De-Carbonising The Industrial Sector - Part C - Cement Industry

Overview of Cement & Concrete 

Cement is one of the key ingredients for making concrete. Concrete is composed of 10% cement, 20% air / water, 30% sand and 40% gravel. This is an important distinction to make, notably that cement is just one of the ingredients of concrete but a vital ingredient. 

Concrete is abundantly used in the world and arguably the most abundantly used man made material on the planet. Concrete has been in use for a long time and the Romans have used concrete in their structures although modern concrete production methods differ from antiquity methods. 

Modern cement manufacturing commenced in 1824 and is called Portland Cement which is still the predominant approach to cement manufacturing. Whilst western nations used concrete extensively in the 20th century, China since the turn of the millennium has used more concrete than what the US poured in the entire 20th century. This shows the integral nature and importance of concrete when it comes to our modern societies and development. 

Concrete is preferred for under water construction projects. This is because concrete is both fire and water resistant which is one of the key appealing features of concrete. Concrete is used extensively for both residential and commercial construction, infrastructure projects, bridges, roads, dams etc. Concrete has very high compressive strength as well. The largest concrete structure in the world is located in China, the 3 gorges dam which is 185 metres high and 2300 metres long! 

Cement Production Snapshot

In 1970, world cement production stood at 594 million tons. By the year 2020, world cement production stood at 4.1 billion tons! Compare the growth of cement with steel which we analysed in part B. Steel grew from 595 million tons in 1970 to 1.8 billion tons by 2020. This shows whilst steel has been growing at an immensely fast rate, cement has out stripped steel. In fact cement production has been above 4 billion tons per annum since 2014. 

Source: Statista

Again China is the dominant cement producing nation having produced nearly 2.2 billion tons of cement (source statista) in 2020 which means 50% of world cement production is based in China. Unlike steel or petrochemicals, both which are extensively traded, cement is hardly traded and is consumed in the country of production itself. After China, the next biggest cement producer is India standing at around 340 million tons. 

Source: statista 

Cement projections by the IEA hold cement production above the 4 billion per annum mark into 2030 and even into 2050. This is because countries are still increasingly consuming cement to develop infrastructure, roads, buildings etc. The integral nature of cement ensures that cement production is unlikely to sharply taper of in the future.   

In the business as usual case the IEA projects that cement production will trend towards the 5 billion tons per annum mark. However, in a more balanced scenario (Sustainable Development Scenario) because of material efficiency gains, cement production will fall by 2070 to around 3.5 billion tons. Material efficiency can come about by extending the lives of buildings, repair rather than rebuilding, onsite waste reduction and design optimisation.

Already developed countries are seeing cement demand flat to falling as most of the demand is for maintenance rather than new builds. There is also a degree of saturation being observed in China with respect to cement demand. However, this will be counter balanced by India and other emerging economies are expected to increase their demand for cement in the future.  

Cement - Energy consumption and CO2 emissions

Cement production is highly energy intensive. Around 2.8 GJ of energy is needed to produce 1 ton of cement which translates into around 10.7 exajoules per annum of energy consumption for the industry. Energy costs account for around 15% to 40% of total product costs as per the IEA. Coal is the dominant energy source for the industry and fossil fuel provides around 60%-70% of the total energy needs for cement production. 

On the emissions front producing 1 ton of cement generates 0.5-0.6 tons of CO2. Compare this is to steel via the blast furnace route which will produce nearly 2 tons of CO2. Hence, cement is not as CO2  intensive as steel but is still quite intensive. In 2019, the cement industry worldwide emitted 2.4 billion tons of CO2 which meant cement contributed to around 7% of global CO2 emissions. 

Importantly, nearly two thirds of the emissions from the cement industry are process emissions which is a stark contrast to the steel industry where bulk of the emissions result from fuel combustion.  

Cement Production Method 

Unlike steel where there are quite a few methods of production, for Portland Cement it is essentially one and has remained unchanged for around 200 years or so. Limestone (CaCO3) is the prime feedstock for cement. Limestone is heated to around 1500C to 2000C in a rotary kiln in the presence of other additives like quartz, clay etc. Simplistically, CaCO3 under the application of heat becomes CaO (clinker) and CO2. 

This shows that CO2 emissions are fundamentally linked to the production process of cement itself and is a very important concept to remember. 

Clinker is then mixed with gypsum to form cement. 

The videos below show how cement is made. 

https://www.cement.org/cement-concrete/how-cement-is-made

https://www.youtube.com/watch?v=TdxPxfeEUSQ

Cement is then mixed with water/air, sand and gravel to form concrete which is the final building block material. There is a link below to more details around the production of concrete from cement. 

https://www.cement.org/cement-concrete/how-concrete-is-made

Cement production challenges

1. Process emissions : around two thirds of the CO2 emissions from cement manufacturing comes from the process itself. Application of heat to lime to produce clinker results in CO2 emissions. Unless there are alternative materials to clinker, CO2 emissions will continue to take place during the production of cement. 

2. Fossil fuel for combustion: cement kilns need to be heated to 1500C -2000C. Fossil fuel is primarily used for this purpose and within the fossil fuel category it is coal that dominates usage in the cement industry (50% or so). Given the high temperature requirements for the process and kiln design, fuel switching or electrification is not a very easy option.

3. Regional industry: unlike steel and chemicals which are global industries whose products are shipped across the world, cement is a very regional industry. Cement plants are established close to raw material centres or end user demand centres. This implies that cement plants will tend to use more locally available energy sources rather than the most environmentally friendly options. Also given the product is not traded over long distances and there is no ready substitute product for cement provides little incentive to the manufacturers to change their fuel mix or consider carbon capture technologies.

4. Age of asset life - cement plants have an average life of around 40 years since commissioning. Most of the cement capacity in the recent past has been added in the Asia Pac region and the average age of these plants is below 15 years. With high capex costs needed to establish new cement kilns, it is not possible to prematurely retire existing plants and replace them with new cement plants that emit low CO2. Therefore retrofitting existing cement plants is critical.

source IEA. 

5. Indispensable nature of the industry: there are very limited / no alternatives to cement at the moment. Consumption of cement & concrete has only been rising. As countries continue to urbanise and invest in infrastructure and buildings, demand for cement will continue. Cement being largely water and fire proof as a material also makes it very attractive. In addition, the building block for cement is limestone which is abundantly available, making it a preferable choice for all countries.   

Route to decarbonisation 

The route to decarbonisation for the cement industry must start with appreciating the key fact that two thirds of the cement sector's emissions are process emissions. 

There are two key strategies needed in addition to the material efficiency already discussed in the section around Cement Production Snapshot.

A. Clinker to Cement Ratio : there needs to be a fall in the clinker to cement ratio. By reducing clinker and increasing other less CO2 intensive additives into cement the overall CO2 intensity of cement will reduce. Substitutes for clinker include fly ash (from coal fired power plants) or slag (steel production). However, both these two should also decrease as we speed up decarbonisation in general. Other naturally occurring substances that could be used include clay, gypsum, limestone. 

Clinker to cement ratio however has been inching up and reached 72% in 2020 as per the IEA. In IEA's net zero 2050 scenario, clinker to cement ratio must fall to 0.65 by 2030. There are limitations here with respect to how much adjustments can be made to this ratio as cement composition is a highly regulated and safety considerations are paramount. Further, China the world's largest cement manufacturing nation has one of the lowest clinker to cement ratios already. 

B. Carbon Capture Utilisation and Storage (CCUS) : This is the key carbon reducing solution that is prescribed for the cement industry. This is projected to account for nearly 60% of the reduction of cumulative emissions of the cement industry. Note since process emissions are key in cement, carbon capture takes a pivotal slot. CCUS uptake will increase after 2030 by which the hope is for CCUS costs to fall considerably. The IEA projects nearly one cement plant per week of 2 mtpa capacity being fitted or retrofitted with CCUS from 2030 to 2070 and cumulative CO2 capture target of 40 billion tons!  

Other considerations include:

Technological improvements : Expected to be limited as the two main cement producing regions China and India already employ dry kilns with a pre calciner which is the most updated cement producing technology. Energy intensity in the cement industry as shown in the graph below has already been falling over the past few decades hence greater improvements in this regard could be minimal. 

Fuel Switching: The prime fuel for the cement industry is coal. A switch to a lower CO2 intensive fuel such as natural gas, bio fuels and hydrogen is a possibility to reduce CO2 emissions. As temperature requirements for a kiln are high, the ability to switch to electricity is very limited. Given CCUS is the prime strategy to reduce CO2 emissions, more gains can be made by switching from coal to natural gas than say bio fuels as bio fuel sourcing is already constrained in the global system. 

Hydrogen:  Hydrogen use is likely to be limited in the cement industry's transition. This is because considerable capex has to be spent to reconfigure a kiln if hydrogen as a fuel is used. Hydrogen is more likely to be used as a blend along with natural gas rather than 100% standalone hydrogen. Hydrogen requires cement burners etc to be re-designed and new coatings to be applied inside kilns etc which makes it very expensive

In the IEA net zero scenario for cement, coal use is eliminated completely by 2050. Natural gas replaces coal with a energy share of 40% (up from its current 15%), biomass and renewables at 35% (up from its current 5%), hydrogen, direct electrification, oil, others etc is the balance. Hydrogen would be around 10% of the thermal energy by 2040. 

Recent Initiatives in Decarbonising Cement 

As CCUS is the key technology to decarbonise cement manufacturing, lets look at a few projects (links to relevant videos are provided for additional context) currently ongoing that might prove critical and positive towards decarbonising cement. 

Anuhi Conch Cement is the largest cement company in China and has a clinker production capacity of 260 million tons. Anuhi has invested around $10mm in a CCUS facility for one of its plants that will separate and purify 50,000 tons of CO2 per annum. 

Norcem the Norwegian cement manufacturer is also looking at a CCUS project. It has successfully completed a feasibility study, and is now looking to scale it up to industrial levels.  https://www.youtube.com/watch?v=1dv38NhUyoE

Pilot scale project has been successfully completed by CEMCAP in Germany for carbon capture. https://www.youtube.com/watch?v=QSmEJgVKz-A

De-Carbonising The Industrial Sector - Part B - Iron & Steel Sector

Overview of steel

Steel is a fundamental building block for today's modern societies. Steel is used in a variety of applications ranging from transportation (cars, ships, rail, planes), energy generation (wind & solar installations but also conventional energy generation sources), construction of buildings & infrastructure projects, appliances etc. Nearly 68% of a car is composed of steel and more than 80% of a wind turbine's components are steel for example (source: Arcelor Mittal).  

Steel has very high tensile strength, it is malleable, ductile and since it is manufactured, it can be made to a very standardised quality unlike naturally sourced wood. Steel is durable, can be made rust / corrosion proof, is long lasting, can withstand external forces and is light weight. Steel used in construction is extremely efficient as most steel structures can be prefabricated making construction faster, cheaper and safer. Steel is significantly more fire resistant than wood but less so than concrete. Most importantly, steel is 100% recyclable. 

[Paper produced by world steel on the applications and use of steel. A good read in a crisp and informative format.] 

https://www.worldsteel.org/en/dam/jcr:4864507f-7f52-446b-98d6-f0ac19da8c6d/Fact%2520sheet%2520steel%2520applications%25202021.pdf

The importance of steel can be demonstrated by looking back at the growth of world crude steel production. It would make sense to compare steel production growth (source world steel) versus population growth to see how much we are now consuming and why steel is popular and will continue to remain so. 

As the table shows, steel production has outstripped population growth hence we are consuming more steel per capita now than in the past. 

	Population (billion)	World Crude Steel Production (mm tons)
1970	3.682	595
1980	4.43	716
1990	5.28	770
2000	6.11	848
2010	6.92	1435
2020	7.75	1878
Multiplier	2.1X	3.15X

Source: World Steel 

Steel production and consumption is unlikely to abate from its 2020 production level of c. 1.87 billion tons. As per the IEA, in 2019 an average of 240kg of steel was produced per annum per person and this is expected to rise to 260-270 kg per person per annum in the future (STEPS projection scenario) which implies we could be seeing world steel production just shy of 3 billion tons per annum by 2070. In a more environmentally conservative scenario, the IEA projects steel demand to be flattish till 2070 on the back of material efficiency gains. A large part of this future demand could be fulfilled through the recycling of the steel. 

Steel production is highly concentrated in the Asia Pacific region with China accounting for more than 50% of global production with Chinese production in excess of 1 billion tons. China is followed by India at around 100 mm tons followed by Japan at around 88 mm tons. 5 of the top 10 steel manufacturing countries are located in Asia. - worldsteel report 2021. 

The largest steel manufacturing company in 2020 was the China Baowu Group which produced 115 million tons followed by Arcelor Mittal at 78 million tons. 

Source: World Steel

Steel Emissions and Energy Intensity 

Steel is one of the most highly emitting industries on record. Direct CO2 emissions from the steel industry in 2019 as per IEA was around 2.7 billion tons, a staggering number. Most of the emissions from steel are related to fuel / energy combustion versus process related emissions, a contrast to the cement industry. If one considers indirect emissions, then the industry is estimated to have emitted around 3.7 billion tons pa in 2019! 

Steel production is highly energy intensive and the industry is reported to have consumed around 26 exajoules of energy in 2019 and an estimated 15% of world coal demand comes directly from the steel industry. Coal consumption in steel is a significant cause for GHG emissions.   

Steel Production 

There are essentially three routes to produce steel (a) blast furnace, basic oxygen furnace [BF] (b) scrap based electric arc furnace [EAF] (c) direct reduction electric arc furnace [DRI]

In this note we shall review the three alternative approaches to manufacturing steel, their respective pros and cons, the energy consumption and emissions for each of these approaches. As argued in an earlier note, the production of steel is a major component of GHG emissions hence a deeper understanding of the steel industry is essential.

A quick comparison of the three methods across key parameters before we jump into details is provided in the table below. Source of data is IEA

	CO2 emission / ton of steel	Energy Consumed / ton of steel (GJ/ton)	% share of production 2020	% share of production 2050 - Stated Policies
BF/BOF	2.2	21.4	70%	52%
Scrap - EAF	0.3	2.1	22%	36%
Nat Gas / DRI	1.4	17.1	7%	11%

Iron & Iron Ore 

The key building block for virgin steel is iron which in turn is naturally found as iron ore. Hence, before we get into the manufacturing processes of steel, we should spend some time on iron. Iron is abundantly found on the earth's surface however, it rapidly oxidises and hence iron is naturally found as iron ore. Iron ore is the basic / fundamental material used to produce steel. 

As iron ore is naturally occurring, it can be found in varied sizes. The biggest can be c. 1 metre across and the smallest 1mm. Iron ore is therefore classified into fines, lumps and pellets. 

Iron ore can be

A. hematite (Fe2O3) red - 69.9% iron content, 

B. magnetite (Fe3O4) black - 72.4% iron content, 

C. limonite (2Fe2O3.3H2O) brown - 55% iron content and 

D. siderite (FeCO3) - 48.2% iron content and which is pale brown. 

Hematite and Magnetite are the two most commonly occurring forms of iron ore.

Now we come to the steel manufacturing process itself.   

Blast Furnace, Basic Oxygen Furnace [BF]

The BF route is currently the most dominant method of producing steel. Around 70% of steel manufacturing happens via the BF route and as shown in the table above, this process is highly energy intensive and emits significant CO2. The BF route is used to produce virgin steel as the steel produced via the BF route starts from naturally occurring iron ore.  

Three basic feeds for the BF are namely iron ore, coke (charcoal) and limestone plus hot air. The BF needs to be heated up significantly to around 2000C [such high heat requirement needs fossil fuel combustion]. 

Without getting into detailed chemistry, the objective is to split the iron from oxygen and carbon is used as a reducing agent in this respect. In many cases carbon is first turned to carbon monoxide CO to make it a more efficient reducing agent. The limestone on the other hand is used to react with the sand (comes along with the iron ore) to produce slag which comes out at the bottom of the furnace. Along with slag comes molten iron (iron largely free of oxygen) which is referred to as 'pig iron'. 

If you are keen to dig slightly deeper into the chemical equations then you can view this instructional video which I think does a pretty decent job in explaining the chemical equations

https://www.youtube.com/watch?v=UjBrZCNVt_s . 

Now its clear that two things are happening here which should result in GHG emissions. First high heat required to be produced by fossil fuel combustion, a major source of emissions. Secondly, as the above process shows, carbon / carbon monoxide act as reducing agents to produce pig iron but the by-product of this is carbon dioxide! 

The pig iron produced by the BF contains more carbon than optimally needed making pig iron brittle. To over come this, pig iron is further processed by heating pig iron along with some scrap steel and pure oxygen to eliminate carbon to produce crude steel. This second process also generates CO2 however, 80% or so of CO2 generated in steel making via the BF route occurs during the first stage itself. 

Scrap - EAF

This is a secondary method of producing steel as this method cannot use iron ore but instead requires scrap steel (recycled) for production. In this process, scrap steel is melted using electricity via graphite electrodes. Scrap steel is first sorted then heated and charged into an EAF along with lime. When an appropriate load of scrap steel is lowered into the EAF, the electrodes are lowered and an arc is generated to melt the steel. Additional chemical energy is added to the process via natural gas or oxygen. 

The primary disadvantage of this process is the need to source scrap steel and then sort the scrap steel before the EAF process commences. This process cannot use iron ore which is the naturally abundant form of iron. The biggest cost item for the EAF route is the cost of scrap steel. However, given steel is highly recyclable commodity, the use and importance of EAF is only growing. Further EAF use electricity rather than fossil fuel making it attractive route for decarbonisation of the industry.  

Around 70% of existing steel manufacturing in the US occurs via EAF. China on the other hand, the world's largest steel producer, is overwhelmingly BF approach right now (around 89%). 

Direct Reduction - EAF (DRI)

In this approach iron ore is reduced to pig iron in the solid state. This process requires higher quality iron ore as compared to the BF process. The degree of flexibility around iron ore quality is much less in the DRI process as pollutants in the iron ore cannot be removed in the solid state. The reduced iron is then melted into a liquid form in an EAF as a second step to produce crude steel. 

The key reducing agent in the BF route is carbon and carbon monoxide. In the DRI route, the reducing agent is a combination of hydrogen and carbon monoxide (syngas) which again leads to CO2 emissions but in lower quantum as compared to the BF route. 

The key feedstock used is natural gas to generate carbon monoxide and hydrogen (syngas) although in some countries coal is also used. As the iron ore descends from the top of the furnace in solid form, the syngas is fed from the bottom which reduces the iron ore to iron. The iron is then further processed in an EAF to produce steel. 

DRI is used when scrap steel availability is not enough to generate steel in quantity or when the demand needs are not sufficient to support a BF operation.   

For more information on DRI watch the following video by Midrex the leading DRI technology provider

https://www.youtube.com/watch?v=t8_yNvvs9bE

https://www.midrex.com/

The attached note below is from world steel dynamics and shows their view on the steel manufacturing processes as of 2019 and how the methods could evolve by 2050. 

https://www.aist.org/AIST/aist/AIST/Publications/wsd/WSD-February-2021.pdf

Impact of steel making on the environment 

The importance of steel is unquestionable as steel is being used by all countries across sectors. Steel has  become an integral backbone of modern societal development. However, as demonstrated above the production of steel is energy intensive, uses considerable fossil fuel and CO2 emissions take place intensely across fuel combustion as well as the process itself. At 2.6 billion tons per annum of direct emissions, the industry is without doubt a massive contributor to GHG emissions. 

There is no one path to decarbonise the steel industry and neither is there one specific technology that can be adopted. All plans rely on three critical pillars namely (a) improved efficiencies at site (b) greater recycling of steel and (c) break through technologies in the future. 

Improved Efficiencies 

Steel manufacturers around the world will continue to focus on improved efficiencies ahead of adopting breakthrough technologies of the future. Historically the steel industry has been working hard to enhance energy efficiencies and since the 60s energy intensity for steel making has dropped by 60%! As energy costs range between 20%-40% of total costs, energy efficiency is a key focus for the industry from a profitability perspective as well. 

In this phase, improvements will be secured around iron ore / scrap quality improvements, energy efficiency, process yields and process reliability. If this were to be successful, world steel believes that CO2 emissions will drop by 20% for BF / DRI routes (ore based) and by 50% for the EAF approach (scrap based). 

Greater Recycling 

Steel is a highly recyclable commodity and recycled steel is used in both EAF as well at the BF route albeit in different proportions; 100% for EAF. Current recycling rates stand at around 85% as per world steel estimates hence the ability to greatly improve via greater scrap collection percentage is limited. 

Scrap does play a vital role in reducing the demand on raw materials and energy. As per world steel one ton of scrap steel that is recycled can reduce the emission of CO2 by 1.5 tons and reduce coal consumption by 740 kg. 

The optimistic view is as global steel capacity jumped in the 2000s and life span of steel structures is 30-40 years, a fair amount of scrap steel should become available over the next decade or so which should be a net positive for the industry.  

Breakthrough Technologies 

Breakthrough technologies are not commercially available or feasible today. They are mostly in pilot stages waiting to be commercialised. The coming decade should demonstrate greater interest and investment flowing into these technologies, failing which net zero ambitions for the world at large would become challenging. The breakthrough technologies can be divided into two main categories. 

A. Using fossil fuel or bio fuels as a reducing agent but using carbon capture techniques (CCUS) to capture the CO2 emitted. Under the IEA's Sustainable Development Scenario by 2070, 75% of CO2 produced will be captured and stored. This requires a massive scale up of this technology from current levels. CCUS could potentially be retrofitted to all types of steel making units. Transportation & storage of CO2 though over distances becomes a huge challenge with CCUS. There is also the potential for cost increases from using CCUS facilities in steel manufacture and costs can rise by more than 10% and more. This would make many plants unviable without supportive policies. 

The world's first commercially viable CCUS steel facility is now underway at Emirates Steel. It captures 800,000 tons of CO2 which is captured, used and stored in underground oil fields in the Emirates. This is a DRI plant that uses natural gas CH4 to produce hydrogen and carbon monoxide as reducing agents. This results in CO2 being produced but instead of the CO2 being emitted into the atmosphere, it is captured at source. 

For more details of this project you can review the slide pack link, https://ieaghg.org/docs/General_Docs/9-11-15%20Presentations/P3_4_Abu%20Zahra.pdf 

B. Using hydrogen as a reducing agent which would result in water vapour being produced instead of CO2.   

In the DRI process, where fossil fuel such as natural gas or coal is used, iron ore gets reduced to iron but CO2 is generated in the process. If instead hydrogen is used as a reducing agent, then water vapour gets produced. Whilst H2 is being used in DRI, it is not used exclusively but in conjunction with carbon as a reducing agent. For a complete net zero emissions process, the endeavour would be to use green H2. Besides use in DRI, there are also plans to use H2 in BF as well as a blend. 

In future notes I shall write about CCUS and H2 applications for the industrial sector in general in more detail. 

Conclusions and path to net zero for steel

As per the IEA, in their Net Zero scenario, there is a steep fall in CO2 emissions from the steel industry. From a current rate of 2.4 billion tons pa to 1.8 billion tons by 2030 to 0.2 billion tons by 2050. This is despite production of steel remaining flat to slightly increasing over the same duration. The key reason for this sharp drop is the reduction in use of fossil fuel (although the use of fossil fuel / coal does not go to zero even in 2050).

The big shift / transformation is the move from coal to electricity as the EAF production method gathers considerable market share on the back of greater steel recycling. Electricity therefore plays a vital role in the industry and its share of energy source for the industry rises from 15% in 2020 to more than 70% by 2050. Electricity also is used in the production of H2 which is used in the DRI process as a potential low carbon / zero carbon option. 

Irrespective of the model or path for steel's decarbonisation, one thing stands out that there is no one single solution that will help decarbonise the entire steel sector. In summary, the following solutions will all have to be applied simultaneously to achieve a net zero position.

1. Energy efficiency to reduce the use of energy required per ton of steel produced 

2. Circular economy - recycling rates of steel is improved as energy requirements for converting recycled steel into steel is much lower than virgin steel

3. CCUS adoption - where fossil fuel is used as a reducing agent and CO2 is generated, CO2 can be captured and stored using CCUS technologies  

4. H2 - H2 can be used as a reducing agent in DRI processes to produce water vapour instead of CO2. H2 can also be used as a partial feedstock / injection in a blast furnace to reduce reliance on fossil fuel. 

5. Use of biofuels as a feedstock for energy. Whilst this produces CO2, the biofuel has been produced via an equal amount of absorption of CO2 from the atmosphere which then nets out. 

6. Greater electrification of the steel making process by relying more on EAF than BF/BOF and then also working towards a green power grid.    

7. Material efficiencies which includes better scoping of projects, using just the optimal amount of steel, building life extension and more modular design that uses less steel 

Additional links and resources 

Below are links to some of the innovations currently taking place in the steel industry. I have shared a few youtube videos that provide some additional context for the reader. 

A. HIsarna process: Tata Steel and others are engaged in this new development plan. This approach is aiming for ultra low CO2 steel where iron ore is reduced in just one step and very efficiently. This process does not need the use of coke as a reducing agent. 

https://www.youtube.com/watch?v=kdmjrO4sroA

B. SALCOS process: This process is aiming to use hydrogen (plus some % of natural gas) as a reducing agent and directly reducing iron ore to iron. This process is looking achieve 85% reduction of iron ore with around 50% drop in CO2 emissions.

https://www.youtube.com/watch?v=IPlwjg0G8yo

C. HYBRIT: a process being developed in Sweden to generate net zero steel. This is again a direct reduction process using H2 instead of coke as a reducing agent to produce pig iron from iron ore and then ultimately steel. 

https://www.youtube.com/watch?v=zk5-8DM0OvA

https://www.youtube.com/watch?v=GdR1lScN8HY [part 5 is the most interesting]

D. Hamburg / Arcelor Mittal - development of a H2 reducing pig iron, steel plant. The plant aims to only use H2 as a reducing agent to dramatically reduce CO2 emissions. Whilst it will use grey hydrogen as a start, it will move to green hydrogen when it is available.

https://www.youtube.com/watch?v=McJ8YHAaciI

Decarbonising The Industrial Sector - Part A

A lot of attention, focus and success in the last decade has been centred around decarbonising the power grid and developing electric vehicles. Admirable progress has been made in both these areas in a very short span of time and results are evident. The levelized cost of solar and wind generation has been falling dramatically and has now become very competitive vis-a-vis traditional fossil fuel generation assets. Likewise, EV's are fast becoming the vehicles of choice across many geographies and EV sales have held up whilst ICE vehicles faced considerable headwinds because of the pandemic. 

However, we have heard very little when it comes to carbonising the industrial sector. Is it because most green house gas (GHG) emissions occur in the power generation space or through tail pipe emissions? The answer is actually an emphatic no! 

As per most independent studies, the lion share of GHG emissions happens in the industrial sector, more precisely in the heavy industrial space. By heavy industries, I mean three core ones - Iron & Steel, Cement and Petrochemicals. 

Despite heavy industry being at the cornerstone of GHG emissions there is limited material out there that dwells on this problem. Through this note, I aim to share with you some key aspects of the heavy industrial sector so that you can take away these facts and form a more informed judgement on this very critical issue. 

A brief note of caution for the reader. I have shared sources in this note wherever possible; for any omissions I do apologise in advance. To determine the exact quantum of emissions is challenging for any analyst. This is a subject that is evolving and data analysis is subject to a lot of interpretation. My aim here is to share data from various sources but the overriding purpose of the note is not to focus on the precise number but to absorb and reflect on the magnitude of the problem at hand. 

Let's begin then. 

GHG Emissions by the Industrial Sector 

The annual GHG emissions (CO2, methane, nitrous oxide etc) from human activity including agriculture are estimated at 51 Giga tons (51 Billion tons). Whilst 2020 emissions fell due to COVID, we should work with this number as a start. Bill Gates in his book - How To Avoid A Climate Disaster references this number extensively. If I look at the site Our World In Data, total GHG emissions over the most recent years hovers around the 50 Giga ton mark. So for the purposes of this note, we shall stick to 51 Giga tons. 

We now need to drill a bit more into this 51 Giga ton number. What is it composed of and where do emissions come from? 

Based on Our World in Data, CO2 accounts for 75% of GHG emissions, methane is around 17%, nitrous oxide is about 6% and the balance is other gases. So CO2 forms the bulk of GHG emissions but it is not the only gas that causes this issue. Additionally, each of these gasses has very different properties with respect to heat transmission and absorption but this is not the focus of this note [There is extensive literature out there on this topic hence I shall not dwell upon it in this note].

Coming to the second question, where do these emissions come from? About 73% of the emissions arise from the use of energy (burning fossil fuel to produce energy), around 20% arise from agriculture and land use and the balance from process emissions and waste.   

Drilling down further demonstrates around 24% of the total emissions takes place on account of energy usage in industry. Additionally, around 5% of emissions take place because of process related emissions arising out of industrial manufacturing processes itself. The combined effect is staggering and clearly demonstrates that the industrial sector is the chief emitter of GHG emissions and must be studied in greater detail.   

The Industrial Sector 

The industrial sector is very broad and encompasses many industries that manufactures diverse products including many intermediary products. A broad classification of the industrial sector could include (a) ferrous metals (iron & steel), (b) non - metallic (cement, lime) (c) aluminium (d) petrochemicals and polymers (e) pulp, paper, forestry (f) food, tobacco etc (g) glass, silicates (h) others. 

For the purposes of this note we shall focus on the three heavy industries namely:

• Iron & Steel
• Cement 
• Petrochemicals and polymers 

These three industries generate the bulk of GHG emissions within the industrial space and focussing on them is an excellent way to understand the challenges but also potential decarbonisation solutions. 

During subsequent notes, I shall go into each of these three heavy industries in greater detail. For this note I will share a few interesting facts about each of them before getting into the main body of the note which is why these industries are challenging to decarbonise. 

Iron & Steel: Firstly, 1 ton of steel production generates around 1.4 - 2 tons of CO2 (this is based on the most widely used steel manufacturing technique namely the blast furnace / basic oxygen furnace; there are many other techniques to produce steel). 

Total world crude steel production in 2020 was 1.8 B tons with China producing over 1 B tons and India coming next at around 100 million tons. To put things in better perspective, in the year 2000, global crude steel production was 850 million tons meaning that steel production has more than doubled in the last 20 years! 

Estimates of direct CO2 emission for the Iron & Steel industry centre around 2.6 G tons per annum. If indirect emissions are considered then the estimate is around 3.6 Gt. Steel making is highly energy intensive consuming more than 25 exajoules of energy or around 7%-8% of total global energy consumption which ties in with the fact that steel making is a high CO2 emissions industry. 

Cement: Production of 1 ton of cement generates around 0.5/0.6 tons of CO2 which makes it another high CO2 emitting industry. Basis the IEA, the industry emitted around 2.4 G tons of emissions in 2019; a staggeringly high number for a single industry. Cement production is also highly energy intensive with 3 GJ of energy being used to produce one ton of cement. Basis some independent estimates, the total energy consumption of the cement industry is around 15 exajoules per annum. 

World cement production in 2020 touched around 4.1 billion tons and has been around the 4 billion ton mark for nearly a decade now. In the year 2000, global cement production was just slightly north of 1.5 billion tons which demonstrates that production has nearly tripled over the last two decades! China produces around 2.2 billion tons of cement making it by far the largest cement producing country in the world. 

Petrochemicals and Polymers: The petrochemicals & associated industries are the largest energy consumers in the world with estimates of energy consumption per annum touching nearly 50 exajoules. Bulk of the energy consumption in this industry comes from fossil fuel. However, emissions are not as high as one would expect given the massive fossil fuel energy consumption. This is due to the fact that carbon from fossil fuel forms an integral part of the finished product. 

Worldwide plastic demand is the fastest growing bulk / heavy industry product outpacing global GDP growth, cement or steel. Production center for petrochemicals, polymers etc is the Asia Pacific region with around 50% of the global output and China dominates production capacity within the AsiaPac region. 

This sector is immensely diverse & challenging, the end products are multiple, many processes and approaches all leading to massive challenges around decarbonising the industry. 

I shall be writing individual notes on all the above three sectors in a bit more detail. The purpose of introducing these three industries here was to give the reader a flavour of these three industries which form the bulk of GHG emissions in the industrial sector. 

Now we come to the main point of the note. Why is it hard to decarbonise the industrial sector? Why is the industrial sector associated with the term 'hard to abate'? 

I did argue at the start of this note that much of the media and discussions steer towards decarbonisation of the power grid and cleaner electric vehicles whilst the industrial sector has languished in terms of coverage.  Let us focus in greater detail on what the specific challenges are hence why scant attention has been paid to this segment.

A. High temperature requirements:  Industry in general and heavy industry in particular needs high temperatures for many of its processes. In many cases temperatures needed are in excess of 1,000 celcius. Blast furnaces, petrochemical complexes all operate at very high temperatures and this high temperature generation at the moment can only be achieved via fossil fuel combustion. Combustion of fossil fuel is a near automatic cause of the GHG emission. At such high temperatures, electrification as a means to generate heat is not viable alternative and hence the industry sticks to fossil fuel combustion.  

B. Process emissions: The cement industry is an excellent case in point. The chemical process used to produce clinker which is ultimately used in the production of cement itself emits CO2. What this means is emitting CO2 is a must to produce the final product. In a separate note around cement (to be published in due course) we can get into more details but this is a key and fundamental issue why CO2 emission is hard to abate. The petrochemicals sector on the other hand uses some of the carbon from fossil fuel in the final product hence CO2 emissions from this sector are not as high as one would imagine given it consumes an incredible amount of fossil fuel. 

C. Industry characteristics: Heavy industry in particular is characterised by large capex, low margins, cyclicality and low R&D spend. Compared to the life sciences or technology industry, heavy industries like iron & steel spend very little on R&D. Process improvements have been slow and marginal over time. Further, as the margins are slim and the industry very cyclical, it prevents large financial resources being spent on optimising the process or reducing emissions. The ability to develop a completely radically new approach is very challenging. 

D. Highly traded nature of products: This applies to the iron & steel and petrochemicals industry. Cement is not a highly traded product and consumption generally takes place where it is produced. As the end products are highly traded, with slim margins and little product differentiation, it comes down to price as the key determinant. When price becomes the key determining factor, there is little incentive for the producer to spend large amounts of money on anything other than reducing the cost of production. Another related issue is whilst emissions are occurring in one country, consumption of the finished goods may be taking place in another country and this massively complicates issues. Border adjustment tax is one recent legislation being discussed in Europe to adjust for this problem. 

E. Integral nature of end products: the end products produced by heavy industry have now become integral to our living. For developing nations, the demand for steel and concrete is directly to developmental growth and infrastructure build out. Plastic consumption is rising across the board and is at a faster growth rate than global GDP growth rates. Whilst COVID may have temporarily blunted the growth in some sectors, it is back to near normal again in most. Product substitution is very challenging, for example no zero carbon substitute for steel exists today at any comparative cost. Even within the developed world where building & infrastructure activity is not as frenzied as developing countries, demand has not cratered and come to zero. 

Further, for many of the low carbon solutions in other sectors such as power generation, the requirement of steel & concrete is fundamental as shown in the graph below. 

 

F. Age of assets: Unlike the consumer goods or the high tech world where asset life is just a few years, steel mills, cement plants are long life assets (hardly anyone refurbishes a smart phone). Most heavy industrial assets have an asset life of 30-40 years and at some point in their mid life they are refurbished to extend the asset life. Hence, any decisions taken today to either build a new plant or to extend its life will have an impact many decades from now. The ability to set up entirely new plants with new processes is extremely challenging and not a viable solution. Retrofitting and making modular adjustments or trying to amend the fuel mix are therefore some potential solutions. In subsequent notes we shall touch these solutions in greater detail.  

As mentioned earlier in this note, China is a key player in the heavy industry space and has around 40%-60% of global manufacturing capacity in most of these sectors. The graph below from IEA shows the age of iron & steel and cement plants in China. Blast furnaces on average are 12 years old and cement kilns are 13 years old on average compared to their useful life of 40 years. These are therefore very new assets and have many years to go before they can be retired and this underscores my point that simply replacing assets is not a viable solution. 

In the next note, we shall look at the Iron & Steel sector in a lot more detail. In that note we shall review the main processes to produce iron & steel, how demand has grown, where its produced, the key challenges around CO2 emissions, some of the potential solutions the industry is looking at and how the next decade will shape up for this industry. 

Subsequent notes will cover cement, petrochemicals, hydrogen and carbon capture techniques. I hope that after reading all the notes, you will appreciate the challenges of decarbonising the entire global economy and pay much greater attention to government policies and technological developments in the heavy industry space. 

China's Leaders From Mao To Now - David Shambaugh

China's Leaders from Mao to Now is a book written by David Shambaugh, a political strategist, professor and a long time contemporary China expert. He is a professor at George Washington University in the US and focusses on Chinese politics, political systems, modern China, China foreign relations, the Chinese security apparatus and Asian International Relations. He has written extensively on China & the Chinese Communist Party, has lived in China, studied in China and has observed China very closely for decades. 

I have read another book written by David - Where Great Powers Meet - a book about the countries of South East Asia and they being at the epicentre of US / China conflicts across investment, trade and diplomacy. Both these books are written with a lot of data and information, akin to a serious text book but aimed at the average reader rather than a political affairs journal. This makes it an easy read yet provides the reader with considerable perspective on the topics. My understanding of China's leadership has been greatly amplified after reading this book.

For any country leaders matter. Leaders are there to project the image of the country, leaders get associated with the history and legacy of the country, they formulate the present and construct the future. Understanding leaders is part of understanding a country. In China's context that becomes significantly more important. Unlike countries like the US, where leaders have to contend with institutions, opposition parties, a vocal electorate and an intrusive press, in China leadership plays an extremely pivotal & influential role. In a centralised, command and control apparatus state with limited checks and balances, the leader of the state plays an outsized role that shapes generations.  

This book attempts to profile, evaluate, compare and contrast the five key paramount leaders of China from Mao to Xi and present the reader with a deep analysis of their leadership styles. After reading this book, I was able to understand in significant detail how the leadership in China has evolved and how each leader has differed resulting in major inter generational shifts. As I mentioned earlier, in a strict command and control state like China, what the leader does, his (there has been no her so far) style, his background, his vision and approach and ascent to power matter immensely. China is a relatively opaque country with few institutions and data dissemination is strictly controlled, hence understanding the CCP and the paramount leader is vital in understanding China. 

In my review, I shall summarise in just a few lines what I learnt about each leader from Mao to Hu Jintao. I do this for a couple of reasons. For leaders like Mao and Deng, many books have been written on these two personalities given the transformational impact they had on the country. I would suggest people to read them to get a better understanding of the personalities should they want a very detailed understanding. Secondly, the leadership impact from Mao to Hu Jintao is slowly but surely fading away hence a more detailed analysis of Xi's leadership is merited. 

With that in mind, this is what the book says about these five paramount leaders of modern China. Note these are all David's reflections and not mine. Also this being a succinct book review, it cannot capture all the points, details and nuances that David covers in his book.  

Mao Zedong : the author's last sentence in the book about Mao best summarises Mao's impact on the country. According to David "Mao's greatest accomplishment was to unify the nation - but his greatest failure was to tear it apart" Mao led China from the founding of the PRC on October 1, 1949 till his death in 1976 and had an oversized impact on the country. He favoured a strong personality cult and devotion approach, remain in a constant state of revolution, was enthusiastic in exporting his revolution to other countries, deeply disliked institutions & intellectuals. Hence Mao's China was noted for a number of mass people movement events like the Great Leap Forward, The Cultural Revolution, Hundred Flowers Campaign and the Anti Rightist Campaign. For Mao, revolution to gain power was not sufficient, there had to be constant revolution thereafter to ensure ultimate goals are achieved even if the goals themselves could be unclear. 

The effect of these campaigns was disastrous, millions lost their lives and the country remained in a constant state of flux, anxiety, confusion and insecurity. There were repeated purges of leadership across the CCP and no one felt secure outside and within the CCP; the only constant throughout this long period was the presence of Zhou Enlai. 

Mao was firmly entrenched in Chinese foreign policy and played a key role in building a strong relationship with the Soviets but then oversaw the complete cratering of this relationship and the two nuclear nations were on the brink of war by 1969. Mao played a key role in the Korean War. From a foreign policy perspective, Mao is best remembered for his historic meeting with Richard Nixon in 1972, an event that might be counted as one of the most significant events of the entire 20th century.  

Deng Xiaoping : Deng served as China's paramount leader from 1978 (his impact preceded his formal title) till 1989 and is widely recognised as the architect of the economic rise of China. Unlike Mao, Deng was pragmatic, an institutions man,  consensus builder, welcoming of divergent opinions and seeker of expertise. Unlike Mao, Deng was not entirely distrustful of the West. Deng also recognised China's frailties as it emerged from the years under Mao. 

Deng inculcated changes to the PLA after it failed to achieve its objectives in the 79 Sino Vietnam war. Deng also led the structural reforms of the economy and the establishment of special export zones in the coastal regions of China. Deng worked hard to strengthen the CCP apparatus and re-build an institution to govern which is in contrast to Mao who decimated the party. Deng widely travelled outside of China unlike Mao (who only left China twice to visit the Soviet Union) and embraced western economic principles. Deng is famous for his visits to Singapore, Japan & the US and his astuteness in recognising how countries like Singapore and Japan had leap frogged whilst China was languishing linked to an outdated ideology. Deng preferred to delegate unlike Mao who was totalitarian and utterly centrist in his approach. 

However, it does not mean Deng the economic reformer was the political reformer. Deng was ultimately responsible for brutally quashing the Tiananmen Square protests in 1989 that resulted in the PLA taking aggressive actions against the protestors that led to thousands of civilian deaths. Ultimately, Deng is remembered as the man that picked up the post Mao pieces of China, applied pragmatic and rational thinking, readily accepted the weaknesses in China, unleashed economic reforms, and carved the path for the rise of contemporary China.    

Jiang Zemin : The unnatural candidate who was thrust into the paramount leader position after Deng was Jiang Zemin. Before Jiang assumed his role and position, very few in China knew of him and fewer expected him to helm the ship. Upon his appointment, many expected Jiang Zemin to be a 'flower pot' and last a few years before a big shake up would produce a new paramount leader. Jiang defied these expectations, lasted two full terms and his power and influence was felt even after he has left his formal positions. Jiang and his chosen ones continued to impact Hu Jintao's first term in office. Jiang was the first of the technocrat trained leader for China, having studied electrical engineering and worked in Soviet Russia which marked a change from Mao's and Deng's backgrounds. 

Jiang's foremost challenge was bringing China back into the international fold following sanctions and widespread condemnation post the Tiananmen Square tragedy, a task he managed adroitly. Jiang Zemin is also famous for presiding over the peaceful transition and hand over of Hong Kong from the UK to China after he clearly indicated that China would not extend Britain's lease over the island colony. Jiang is also instrumental for the development of the 'one country two systems' concept that would characterise Hong Kong's handover.  Jiang turbo charged the economy although many would accuse the Jiang Zemin period of high but unequal growth that favoured the coastal regions (Shanghai especially) and highly environmentally degrading. However, looking at Chinese GDP growth during his tenor, the verdict is clear; a high of 14% (1992) and on average remained above c. 8% level for his entire term is incredible. Jiang Zemin definitely scored high when it came to steering the Chinese economy. 

As a personality, Jiang was unlike Mao and Deng and unlike any other Chinese leader. He was outgoing, confident, went off script at times, gregarious and keen to engage. Most importantly, Jiang's term as paramount leader coincided with momentous events in Europe including the fall of the Berlin Wall, dismantling of communist states like Poland, termination of the Warsaw Pact and the ultimate - dissolution of the Soviet Union in 1991. 

For China and the CCP this was one frightening event and many political watchers would commence writing the obituary of the CCP as well. After all, the fountainhead of inspiration for the CCP was the Soviet Union and here in 1991 the almighty Soviet Union itself collapsed. But the events in Europe did not result in the same outcomes in China and under Jiang Zemin the CCP did not unravel and the political system remained unchanged. From this point on, all political leaders in China will continue to evaluate and analyse the fall of communism in the West and seek their own independent assessments to prevent the same from impacting the CCP. From a foreign policy perspective, Jiang Zemin focussed his efforts on the larger powers notably the US, Russia and the EU during his term in office.

Hu Jintao : Hu Jintao assumed office in 2002 and ran for two full terms. Unlike Jiang Zemin who was catapulted into the top job as an unknown, Hu was anointed as a possible fourth generation leader by Deng himself. According to David, Hu had a decade to prepare for the job, a stark contrast to his predecessor but did not use that decade wisely and when he did secure the top job as paramount leader, he lacked a wide base and appeal. Hu Jintao's personality is also a direct contrast to Jiang Zemin and is considerably more measured, sterile, entirely scripted and never veered off the agreed path. Hu Jintao's and Wen Jiabao's (State Council Premier) ten years in power are widely considered by the Chinese as 'ten lost years'.  

Economically, Hu Jintao adjusted his predecessor's approach to the economy. Growth at all costs was modified to have a more inclusive growth model. Jiang Zemin had favoured coastal development and Shanghai based businesses. Hu Jintao started to focus on the internal provinces and tried to adjust the gap between the coast and the interiors. He also focussed on the environmental aspect of growth which was neglected under Jiang. Annual average growth rate under Hu Jintao was a staggering 10.5%. 

Hu Jintao continued to try to reform and liberalise the party and the country. However, he had limited success and especially by his second term, hardliners had a more dominant position than him in decision making. Hu Jintao also presided over three key events for China namely the Beijing Olympics, the Shanghai World Expo and the 60th anniversary of the PRC. Again Hu Jintao demonstrated a steady hand across all three events. Hu Jintao also made a major foreign policy pivot by engaging the wider international community. Whilst Jiang had largely focussed on the leading western nations, Hu Jintao began to engage the global south. China's outreach to African nations and other developing nations occured under Hu Jintao's tenor. Hu Jintao also was the first to stress the importance of 'soft power' when it came to global outreach. Relations with the US and Taiwan were also positive and according to David best across decades. 

David does argue, Hu Jintao did not fully establish his own personal mark across his two terms. The initial portion of his term was partly influenced by Jiang Zemin who continued to maintain his presence despite his term having ended. The latter part of Hu Jintao's term was impacted by the rise of conservatives namely Bo Xilai and Xi Jinping. Unsurprisingly, 2009-10 is marked as a pivotal year for China - "the year of assertiveness". This marks the time when China's relationship with its neighbours and the wider international community began to take more antagonistic proportions and change course. 

David feels that whilst Hu Jintao has been judged as a weak and ineffective leader and his two terms characterised as a lost decade, he may, over time get better recognition for the work he was able to accomplish and secure a more positive verdict. 

Xi Jinping : Xi Jinping ascended to the top job in 2012 and is the current paramount leader of China. According to David, Xi marks a major break in the leadership style and approach compared to his predecessors. When Xi took the top job, few really understood what he really stood for and that he would bring about momentous changes on all fronts. 

First big change compared to the other leaders is gained by understanding Xi's background. Xi's father was a very senior leader in the CCP, had fought alongside Mao, was chief of CCP propaganda, Vice Premier under Zhou Enlai; essentially up there at the very top of the CCP. Xi thus had a very privileged childhood until is was all completely upended by the Cultural Revolution when his father was purged in 1962. Xi has spent many years in rural China (read that as hard labour) and the family was disunited for more than a decade. Xi's father was finally rehabilitated and under Deng was appointed as Party Secretary of Guangdong Province where he was instrumental in starting up the famous SEZs . Xi therefore comes a very privileged background but has also witnessed a tremendous shock to the family. Xi's first wife's father was China's ambassador to the UK and his second wife Peng Liyuan a solider and singer for the PLA. "He has iron in his soul" - is how Lee Kuan Yew describes Xi Jinping and when LKY has a viewpoint it means something. 

When Xi ascended to power his first speech emphasised the need for China to regain preeminence among world nations and become a powerful nation. For Xi it was not about reform and opening up, it was about global preeminence. The other key point that Xi emphasised was a severe crack down on corruption, something that Xi has been associated with for a long time before he took the top job. The third dimension that was added by Xi according to David was the primacy of the CCP. "no CCP, no new China" hence the CCP is inextricably linked to the growth and development of China and is a vital part of China. The fourth dimension that was added is crucial and described below. 

From the fall of the Soviet Union, the CCP begun detailed analysis of the causes of the fall and what went wrong. Two distinct schools of thought emerged. The first school centred its thoughts and conclusions that Gorbachev's reforms were correct but was a case of the reforms being too late. The rot had been there for years, probably from the time of Leonid Brezhnev and hence the party failed as reforms came too late. This was the school of thought that Jiang Zemin and Hu Jintao subscribed to and pursued incremental reforms as a means to strengthen society and the CCP. However, according to David, there is a second school of thought; one that says the reforms itself precipitated the crisis and led to the dissolution of the Soviet Union. This is a thought Xi Jinping subscribes to and hence according to David, in this approach political reforms, individual freedom and devolution / de-centralisation of power would result in chaos and would led to weakening / disbanding and not strengthening the CCP. Hence, utmost control should be maintained over the political system, security apparatus and the military establishment.      

In David's opinion the current leadership style is retrogressive rather than progressive and is deeply rooted in the early founding of the PRC. Xi has nostalgia for the 50s and 60s when Soviet influence was very strong. That also means rolling back many of Deng's initiatives, something David refers to as 'Dismantling Denigism'. Deng as noted above, preferred no personality cults, consensus based decision making, devolution of power, feedback mechanisms from the people to the party, term limits and relative individual freedom. Deng was also cautious and circumspect when it came to foreign relations preferring to bide time. 

Xi on the other hand, and I quote here from David's book "... Xi absolutely and unapologetically rejects the linkage of progress with liberalism. Quite the contrary, Xi is a hardcore Leninist, and in some ways a throwback to the Stalinist era". But unlike Mao, the CCP, the party, its functions, establishment, pervasiveness etc matter paramount to Xi but like Mao it is coupled with a larger than life image of the paramount leader that is omnipresent across all dimensions of life. The party's primacy must also be reflected in economic affairs, which is a direct contrast to Deng who preferred to unleash the Chinese entrepreneurial spirit and private enterprise. 

David's book has many specific sub chapters under Xi Jinping's leadership, strategies and ideas thats cover vital topics like Dismantling Dengism, Navigating The Middle Income Trap, Revamped Repression, Military Reforms (whilst Xi has not served in the PLA he is extremely close to the PLA and has made military reforms and modernisation his top priority along with strengthening the CCP) and Foreign Policy (BRI, Wolf Warrior Diplomacy, Global Engagement Outreach, China Rejuvenation). David strikes a very cautious, sombre and a rather ominous tone which causes the reader to reflect considerably on potential outcomes for China.

[For more information the reader can also review and read about some of the other key people that form the close leadership besides Xi include Wang Qishan, Vice President; Li Zhanshu; and Wang Huning - "China's Kissinger". 

I have also taken the liberty here to include a link to an important webpage that one would learn a lot by reviewing it. There are some incredible insights from a person who has been consulted by everyone from Deng to Xi Jinping and likewise from Nixon to Obama. 

https://www.belfercenter.org/publication/lee-kuan-yew-grand-masters-insights-china-united-states-and-world]

Overall, the book is a great read and provides a lot of deep insights into many key personalities that have impacted China's modern history. For anyone who is keen to better understand China this would be a valuable read and good reference point. 

https://www.amazon.com/Chinas-Leaders-Mao-David-Shambaugh/dp/1509546510

To Rule the Waves - Bruce D. Jones

To Rule the Waves is a book written by Bruce D Jones, a senior fellow at The Brookings Institution. The book illuminates how the control of the world's oceans shapes the fates of the superpowers. Bruce directs the Project on International Order and Strategy of the Foreign Policy Program at Brookings and is therefore optimally placed to write about maritime strategies, world order and the power of nations. The book has been published by Simon & Schuster, Inc in 2021 and hence provides a very updated insight into some of the most critical issues such as the South China Sea militarisation which directly affects us living in Asia. 

The book has four parts that are closely linked with each other. It commences by giving readers a glimpse into the vastness of the sea borne trade and the importance of oceans to the power & wealth of nations and ends with challenges including that of climate change and demonstrating the importance of oceans vis-a-vis the climate discussion. 

The oceans are not just an empty bottomless abyss but a thriving ecosystem where control of strategic locations is as vital and in many cases more vital than strategic locations on land. Since 1492 and 1498 when Columbus discovered the New World and Vasco de Gamma discovered the sea route via the Cape of Good Hope to India; the world changed and the control of oceans became paramount for wealth and power [my views]. 

The rise of sea or maritime power has been on a continuos ascendency. The book shares insights into how this phenomenon evolved, first with the Portuguese who were closely followed by the Spanish and then by the Dutch, French and finally the British. By the turn of the 20th century, the British had become the pre-dominant power in the world on the back of the Royal Navy which operated a blue water navy across the entire world. After WW2, the Americans would follow suit in the tradition of the Royal Navy and develop the finest Navy the world has ever seen. 

The book shares important but critical insights especially into the workings of the United States which is the preeminent power in the world. Unlike the common perception of national borders being the first line of defence of a country, national borders are infact the last line of defence for the United States. Lets introduce here Alfred Thayer Mahan - the brilliant naval strategist of the US and author of a pivotal book "Influence of Sea Power Upon History" written in the late 1800s which has shaped much of the doctrine of the United States' navy and a book that offers a deep insight into the workings of a blue water navy.  

Mahan's critical concept being the wealth and prosperity of a nation is linked to (a) a strong and powerful merchant fleet to carry goods & merchandise across the world (b) an unmatched navy to protect the merchant fleet and keep the sea lanes open for trade and commerce (c) forward projection of power, far away from the country's national borders, via a series of mutually reinforcing forward bases. For the best example of the last point, the reader is advised to open a map of the Pacific ocean and plot the US bases from San Diego all the way to South Korea and the concept becomes all too apparent. 

Containerisation & Twenty Foot Equivalent Units (TEU). The development of the container shipping phenomenon and the growth of sea borne trade has been in lock step. Since the commencement of the container industry in the 1960s this industry has grown by leaps and bounds and has transformed the way we consume goods. The graph below (World Bank) shows the incredible rise of container shipping as measured in TEU units over the past few decades coinciding with the rise of China and the Western Pacific.

Growth in world containerisation measured in TEU 

East Asian economies now dominate the sea borne trade with massive manufacturing hubs dotting the Western Pacific. The largest ports used to American ports and some western European ports in 1960s. Now all the largest ports in the world unsurprisingly are in East Asia with Shanghai ranked 1 and Singapore following close behind demonstrating how the axis has shifted to the Pacific.  https://www.worldshipping.org/top-50-ports 

Shanghai and the other Chinese ports are truly breathtaking in size and complexity. The author talks about his visit to Yangshan Port in Shanghai and shares valuable insights into the development of this super critical world trade port. I was fortunate to have visited Port Waigaoqiao in Shanghai in 2010 and below are some pictures from that visit which I have taken the liberty to share. 

Copper Cathodes Stored in Shanghai Port Free Trade Zone

Chinese port workers weighing the copper

Thats me in front of a large pile of Copper in the port

China, Singapore and South Korea now have the most integrated shipping networks in the world and their companies dominate sea borne commerce and trade. The Chapters - To Contain the World share deep insights including the rise of some iconic shipping companies like Maersk and OOCL which played a critical role in the development of container shipping industry which in turn changed the world we live in. As the industry has grown and developed, so have the ships that carry this massive volume of trade. The early container ships in the 60s had a capacity ranging between 1,000 - 3,000 TEUs. Today the largest container ship has a size of c. 24,000 TEU, not surprisingly owned by the Taiwanese shipping line Evergreen. 

The Flag Follows the Trade - The US navy, as mentioned above, enjoys unmatched supremacy and controls the world's seas and oceans. Through a combination of large military budgets, cutting edge technologies, mutually reinforcing forward bases and a world wide alliance with other leading nations of the world, the US has secured a pivotal role in controlling the seas and ensuring freedom of navigation and the free flow of trade. 

Enter China!! Since the early 2000s, on the back of incredible economic growth, China has come a new power to challenge the presence of the US. China has embarked on a spree to upgrade and modernise its armed forces and notably its navy. Export of finished goods is critical to China as is the import of raw materials and energy and this is a key vulnerability for the country as all this takes place via sea lanes. China recognised that in a clash with the US it would suffer immeasurably as the US navy controls the water all around China. The US could literally 'choke' China if matters came to a head. 

This prompted China to upgrade its naval capabilities and it started to gain knowledge and confidence first with anti piracy operations far from its own territorial waters. Since then, the rise of the PLAN has put the world in general and the US in particular on notice. This section of the book will chronicle key strategies adopted by the Chinese and US in the control of the sea lanes around China and the Western Pacific. Bruce has shared some very interesting insights and perspectives which make for fascinating reading.   

The Power of the Seas - We maybe lulled into believing that as we continue to make progress it will be the world of high tech that will dominate societies and will be more critical than the transshipment of goods on the high seas. Even if we did subscribe to this notion (which is rather flawed) we cannot forget that more than 90% of the data in the world in carried via undersea cables! The seas and oceans are now even more vital in the data driven, cyber economy and hence protecting this vital infrastructure is paramount. 

The seas and oceans are also an incredible source of sustenance as well. A large percentage of the world's population relies on fish and sea food as a critical source for its dietary needs. Then there are the mineral riches from the seas from oil to natural gas production. All this makes for even heightened control & competition for the seas and oceans. [for more deeper insights into the development of the offshore oil industry my suggestion would be to read the book The Prize by Daniel Yergin]. 

One also cannot ignore the role of water, seas and oceans when it comes to our climate. Through sustained research initially carried out by the UK and US but now by most leading nations of the world, we have come to understand the importance of the oceans in the area of climate. Oceans, currents, temperature differences, ice caps, the inter play between oceans and winds all play a vital role in our evolving climate systems. Further, the incredible ability of the oceans to absorb heat has led to further research around oceans, climate change and global warming. 

"Once oceans were the boundary of our existence; now they are the front lines of the new rivalries that will shape the twenty - first century". This sentence aptly summarises the essence of this excellent book. Will the oceans and the Pacific in particular become a hostile and hotly contested fault line or will seas and oceans continue to further trade, innovation and connections is a question for all of us to debate. Finally, we know so little about the oceans despite they being front and center of our existence. Hence, is it time for the major powers to bury their differences and instead work on transnational issues and better understand and respect the seas and oceans around us? To get some of these answers and better shape your opinions, do buy and read this book!

https://www.amazon.com/Rule-Waves-Control-Determines-Superpowers/dp/1982127252