Sustainable Development

Partnership with the W.W.F.

Cement production is responsible for most of Lafarge's greenhouse gas emissions. Manufacturing alone accounts for 98% of the Group's CO2 emissions.

Lafarge is aware of the challenge which climate change presents for the entire planet. In 2001, the Group committed itself to ambitious objectives in the framework of a pioneering partnership with the W.W.F. (World Wide Fund for Nature). By 2010, Lafarge is aiming to reduce:

• absolute gross emissions* by 10% in industrialized countries,
• net emissions* by 20% per ton of cement produced worldwide.

These commitments go beyond the reduction targets set by the Kyoto Protocol, which call for industrialized countries to reduce their emissions by 5.2% compared to 1990 levels.

* Gross/net emissions: net emissions equal gross emissions minus emissions related to the burning of waste.

Resources

To meet these objectives, the Group is:

• reducing energy consumption,
• modernizing its plants and constantly improving its industrial processes to use alternative energy sources,
• using alternative fuels,
• using industrial waste, particularly slag, fly ash and pozzolan, to manufacture cement. For example, certain cement additives can partially replace limestone. Burning less limestone and using more materials that have already been burned reduces CO2 emissions.

This approach has seen the Group's global CO2 emissions per ton of cement fall by 16% between 1990 and the end of 2007.

Lafarge also invests in research to:

• develop clinker which produces less CO2,
• perfect processes which make more efficient use of energy,
• optimize the composition of concrete and improve recycling.

In global terms, the cement industry is responsible for 5% of the CO2 emissions related to human activities.

The construction sector as a whole consumes a large amount of energy. As a responsible player, Lafarge seeks to reduce the environmental impact of construction and promote sustainable construction methods.

The Group addresses all actors in the value chain and participates in partnerships and collective actions, such as:

• the W.B.C.S.D. (World Business Council for Sustainable Development),
• the E.E.B. (Energy Efficiency in Building) project,
• the Building Energy Foundation,
• U.N.E.P. (United Nations Environment Program),
• collaborative projects with renowned architects, such as Jacques Ferrier, the driving force behind the Hypergreen project.

The Group's industrial ecology approach is built around finding ways to add value to waste. The underlying principle is that waste products from certain industries can serve as energy or raw material resources for other industries. In 2007, Lafarge recovered more than 7.7 million tonnes of biomass, waste and by-products.

Promoting alternative energy sources

For 30 years, Lafarge has been developing solutions to reduce energy consumption and diversify supplies. The Group aims to increase its fuel substitution rate from 8.6% to 30% by 2010. This would reduce the amount of waste generated by 7.5 million tons each year and reduce CO2 emissions by 9 million tons.

Examples of alternative fuel sources:

• biomass: rice husks in the Philippines, coffee pods in Uganda, shells from palm oil nuts in Malaysia,
• various waste products: plastics, solvents and old tires in Germany.

Using waste materials as an alternative to fossil energies has benefits for the Group and for local communities:

• Lafarge uses less fossil energy, reduces its fuel bill and reduces its dependence on the market for traditional fuels,
• the Group provides a service to the community by incinerating waste products that would otherwise be difficult and costly to eliminate.

This approach also has positive effects in terms of CO2 emissions. Biomass is neutral in terms of CO2 while placing waste material in landfill produces greenhouse gases.

Developing alternative materials

Clinker, a key ingredient in cement manufacture, can also be partially substituted by waste. By adding industrial residues such as recycled construction materials and products derived from other industries, it is possible to:

• reduce the use of natural, non-renewable raw materials,
• decrease CO2 emissions,
• reduce costs.

Lafarge conducts a number of projects aimed at implementing Clean Development Mechanisms (C.D.M.) within the framework of the Kyoto Protocol. Three projects have already been recognized by the C.D.M. Executive Committee:

• in Morocco, the Tetouan wind farm supplies 50% of the electricity used by the local Lafarge cement plant,
• in Malaysia, 5% of the thermal energy for the Rawang and Kanthan cement plants comes from biomass,
• in India, fly ash from conventional power plants is recycled for use in cement.

These 3 Clean Development Mechanisms provide annual savings of 160,000 tons of CO2, an environmental benefit equivalent to planting 10.6 million trees per year! The Group is studying new C.D.M. projects.