing
the raw materials needed to be acquired for making
the clinker. Pipilikaki et al. (2005) found that there
are no visible issues with the clinker that is produced
when TDF comprises 6% of the total fuel use. A
local cement company informed us that it has tested
the use of shredded tires. Following this, we use
shredded tires as the basis of TDF in the model.
Tao (2015) states that about a quarter of all global
petroleum coke is used by cement plants. In 2006,
it comprised 16% of the fuel consumed by cement
plants in the European Union (Schorcht et al. 2013).
It has also been used in Indian cement plants,
where coal supply has been logistically constrained
(Gordon and Livingston 2017).
The U.S. Environmental Protection Agency (EPA)
(1991) states that the biggest nancial challenge for
the use of TDF in cement manufacturing is the cost
of competing fuels. This is particularly true if there
are additional capital costs to burning TDF. The
EPA report specically cites the price of petroleum
coke as an issue. That is certainly a point of interest
in Saudi Arabia, where fuels are currently sold to
cement companies at regulated prices. Although
petroleum coke is not necessarily referred to as an
alternative fuel by the aforementioned papers (e.g.,
Georgiopoulou and Lyberatos 2018 refer to it as a
conventional fuel), it has not been considerably used
in Saudi Arabia.
Environmental considerations
when using TDF
PCA member companies studied the environmental
effects of using TDF in 2008 (PCA 2009). Burning
whole tires would result in slightly more carbon
emissions compared to crude oil, petroleum
coke, or even coal use. Zinc also appears in the
resulting ash when tires are burned; it has been
found in high concentrations in proximal water
supplies. To remedy the prevalence of zinc, Usón
et al. (2013) and Rahman et al. (2015) cite a 30%
replacement limit of fuels with tires. As a result of
an extensive review of the literature, Rahman et
al. (2015) report that TDF use above the 30% limit
may alter the chemical composition of the cement,
creating undesirable material properties. Thus,
this would make the use of tires in cement plants
supplementary to the primary fuel.
Furthermore, the prevalence of particulate matter
in the TDF combustion products is equivalent to
that of burning conventional fuels (EPA 2010a,
2014; Downard et al. 2015). Other pollutant
emissions, such as SOX and nitrous oxide
(NOX), do not differ statistically between TDF
and non-TDF ring kilns, according to the PCA
(2009). Nakomcic-Smaragdakis et al. (2016)
Time-varying Carbon Pricing The Use of Tire-derived Fuels and
Petroleum Coke for Cement Making
8
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
The Use of Tire-derived Fuels and Petroleum Coke for Cement Making
model the use of up to a 15% TDF share of all
fuels used in Serbia, supporting the indifference
nding of the PCA (2009) for TDF use in cement
plants. We should note that coal and petroleum
coke are the typical conventional fuels used in
the U.S. cement industry and in Serbian plants.
This may differ for countries that rely on cleaner
fuel mixes.
Georgiopoulou and Lyberatos (2018) explored the
use of alternative fuels in cement kilns by performing
life cycle analyses for different fuel mix scenarios.
Although only petroleum coke and/or coal were
assumed for most scenarios, two scenarios used
up to 10% of TDF. Similar to the ndings of the
PCA, the amount of CO2 emissions does not vary
signicantly across the scenarios. However, there
were slight reductions when the share of alternative
fuels was raised to 30%.
9
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Methods
We employ a variant of the cement
manufacturing optimization model
in the KAPSARC Energy Model
(KEM). The cement model is mostly described
by KAPSARC (2016), with some modications
discussed in this section. The optimization is
formulated as a linear program, as detailed in
Appendix A. Its objective function maximizes the
prot of the entire industry. The prot function is
allowed to consider a non-trivial carbon price.
Unlike the recursive dynamic framework used
by Matar and Elshurafa (2017), our model is
run in a perfect foresight fashion. Four regions
of Saudi Arabia are represented, allowing for
the interregional domestic transfer of cement.
The four regions are depicted in Figure 2. The
sector may either import product or produce it for
domestic use or exports. The model makes fuel
use, other operational and investment1 decisions
to maximize its prot. As such, it takes the central
planner approach.
Figure 2. The cement model represents Saudi Arabia by four regions.
Source: KAPSARC (2016).
Eastern
region
Western
region
Central
region
Southern region
Figure 3 illustrates the model. Approximated as
pure calcite, limestone is rst fed into a crusher.
It is then mixed with other raw materials like iron
ore. After milling, the kiln is at the heart of the
cement-making process. The kiln, housing the
calcination and sintering processes, produces
clinker. The model represents three types of dry
kilns: long dry kilns, kilns with pre-heaters only,
and kilns with both pre-heaters and pre-calciners.
Saudi Arabia does not use wet processes for
kilns.
10
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Methods
The modeled stoichiometric pyroprocessing
reactions in the kiln are described below:
Calcination: (1a)
Sintering:
(1b)
The model adheres to mass balances between
the processes described in Figure 3. As shown
by the chemical reactions expressed in equations
1a and 1b, calcite is rst dissociated to carbon
dioxide and calcium oxide. The calcium oxide and
the remainder of the raw mix are then reacted
at a higher temperature to produce clinker. The
coefcients preceding the molecular formulas in
the sintering reaction are the number of moles to
achieve chemical balance. These molar coefcients
are calculated by the model based on the mass
composition of clinker for each type of cement. The
clinker mass content ranges are specied according
to the standard ASTM C-150. The mass content
constraint limits during the mixing processes are
obtained from van Oss (2005) and Cemex. The
upper and lower bounds of inputs’ mass content are
tabulated in Table A1 in Appendix B.
! "+ 
 + (!) + (!") + (!") (") + (!) + (") + (#)
Figure 3. Cement model schematic.
Source: Matar and Elshurafa (2017).
Crusher Mixing Raw mill
Kiln
(Calcination and
sintering processes)
MixingCement grinder Clinker cooler
Li me st on e
Clay Sand Iron ore
P ozz ol an Gypsum
Carbo n di oxi de
(duri ng cal cination )
Cement kiln dust
(during sintering
process)
Portl and Type I
Portl and Type V
Pozz ol an ce men t
For domestic
dema nd , expor t,
and/or storage
The model is capable of investing to upgrade
any existing long-dry kilns with pre-heaters and
pre-calciners. Arab Heavy crude oil, natural gas,
fuel oil, diesel, TDF, and petroleum coke are the
fuels used to generate the high temperatures
required by the kiln. Although the model can
use diesel, it is not an active element in the
fuel set as it has not been used for cement
manufacturing in the recent past. The clinker is
subsequently cooled, mixed with other materials
as the cement types require, and ground to
make nished cement. Each of those processes
require electricity. Alsop et al. (2001) show the
specic electricity use gures of the cement
processes.
11
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Methods
The cement types modeled are Portland Cement
types I and V, and pozzolan cement. Once cement
is produced, the model may choose to meet
domestic demand, export it, or store it for use in
future years. Storage allows producers to exploit
changing fuel prices through time.
The number of tires needed per tonne of clinker is
calculated based on the energy content reported
by Georgiopoulou and Lyberatos (2018), and the
energy requirement for different types of kilns, as
cited by Princiotta (2011). Emissions factors for
CO2, NOX, SOX, particulate matter (PM) and zinc
have been incorporated for all fuels in the model
based on information from the EPA (2010a, 2014)
and Downard et al. (2015). The values are shown
in Table 1.
Table 1. Pollutant emissions factors used in the model.
Sources: EPA (2010a, 2014); Downard et al. (2015).
Note: MMBtu= million British thermal units.
Material
Emissions factors (metric tonne of pollutant per metric tonne of fuel, unless otherwise stated)
Crude oil Fuel oil Natural gas (metric tonne per MMBtu) TDF Petroleum coke
CO2 3.12 2.96 0.05 2.6 3.38
SOX 4.0(10-2)4.1(10 -2)2.7(10-7)2.6(10-2)4.1(10-2)
NOX 7. 8(10 -3)4.7(10-3)10-7 10-4 2.0(10-5)
Particulate matter 3.5(10-3)1.9(10-3)3.4(10-6)5.3(10-3) -
Zinc 3.5(10-6)1.9(10-6)1.3(10-8)4.5(10-5) -
Calibration of the model
The present formulation is calibrated to 2019 and
has a planning horizon that ends in a steady state
in 2025. The steady state is characterized by
unchanging fuel prices after 2025. Saudi demand
for cement in 2019 is taken from SAMA (2020)2 and
increases at 2% per year. The Yamama Cement
Company (2019) also published presentation slides
that detail the amount of cement exported by all
cement companies in Saudi Arabia in the rst three
quarters of 2019. They show how much of the total
amount, 1.35 million metric tonnes in total, all of
which assumed to be ordinary cement, was used
by each company. Due to ample spare capacity,
the government may permit more exports over the
coming years. Since we cannot predict whether
more export licenses will be granted,3 we use the
2019 export level as a cap for exports throughout
the planning horizon. As Saudi production in 2019
was only just above 42 million metric tonnes,
relative to a capacity of 75 million metrics tonnes
(U.S.GS 2019), we expect Saudi Arabia to continue
to be self-sufcient in cement until 2025. Thus, no
imports are allowed in the model.
12
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Methods
Allocations of fuel to cement companies up to 2015
is reported by Saudi Aramco (2008). We lack a
more recent source, and thus apply the same fuel
allocation limits. As there are no fuel or crude oil
supply constraints in Saudi Arabia, we continue
the limits for environmental policy reasons. The
domestic price of natural gas has also induced the
government to impose sectoral quotas for the fuel
(Matar and Anwer 2017). Since that is an exogenous
constraint, and this is a partial equilibrium model, we
continue to impose limits on natural gas use based
on the latest data. The limits for natural gas are
also contingent on the distribution pipeline network,
which is outside the scope of this paper.
Since cement companies are listed on the Saudi
stock exchange, Tadawul, their key operational
attributes, such as existing kiln capacity, are publicly
available on the exchanges website. The capital
costs for incremental investments and electricity
use for each unit are derived from the work of Alsop
et al. (2001, 2007), Worrell et al. (2008), and the
EPA (2010b). The operations and maintenance
costs are estimated as 6% of the capital costs.
On-site electricity generation capacity for each plant
is reported by Saudi Arabias electricity system
regulatory body (ECRA 2020).
Current fuel prices to cement
plants
Currently, energy prices in Saudi Arabia are
predominantly administered by the government.
Relevant fuel prices are summarized in Table 2. As
discussed, the EPA (1991) uses a TDF estimate of
$20 per tonne, taking into account the processing
and logistics costs before it reaches the cement
plant. In support of this estimate, Moran and De
Raedt (2011) use a delivered TDF price of $25 per
tonne. Hence, we settle on a $25 per tonne estimate
for the price of TDF.
The Council of Ministers’ Decision No. 95 does
not mention petroleum coke prices. Saudi oil
reneries did not install delayed cokers until
the last few years (IHS Midstream database).
Petroleum coke is also relatively inexpensive due
to it being a by-product of oil rening. Thus, unlike
other fossil fuels, we presume that there is not
a government-administered price for petroleum
coke. We use the Saudi General Authority
for Statistics’ (GaStat’s) export data (2020) to
estimate the price of petroleum coke in 2019.
Table 2. Fuel prices offered to the Saudi cement industry in 2020.
Sources: Council of Ministers Decision No. 95; estimate for TDF price from EPA (1991); GaStat (2020); Water and Electricity
Regulatory Authority (2020).
Fuel or electricity Domestic price input to model
Arab Heavy crude oil U.S.$4.40/barrel
Natural gas (methane) U.S.$1.25/MMBTU
Heavy fuel oil (viscosity of 360 cSt) U.S.$3.80/barrel
Diesel U.S.$14.00/barrel
Petroleum coke U.S.$68.09/ton
Tire-derived fuel (TDF) U.S.$25/ton
Electricity from the grid for industry U.S.$48.0/MWh
13
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Methods
Model adjustments for TDF and
carbon pricing
Beyond adding it to the fuel set, using TDF
brings with it some additional model adjustments.
Following Usón et al. (2013), an additional
constraint has also been included to enforce an
annual upper limit for TDF use in the cement
sector’s fuel mix of 30% in each region. Shown
by Equation 2, this limit applies to each region
in the model separately. u,
f,t,r are the fuel use
variables by fuel (f), year (t), and region (r) in units
of energy. If the 30% limit is reached, the dual
variable associated with the constraint will inform
the analysis by estimating how much the objective
function will improve by relaxing the constraint.
(2)
We also introduce an additional investment
requirement if TDF is chosen for plant operation.
According to Worrell et al. (2013), the capital cost
for installing a system to feed tires into the middle
portion of a kiln runs anywhere from $0.1 to $1
per annual tonne of clinker. For conservatism, we
assume $1 per tonne of clinker. The model may
invest in a brand new kiln that can take TDF or
upgrade existing kiln variants with a TDF feed
system.
Furthermore, the objective function has been
modied to account for the CO2 price as a
cost that is discounted through time. The CO2
produced during the calcination process and by
way of fuel combustion – in the kilns or for power
generation – results in a higher cost.
0.3 !,"#$,%,&
!,',%,&
'
14
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Policy Scenarios
Our aim in this paper is two-fold: First, it is
to assess the price-induced (i.e., natural
uptake due to lower costs) adoption of TDF
and petroleum coke by cement plants. Second, it
is to study the impact of imposing a time-varying
carbon price. As such, we examine these six policy
scenarios:
Current Policies (CP): Except for petroleum
coke, current fuel and electricity prices are xed
to the values from 2019 to 2025 presented in
Table 2. The petroleum coke price in 2019 is
the price at which Saudi Arabia exported the
fuel (GaStat 2020). The prices thereafter are
estimated by the projected Brent crude oil price
growth reported by the U.S. Energy Information
Administration (EIA) (2021).
Alternative Fuels (AF): TDF and petroleum
coke are incorporated with the Current Policies
settings. They are used from 2021.
Retrot Support (RS): The Alternative Fuels
settings, with the additional capital expenditures
associated with TDF, are covered by an external
party. The external party could be a government
body.
Liberalized Fuel Prices (LFP): The Saudi
government has expressed its plans to reform
fuel prices by raising them so that they are
linked to the cost of production or their prices
on international markets (Saudi Vision 2030
2017). In line with this, from 2021 the model’s
fuel prices are gradually raised to world market
values by 2025. The gradual nature of the price
increases is more realistic and would not shock
cement manufacturers. We again utilize the
Brent crude oil price growth projected by the
EIA (2021) and apply it to the most recent prices
shown in Table 2. Saudi-produced natural gas
is not subject to the price regimes of regional
markets, as it is not traded. Hence, we test a
liberalized price for it of $2.50 per million British
thermal units (MMBtu) by 2025. The price of
TDF is assumed to be unaffected through time.
Figures 4 and 5 show the prices input into the
model. These fuel prices are not meant to be
predictions. They are merely suppositions from
which we can observe how the model would
react. Moreover, no capital expenditure support
is provided in this scenario.
LFP with a constant CO2 price
(LFP-constant): This scenario adopts all the
features of LFP with the additional stipulation
that a constant $45 is applied for every metric
tonne of CO2 emitted by cement plants during
the time horizon. Matar and Elshurafa (2017)
found that prot maximization is still achieved
while reducing CO2 emissions at $45 per tonne
for Saudi cement companies.
LFP with a gradual rise in the CO2 price
(LFP-gradual): In addition to applying the LFP
settings, this scenario imposes a linear increase
in the carbon price through time. The price
starts in 2021 at $25 per metric tonne of CO2,
reaching $75 per metric tonne in 2025.
In all ve alternative scenarios, the model is free to
optimize starting in 2021. The years 2019 and 2020
have already passed, and thus the values of their
variables are xed to the Current Policies scenarios.
We further estimate that there is a one-year lead
time for new investments. These scenarios also
assume there are no capital constraints.
15
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Policy Scenarios
Figure 4. Assumed oil and natural gas prices for cement manufacturers in the Liberalized Fuel Prices scenario,
excluding petroleum coke.
0.00
0.50
1.00
1.50
2.00
2.50
3.00
0
10
20
30
40
50
60
70
80
2019 2020 2021 2022 2023 2024 2025
Natural gas price (dollars per MMBTU)
Arab Heavy, HFO, and diesel prices
(dollars per barrel)
Natural gas
Arab Heavy crude oil
Heavy fuel oil
Diesel
Source: Council of Ministers Decision No 95 and author assumptions based on Saudi Vision 2030 (2017).
Figure 5. Assumed TDF and petroleum coke prices for cement manufacturers in the Liberalized Fuel Prices scenario.
Source: Author estimates based on Moran and De Raedt (2011), GaStat (2020), and EIA (2021).
0
10
20
30
40
50
60
70
80
2019202020212022202320242025
Dollars per metric tonne
Petroleum coke
TDF
16
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Results and Discussion
Cement production and storage results are
shown for each policy scenario in gures 6
and 7. There are some 2.9 million tonnes
of cement already in storage in 2019 as an initial
condition. Those amounts are used in their entirety
by the time TDF investments can be made. Some
storage of cement makes a comeback shortly after
that point in the Current Policies scenario. Because
fuel prices are rising year-on-year in the Liberalized
Fuel Prices scenario, production of cement
increases in the early years to store for subsequent
years. There is a similar, if more drastic, effect when
fuel prices are liberalized and the CO2 price is raised
gradually. Because of the knowledge of future CO2
price rises, cement plants opt to produce around
85 million tonnes of cement annually between 2021
and 2023. This quantity is higher than the amount
demanded in each of those years. As depicted in
Figure 7, the industry stores over 100 million tonnes
of cement by the end of the period to satisfy demand
in the later years, when the carbon price nears its
highest point.
Figure 6. Total cement production nationally by scenario (LFP-gradual is presented on the right-hand axis).
Source: Model results.
0
30
60
90
120
150
30
33
36
39
42
45
48
51
2019 2020 2021 2022 2023 2024 2025
Cement produced (million metric tonnes)
Current Policies
Retrofit
Support
Liberalized Fuel Prices
Alternative Fuels
LFP-constantLFP-gradual
(right axis)
Also shown in Figure 7, about 0.4 million tonnes of
cement are stored from 2022 for use in 2023 for the
Alternative Fuels, Retrot Support, and Liberalized
Fuel Prices scenarios. Except for gradual carbon
pricing, fuel prices are in a steady state, and so
there is no longer an incentive for cement plants to
store large amounts of their product for future years.
17
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Results and Discussion
Figure 7. National combined storage of cement types by scenario (LFP-gradual is presented on the right-hand axis).
Source: Model results.
0
30
60
90
120
150
180
0
3
2019 2020 2021 2022 2023 2024 2025
Cement in storage (million metric tonnes)
Cement in storage (million metric tonnes)
Current Policies
Retrofit Support
Liberalized Fuel Prices
Alternative Fuels
LFP-gradual (right axis)
LFP-constant
Fuel use by Saudi cement plants
Figure 8 presents the cement sector’s fuel mix for
each scenario. When valued at the market price for
export from Saudi, petroleum coke is only utilized
(and in substantial quantities) when all fuel prices
are liberalized. The conditions of Retrot Support
help to increase TDF use by four times TDF use
under Alternative Fuels until 2025. However, the
cost to the authorities providing support is about
$28 million from 2021 to 2025. These two scenarios
utilize TDF to displace some of the more valuable
crude oil and HFO. The two scenarios do not impact
fuel prices but do enable the Kingdom to use its
oil resources more efciently. HFO use would be
eliminated by petroleum coke by the end of the fuel
price liberalization horizon, with no carbon price
imposed. It is important to note that all liquid fuels
are only displaced if fuel prices are liberalized.
When fuel prices are liberalized and a gradual
carbon price is applied, fuel use is lower throughout
the time horizon. Figure 6 shows that this happens
even with more cement produced in the intermediate
years. The subsequent lower fuel use is attributed
to investment in higher energy efciency. Fuel use
when a constant carbon price is implemented is a
bit lower than no carbon pricing scheme. This is due
to a drop in cement production and slightly higher
energy efciency compared to just liberalizing fuel
prices. TDF is not used in either carbon pricing
scenario
TDF reaches its use limit of 30% only when
retrot support is provided or when fuel prices are
liberalized. That means that the constraint’s dual
variable is non-zero in that event, and it indicates the
extent to which the objective function improves by
relaxing the constraint. Figure 9 presents the values
of the dual variable for the four modeled regions for
18
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
the LFP scenario when relaxing the energy use limit
for TDF. TDF becomes an attractive choice in the
rst step of the gradual liberalization of fuel prices. It
hits the use limit of 30% in 2021 in all regions. The
dual variables’ values in all regions but the central
region are around $0.50 per MMBtu in 2025, or $15
per metric tonne of TDF.
Results and Discussion
Figure 8. Fuels used in cement plants by policy scenario.
Source: Model results.
0
50
100
150
200
250
300
350
400
2019 2022 2025 2019 2022 2025 2019 2022 2025 2019 2022 2025 2019 2022 2025 2019 2022 2025
CP AF RS LFP LFP-constant LFP-gradual
Trillion Btu
HFO Diesel Natural gas Crude oil Petroleum coke TDF
As shown in Figure 10, the Saudi cement sector
makes the largest investments in more efcient
clinker kilns when a carbon pricing scheme is
implemented, or when there is nancial support
for retrots. It builds almost 90 million tonnes
of capacity per year when it faces the gradual
implementation of a carbon price. Investment is
exclusively made in kilns that take TDF in the
Retrot Scenario – about 37 million tonnes per year
of capacity. The results also show that between
2019 and 2025, 16 million metric tonnes a year
of kiln capacity is tted with pre-heaters and
pre-calciners under higher fuel prices only. This is
compared to 8 million tonnes a year of kilns with
pre-heaters and pre-calciners and no kilns retrotted
to take TDF in the Current Policies scenario.
19
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Results and Discussion
Figure 9. Regional values of the dual variables associated with the TDF use limit of 30% in the Liberalized Fuel Prices
scenario.
Source: Model results.
0.0
0.1
0.2
0.3
0.4
0.5
0.6
2019 2020 2021 2022 2023 2024 2025
Dual variable of TDF use limit constraint
($ per MMBtu)
Western
Southern
Central
Eastern
Figure 10. Investments in new or retrotted kilns that have pre-heaters or pre-calciners or can take TDF, by policy
scenario from 2019 to 2025.
Source: Model results.
0
20
40
60
80
100
CP
AF
RS
LFP
LFP-constant
LFP-gradual
CP
AF
RS
LFP
LFP-constant
LFP-gradual
New or retrofitted kilns with pre-heaters and pre-calciners Long-dry kilns retrofitted to take TDF
Tonnes per year
20
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
The marginal cost of producing
cement
From an optimization modeling perspective, the
dual variable associated with the product supply
constraint is dened as the marginal cost of
production. Currently, the marginal production
cost of cement in Saudi Arabia is lower than it
is internationally due to low fuel prices. To show
its future evolution by policy scenario, Figure
11 displays the marginal costs of producing
Portland Type I cement until 2025. The values
presented are the national averages weighted
by regional production. Only the cost of the
most common type of cement is presented
because all types show similar curves. By
allowing just TDF with the current fuel pricing
lowers the marginal costs compared to Current
Policies. Even though they are not shown on
the chart, the marginal costs shoot up to around
$300 per tonne in the two policy scenarios that
impose a carbon price.
Results and Discussion
Figure 11. The marginal cost of producing Portland Type I cement by policy scenario.
Source: Model results.
0
5
10
15
20
25
30
35
40
2019 2020 2021 2022 2023 2024 2025
Portland Type I ($ per metric tonne)
Current Policies
Retrofit Support
Liberalized Fuel Prices
Alternative Fuels
Liberalized Fuel Prices without TDF
Unsurprisingly, the cost of production rises when
fuel prices are just liberalized. However, the option to
use petroleum coke and TDF will lower the marginal
cost rise if the country continues its energy price
reforms. The marginal cost is reduced by 40%
throughout the planning horizon under liberalized
fuel prices when both coke and TDF are allowed
compared to when they are not.
21
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Results and Discussion
Pollutant emissions by the Saudi
cement industry
Table 3 summarizes the pollutant emissions from
2019 to 2025 for each scenario. For brevity, the
results for the major pollutants and those that are
pertinent to the use of TDF and petroleum coke
are shown graphically. Figures 12 to 14 highlight
the resulting emissions of CO2, SOX, and zinc by
the Saudi cement industry until 2025. In addition
to the CO2 emitted from burning fuels, Figure 12
includes the amount of emissions produced during
the calcination process. The total quantity of CO2
produced is sensibly increased in the scenarios
where TDF or petroleum coke are adopted.
Generally, the CO2 emissions are in the 44 to 60
million metric tonnes per year range in all but the
Liberalized Fuel Prices scenario with carbon pricing
variants.
Table 3. Pollutant emissions by scenario.
Source: Model results.
Material
Emissions from 2019 to 2025 (million metric tonnes of pollutant)
CP AF RS LFP LFP-constant LFP-gradual
CO2338 343 357 380 281 387
SOX 1,567 1,649 1,891 1,965 868 1,284
NOX 215 216 217 86 110 173
Particulate matter 88 105 153 122 45 71
Zinc 145 286 701 805 83 120
Gradual fuel price liberalization with or without a
gradual implementation of carbon pricing brings
about unintuitive results. When a steady increase in
carbon price is adopted, CO2 emissions are about
the same as just liberalizing fuel prices during the
entire time horizon. However, gradually ramping
up carbon pricing results in higher annual CO2
emissions in the early years. This is consistent
with the increased production of cement driven by
gradual carbon pricing in the intermediate years.
With phased implementation, emissions fall below
those of other scenarios in 2025. Conversely,
applying a constant carbon price yields lower annual
CO2 emissions throughout the time horizon.
Figure 13 shows that SOX emissions rise steadily
when fuel prices are only liberalized. This goes
against the ndings of the PCA (2009) and
Nakomcic-Smaragdakis et al. (2016) that the use of
TDF does not cause higher SOX production, likely
because of the initial fuel mix differences. Their
initial fuel mixes include coal, but this fuel is not
used in Saudi Arabia. In our case, we transition to a
signicant amount of petroleum coke.
22
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Results and Discussion
Figure 12. CO2 emissions from cement manufacturing in Saudi Arabia by policy scenario.
Source: Model results.
0
10
20
30
40
50
60
70
80
2019 2020 2021 2022 2023 2024 2025
Carbon dioxide emissions (millions of metric tonnes)
Current Policies
Retrofit Support
Liberalized Fuel Prices
Alternative Fuels
LFP-constant
LFP-gradual
Figure 13. SOX emissions from cement manufacturing in Saudi Arabia by policy scenario.
Source: Model results.
0
50
100
150
200
250
300
350
400
2019 2020 2021 2022 2023 2024 2025
Sulfur oxide emissions (thousands of metric tonnes)
Current Policies
Retrofit Support
Liberalized Fuel Prices
Alternative Fuels LFP-gradual
LFP-constant
23
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Results and Discussion
Figure 14. Zinc emissions from cement manufacturing in Saudi Arabia by policy scenario.
Source: Model results.
0
30
60
90
120
150
2019 2020 2021 2022 2023 2024 2025
Zinc emissions (metric tonnes)
Current Policies
Retrofit Support
Liberalized Fuel Prices
Alternative Fuels
LFP-gradual
LFP-constant
There is also a surge in zinc emissions that
persists at a higher rate in the Retrot Support
and Liberalized Fuel Prices scenarios than in
other scenarios in the later years. This increase is
attributable to the high use of TDF. In contrast, there
is no TDF uptake in the Current Policies and Carbon
Pricing scenarios, resulting in stable or declining
zinc emissions.
24
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Conclusion
This paper presents an analysis of possible
policy scenarios for the Saudi cement
industry. It considers the use of TDF
and petroleum coke (termed “alternative fuels”)
for the clinkering process. Six policy scenarios
are examined: one where the current fuels and
fuel pricing policies remain intact; one where
alternative fuels are allowed and current fuel
pricing is maintained; one where the alternative
fuels are supplemented with nancial support to
cover incremental investment; and three where all
fuel prices are gradually liberalized by 2025 with
or without carbon pricing. The paper identies
the impacts of the scenarios by employing an
optimization model that characterizes cement
production using dry kilns from 2019 until 2025.
Some 95 million metric tonnes of TDF are used
from 2019 to 2025 if fuel prices are kept the same.
That is below the 30% kiln energy use limit for the
fuel suggested by Usón et al. (2013) and Rahman et
al (2015). Having external nancial support for the
incremental investment required to use TDF raises
its use by a factor of four over the planning horizon.
This support does not, however, yield signicant
reductions in the marginal cost of production. TDF is
only used to its full capacity in the Retrot Support
and the Liberalized Fuel Prices scenarios. It is not
used when liberalized fuel prices are paired with
carbon pricing schemes. Gradual carbon pricing
brings about different intertemporal production
decisions and large amounts of cement storage
compared to the other scenarios. This intertemporal
arbitraging is expected from cement producers if
governments specify any kind of future gradual
reform. Priced at the value at which Saudi exports
it, petroleum coke is only used when fuel prices are
liberalized.
Facilitating the use of TDF and petroleum coke
would help alleviate the increased cost resulting
from energy price reform without a carbon price.
The marginal cost of producing one extra tonne of
Portland Type I cement would be reduced by about
40% compared to a price liberalization scenario that
bars the use of TDF and coke.
All scenarios without carbon pricing produce 340
million tonnes to 380 million tonnes of total CO2
emissions from 2019 until 2025. The advent of a
constant carbon pricing scheme and fuel price
liberalization results in 280 million metric tonnes of
CO2. When both fuel prices are liberalized and a
gradual carbon price is in place, 390 million metrics
tonnes of CO2 is produced. This is due to the
production of large quantities of cement and storing
it for future years when the carbon price is highest.
SOX emissions are similar in all alternative
scenarios that keep low xed fuel prices. They
steadily rise when only fuel prices are liberalized,
increasing by 50% by the end of the horizon. SOX
emissions decline when a constant carbon price
supplements rising fuel prices because of the
increased investment in more efcient kilns. The
substantial uptake of TDF when fuel prices are
liberalized or retrot support is offered increases
the production of zinc. Under fuel price liberalization
alone, annual zinc production would be nearly eight
times that of the base case. When supplemented by
the carbon pricing schemes, fuel price liberalization
produces the lowest amounts of zinc.
25
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
1 Investments are discounted at 6% in real terms.
2 SAMA produces annual statistic spreadsheets that contain various socio-economic and economic data
for Saudi Arabia.
3 Of course, higher allowed export quantities will raise revenues and increase the capacity factors for
existing plants.
Endnotes
26
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
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8. Discussion of the Empirical Findings
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29
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
8. Discussion of the Empirical Findings
Appendix A – Model description
We developed the model as shown below. There are
conditions placed on the constraints or variables that
are not shown in this formulation.
Sets (subsets in parentheses)
m all cement production materials
cr(m) input materials
ci(m) intermediate materials
cii(m) materials without molecules or atoms
clinker(ci) clinker types only
cl(ci) clinker reactants and products
clr(cl) clinker reactants
clp(cl) clinker products
lime(cl) lime only
csaf(m) calcium oxide, silica, aluminum oxide, iron
oxide (CSAF) compound only
cf(m) nal products
cements(cf) cements only
ma(m) atomic particles
f fuels used in cement production
fup(f) upstream fuels
fref(f) rened oil products
fTDF(f) TDF only
fNG(f) natural gas only
u production units
uk(CMu) kilns only
ukTDF(CMuk) kilns that can take TDF
uPHPC(CMuk) pre-heating with pre-calcining units
ukcon(CMu) conversion activity units
ukconTDF(CMuk) conversion activities with just TDF
ukwoconv(CMu) without conversion activities
p processes
pk(CMp) sintering processes
pkiln(CMp) operating dry kiln
pkilnph(CMp) operating dry kiln with pre-heating
pkilnphpc(CMp) operating dry kiln with pre-heat
and pre-calcination
pkilnTDF(CMp) operating dry kiln with pre-heat and
pre-calcination with TDF
pkilnphTDF(CMp) operating dry kiln with pre-heat
and pre-calcination with TDF
pkilnphpcTDF(CMp) operating dry kiln with
pre-heat and pre-calcination with TDF
pnok(CMp) process without kilns
prop properties
qlim property and mixing limits
Variables (all variables on this list
have a positivity constraint)
molcl,clinker,t,r number of moles of kiln reactants and
products in thousand kilomol
masscl,clinker,t,r mass of kiln products in million tonnes
opm,p,f,t,r amount of mass input in process p in million
tonnes
existcpu,t,r existing capacity by region in million
tonnes per year
bldu,t,r built capacity by region in million tonnes per
year
transcf,t,r,rr product transported between and within
regions in million tonnes per year
Opandmaintt operation and maintenance costs in
million U.S. dollars
prodimportscf,t,r imported cement products in each
region in million tonnes
Importst cost of all imported goods in million U.S.
dollars
Constructt cost of construction in million U.S. dollars
crconsumpcr,t,r consumption of crude inputs in million
tonnes
fconsumpf,t,r consumption of fuels in million tonnes
exportscf,t,r Regional exports in million tonnes
30
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
natexportscf,t National exports in million tonnes
revenuest Export revenues in million U.S. dollars
totELconsumpl,s,d,t,r total electricity consumption in
terrawatthours (TWh)
ELconsumpl,s,d,t,r electricity from power sub-model in
TWh
ELopf,l,s,d,t,r on-site electricity generation in TWh
ELbldt,r building on-site electricity capacity in
gigawatts (GW)
ELexistcpt,r existing on-site electricity capacity in GW
clinkimportcii,t,r imported clinker by region in million
tonnes
kuprgradeukcon,t,r upgradable existing long dry kilns to
more efficient kilns in million tonnes
kuprgradetott,r sum of all upgradable technologies to
relate to kiln capacity in million tonnes
storexistcpt,r existing storage capacity in million
tonnes
storbldt,r building storage capacity in million tonnes
storagecf,t,r stored amount of cement in million tonnes
storageincf,t,r input amount of cement to storage in
million tonnes
storageoutcf,t,r,rr amount of cement taken out of
storage in million tonnes
emissiquantEMcp,t pollutant emissions quantities in
million tonnes
Objective function minimizes negative
prot
discfactt are the discount factors over time.
APff,t are the fuel prices. ELpricel,s,d is the
exogenously-administered electricity price
offered to the cement sector.
Accumulates all equipment capital
and product imports costs
purcstu,t,r are the capital costs for purchasing the
equipment of production units. storpurcstt are
the costs of equipment associated with storage
facilities. ELpurcstt accounts for the investment cost
of power generation equipment. importpricecf,t,r are
the import prices for finished cement products, and
clinkpricecii,t,r are the import prices for cement clinker.
Accumulates all construction capital
costs
constcstu,t,r are the portions of the production units’
capital costs assigned to land and construction.
Similarly, storconstcstt is the construction share of the
capital cost for storage units. ELconstcstt accounts
for the investment cost of land and construction.
Appendix A – Model description
min$%(
+
+
)
+%%%9<
+%%%%%9  <
%(

)
B
%%9 <
+%9 <
+%9<
+%%9 <

+%%9 <
 =
%%9 <
+%9 <
+%9<
=
%%%%%9 <
+%%%G9 +< I

+%%%9 <
+%%9 <

+%%9 <
 =
%%9 <
 =
min$%(++)
+%%%9<
+%%%%%9  <
%()
B
%%9 <
+%9<
+%9<
+%%9 <

+%%9 <
 =
%%9 <
+%9 <
+%9<
=
%%%%%9 <
+%%%G9 +< I

+%%%9 <
+%%9 <

+%%9 <
 =
%%9 <
 =
min$%(++)
+%%%9<
+%%%%%9  <
%()
B
%%9 <
+%9 <
+%9<
+%%9 <

+%%9 <
 =
%%9 <
+%9 <
+%9<
=
%%%%%9 <
+%%%G9 +<I

+%%%9 <
+%%9 <

+%%9 <
 =
%%9 <
 =
31
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Accumulates non-fuel operations and
maintenance costs
omcstp,t are the operation and maintenance (O&M)
costs for each process. massoutm,mm,p relates the
masses of the input and output materials for specic
processes. transcstr,rr and storageoutcf,t,r,rr are the
transportation costs within the same regions or
between regions; the latter cost stipulates that
cement is taken from storage, whereas transcstr,rr
represents moving manufactured cement. ELomcstt
is the O&M cost for electricity generation. storomcstt
is the operating cost of keeping nished cement in
storage. feedcstcr,t,r are the costs of the non-fuel raw
materials used in cement production, like limestone
and iron ore.
Accumulates all export revenues
intlpriceCMcf,t are the export prices of the various
cement types
Sums consumption of raw materials
(e.g., limestone, iron ore, gypsum)
input to cement plants
processusecr,p is a control table that is unity if an input
is used in a process.
Enforces raw materials availability, if
supply is limited
Capacity balance for production units
capadduu,u provides the ability to upgrade existing
long-dry kilns to more efcient kilns. If a long-dry
kiln is upgraded, the table subtracts the upgraded
capacity from the long-dry kiln category and adds it
to the more efcient kiln technology.
Ensures production level does not
exceed capacity
capfactoru,p are the utilization rates by unit.
Accounting for convertible long-dry
kiln capacities over time
Capacity balance for storage
facilities
Ensures storage level does not
exceed capacity
Appendix A – Model description
min$%(++)
+%%%9 <
+%%%%%9<
%()
B
%%9 <
+%9 <
+%9 <
+%%9<

+%%9 <
 =
%%9<
+%9 <
+%9 <
=
%%%%%9   <
 +%%%G9 + < I

+%%%9 <
+%%9  <

+%%9<
 =
%%9  <
 =
min$%(++)
+%%%9 <
+%%%%%9<
%()
B
%%9<
+%9<
+%9<
+%%9 <

+%%9 <
 =
%%9<
+%9 <
+%9<
=
%%%%%9   <
+%%%G9 + < I

+%%%9<
+%%9 <

+%%9<
 =
%%9<
 =
!",$," **+,
%&
0
 
 +34 7

 0
 +347

33347
0
  + 0
3

=
 +  0
 + 3

0
3334  7
+
3347
= 0
  


  

 
347
34 7
= 0
!",$," **+,
%&
0
 
 +34 7

 0
 + 347

33347
0
  + 0
3

=
 +  0
 + 3

0
3334 7
+
3347
= 0
 


 


34 7
34 7
= 0
!",$," **+,
%&
0
 
 +34 7

 0
 + 347

33347
0
  + 0
3

=
 +  0
 + 3

0
3334 7
+
3347
= 0
 


 


34 7
34 7
= 0
!",$," **+,
%&
0
 
 +34 7

 0
 + 347

33347
0
  + 0
3

=
 +  0
 + 3

0
3334 7
+
3347
= 0
 


 


34 7
34 7
= 0
!",$," **+,
%&
0
 
 +34 7

 0
 + 347

33347
0
  + 0
3

=
 +  0
 + 3

0
3334 7
+
3347
= 0
 


 


34 7
34 7
= 0
!",$," **+,
%&
0
 
 +34 7

 0
 + 347

33347
0
  + 0
3

=
 +  0
 + 3

0
3334 7
+
3347
= 0
 


 


34 7
34 7
= 0
!",$," **+,
%&
0
 
 +34 7

 0
 + 347

33347
0
  + 0
3

=
 +  0
 + 3

0
3334 7
+
3347
= 0
 


 


34 7
34 7
= 0
!",$," **+,
%&
0
 
 +34 7

 0
 + 347

33347
0
  + 0
3

=
 +  0
 + 3

0
3334 7
+
3347
= 0
 


 


34 7
34 7
= 0
32
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Mass balances between production
units
Note: clinkimportcii,t,r is only for when cii is clinker.
mixingspecqlim,m,ci,prop are the minimum and maximum
mass content constraints for the mixing operations
during cement production. There are two instances
of mixing, as shown in Figure 3 in the main text,
whose mass content limits depend on the finished
type of cement required.
Satises upper bound specications
for mass content during mixing
processes
Satises lower bound specications
for mass content during mixing
processes
After converting the kiln input from
mass to moles, a mass balance is
carried out for the clinker reaction
reactants and products
The clinker mass balances are performed by
stoichiometrically balancing the mass on the
reactant and product side. To do this, atomsubclr,ma
defines the number of atoms in the reactants and
products.
After converting all the individual
molecular products of the clinker
into mass units, the following two
constraints ensure the upper and
lower bounds of the products’ mass
composition is satised for each type
of clinker
clinkspecqlim,clinker,clp,prop are the maximum and
minimum specifications for mass content of
individual chemical compounds in clinker. clp2 is an
alias of set clp.
To relate the clinker reactions’ mass
output to the overall mass balance
relationship
Mass balance for the storage of
nished cement products
Supply constraint:
Appendix A – Model description
!",$," **+,
%&
0
 
 +34 7

 0
 + 347

33347
0
  + 0
3

=
 +  0
 + 3

0
3334 7
+
334



7
= 0
 


 


34 7
34 7
= 0
!",$," **+,
%&
0
 
 +34 7

 0
 +34 7

33347
0
  + 0
3

=
 +  0
 + 3

0
3334 7
+
3347
= 0











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


 


347
347
= 0
!",$," **+,
%&
0
 
 +34 7

 0
 +34 7

33347
0
  + 0
3

=
 +  0
 + 3

0
3334 7
+
334 7
= 0
 






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

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
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


347
347
= 0
!",$," **+,
%&
0
 
 +34 7

 0
 +347

3334 7
0
  + 0
3

=
 +  0
 + 3

0
33347
+
3347
= 0
 


 


347

347

= 0


)*

-



0


)*

-

+

0
)* -
)) ) 2,,,,,,,3

= 0
 +  )
0
)))*-

 
)
0
 +)
+)

 )
= 0
.,/,0 .. ./.,1,0 234.,1234.,55,1 234.,1,.,/,02
234.155
.../..,6,3,7,/,02
736
0
0.3$%!,#,$ !/
!
%&',#,$ %&'
 
* +- )
0
63,7 ..../15,15,28,15,1,.,/,0 2
.1285
+6,3,7,/,0 0
 )))
))))

0
 )*-
 0
 )* -
+ 0
)*

-

)) ) 2
,

,,

,,,,
3

= 0
 +  )
0
)))*  -

 
)
0
 +)
+)

 )
= 0
.,/,0 .. ./.,1,0234.,1234.,55,1234.,1,.,/,02
234.155
.../..,6,3,7,/,0 2
736
0
0.3$%!,#,$ !/
!
%&',#,$ %&'
 
* +- )
0
63,7 ..../15,15,28,15,1,.,/,02
.1285
+6,3,7,/,0 0
 )))
))))

0
 )*-
 0
 )*-
+ 0
)* -
)) ) 2,,,,,,,3

= 0
 +  )

0
)))*-

 
)
0
 +)
+)

 )
= 0
.,/,0 .. ./.,1,0234.,1234.,55,1234.,1,.,/,02
234.155
.../..,6,3,7,/,0 2
736
0
0.3$%!,#,$ !/
!
%&',#,$ %&'
 
* +- )
0
63,7 ..../15,15,28,15,1,.,/,02
.1285
+6,3,7,/,0 0
 )))
))))

0
 )*-
 0
 )* -
+ 0
)* -
)) ) 2,,,,,,, 3

= 0
 +  )
0
)))*-

 
)

0
 +)
+)

 )
= 0
.,/,0 .. ./.,1,0 234.,1234.,55,1234.,1,.,/,0 2
234.155
.../..,6,3,7,/,02
736
0
0.3$%!,#,$!/
!
%&',#,$ %&'
 
* +- )
0
63,7 ..../15,15,28,1 5,1,.,/,02
.1285
+6,3,7,/,0 0
 ))) 
))))

0
33
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Satisfying demand (exogenous
demands)
demvalcf,t,rr represents exogenous demands
Aggregates regional exports to the
national level
Accumulates fuel consumption in kilns
and for on-site electricity generation
fuelburnf,p,r and elecfuelburnf are the fuel burn rates in
units for fuel burned per unit of output. The former
is for the pyrprocessing stage, and the latter is for
on-site power generation.
Limits the use of TDF
enconf are the energy contents by unit of mass for
each fuel
Enforces fuel availability, if supply is
limited
A fuel supply constraint that limits fuel use to
allocation quantities.
Capacity balance for on-site power
generation
Ensures on-site electricity generation
does not exceed capacity
Measures total electricity requirement
(as base load)
ELinp are the amounts of electricity used by each
process. Cement production is annual. As such, we
distribute electricity consumption evenly across all
days, seasons and times of day.
Ensures electricity requirement is
satised by either on-site generation
or the grid
Quanties pollutant emissions
EMfactorsf,EMcp are the emissions factors expressed in
tonnes of pollutant per unit of fuel consumed.
Appendix A – Model description
 )*-
 0
 )* -
+ 0
)* -
)) ) 2,,,,,,, 3

= 0
 +  )
0
)))*-

 
)
0
 +)
+)

 )
= 0
.,/,0 .. ./.,1,0 234.,1234.,55,1234.,1,.,/,0 2
234.155
.../..,6,3,7,/,02
736
0
0.3$%!,#,$!/
!
%&',#,$ %&'
 
* +- )
0
63,7 ..../15,15,28,1 5,1,.,/,02
.1285
+6,3,7,/,0 0
 ))) 
))))

0
 )*-
 0
 )* -
+ 0
)* -
)) ) 2,,,,,,, 3

= 0
 +  )
0
)))*-

 
)
0
 +)
+)

 )
= 0
.,/,0 .. ./.,1,0 234.,1234.,55,1234.,1,.,/,0 2
234.155
.../..,6,3,7,/,02
736
0
0.3$%!,#,$!/
!
%&',#,$ %&'
 
* +- )
0
63,7 ..../15,15,28,1 5,1,.,/,02
.1285
+6,3,7,/,0 0
 ))) 
))))

0
 )*-
 0
 )* -
+ 0
)* -
)) ) 2,,,,,,, 3

= 0
 +  )
0
)))*-
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 
)
0
 +)
+)

 )
= 0
.,/,0 .. ./.,1,0 234.,1234.,55,1234.,1,.,/,0 2
234.155
.../..,6,3,7,/,02
736
0
0.3$%!,#,$!/
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 
* +- )
0
63,7 ..../15,15,28,1 5,1,.,/,02
.1285
+6,3,7,/,0 0
 ))) 
))))

0
 )* -
 0
 )*-
+ 0
)* -
)) ) 2,,,,,,,3

= 0
 +  )
0
)))* -
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)
0
 +)
+)

 )
= 0
.,/,0 .. ./.,1,0 234.,1234.,55,1234.,1,.,/,02
234.155
.../..,6,3,7,/,0 2
736
0
0.3$%!,#,$ !/
!
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 
* + - )
0
63,7 ..../15,15,28,15,1,.,/,0 2
.1285
+6,3,7,/,0 0
 )))
)))) 

0
 )* -
 0
 )*-
+ 0
)* -
)) ) 2,,,,,,,3

= 0
 +  )
0
)))* -

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)
0
 +)
+)
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 )
= 0
.,/,0 .. ./.,1,0 234.,1234.,55,1234.,1,.,/,02
234.155
.../..,6,3,7,/,0 2
736
0
0.3$%!,#,$ !/
!
%&',#,$ %&'
 
* + - )
0
63,7 ..../15,15,28,15,1,.,/,0 2
.1285
+6,3,7,/,0 0
 )))
)))) 

0
 )* -
 0
 )*-
+ 0
)* -
)) ) 2,,,,,,,3

= 0
 +  )
0
)))* -

 
)
0
 +)
+)

 )
= 0
.,/,0 .. ./.,1,0 234.,1234.,55,1234.,1,.,/,02
234.155
.../..,6,3,7,/,0 2
736
0
0.3$%!,#,$ !/
!
%&',#,$ %&'
 
* + - )
0
63,7 ..../15,15,28,15,1,.,/,0 2
.1285
+6,3,7,/,0 0
 )))
)))) 

0
!,# +!,# !$%,# 0
 )*-
 0
 )* -
+ 0
)* -
)) ) 2,,,,,,,3

= 0
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0
)))*-
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)
0
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+)

 )
= 0
.,/,0 .. ./.,1,0 234.,1234.,55,1234.,1,.,/,0 2
234.155
.../..,6,3,7,/,0 2
736
0
0.3$%!,#,$!/
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%&',#,$ %&'
 
* +- )
0
63,7 ..../15,15,28,1 5,1,.,/,02
.1285
+6,3,7,/,0 0
 )))
)))) 

0
!,#,$,%,& +!,#,$,%,& +-',!,#,$,%,&
'
= 0
 )*-
 0
 )* -
+ 0
)* -
)) ) 2,,,,,,,3

= 0
 +  )
0
)))*-
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 
)
0
 +)
+)

 )
= 0
.,/,0 .. ./.,1,0 234.,1234.,55,1234.,1,.,/,0 2
234.155
.../..,6,3,7,/,0 2
736
0
0.3$%!,#,$!/
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0
63,7 ..../15,15,28,1 5,1,.,/,02
.1285
+6,3,7,/,0 0
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
0
34
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Appendix B – Mass content constraints for mixing and
clinker composition in the cement-making process
Table A1. Mass content limits for input materials during mixing and clinkering processes.
Mixture Input material Upper bound (wt %) Lower bound (wt %)
Mixture into the raw mill
Sand 52
Clay 26 24
Iron ore 3 1
Crushed limestone 71 70
Portland Type I entering
grinder
Gypsum 54
Clinker for Portland I 99 91
Portland Type V entering
grinder
Gypsum 4 3
Clinker for Portland V 99 91
Pozzolan pre-cement
entering grinder
Gypsum 53
Clinker for Pozzolan cement 90 80
Pozzolan 40 15
Clinker for Portland I
C3S65 50
C2S30 10
C3A14 6
C4AF 10 7
Clinker for Portland V
C3S65 40
C2S30 15
C3A5 1
C4AF 17 10
Clinker for Pozzolan
cement
C3S65 50
C2S30 10
C3A14 6
C4AF 10 7
Source: van Oss (2005); Cemex
Note: wt %= weight share
35
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
Appendix B – Mass content constraints for mixing and
clinker composition in the cement-making process
About the Authors
Walid Matar
Walid is a research fellow at KAPSARC, working on energy systems models such as
the KAPSARC Energy Model, and satellite projects such as the residential electricity
use model. Walid holds a Master of Science degree in mechanical engineering from
North Carolina State University and a Bachelor of Science degree in the same eld
from the University of South Carolina.
Doaa Filali
Doaa is an assistant professor at Princess Noura bint Abdulrahman University. She
holds a P.h.D in mathematics from Cardiff University.
About the Project
This study is part of the project Future of Natural Gas in Saudi Arabia, and leverages a component of
the KAPSARC Energy Model (KEM). We developed KEM for Saudi Arabia to understand the dynamics
of the country’s energy system. It is a partial equilibrium model formulated as a mixed complementarity
problem to capture the administered prices that permeate the local economy. KEM has previously been
used to study the impacts of various industrial fuel pricing policies, improved residential energy efciency
for the energy economy, the feasibility of installing coal-red power plants in Saudi Arabia, and a way to
computationally analyze residential electricity prices.
36
Alternative Fuels for Saudi Cement Manufacturing with Time-varying Carbon Pricing
www.kapsarc.org