Holcim Ltd
Sector: cement
Estimated missed savings vs. renewable-transition baseline · 2022–2026
Holcim Ltd could have saved $0.75B.
Here's the receipt.
We modelled what Holcim would have saved if it had completed its alternative fuel kiln transformation across all plants before the 2022 and 2026 crises. Holcim's own data proves the case: plants with 80%+ alternative fuel rates were insulated from the fossil fuel price spikes. The $750M net figure reflects what extending that transformation portfolio-wide would have saved -- avoiding $700M in 2022 fossil fuel costs at laggard plants, $350M in 2026 Hormuz petcoke exposure, and $250M in curtailment losses. Holcim scores lower than CEMEX because its partial transformation already worked as a crisis hedge. Revenue converted at CHF 1 = USD 1.10.
View line-by-line breakdown (5 items)
Line items
Completing the alternative fuel kiln transition across all plants would have avoided the 2022 fossil fuel cost blow-out at laggard sites
Saving$0.7BAssumptions:- Fossil-dependent kiln fuel cost increase in 2022
- 700 USD million incremental
Scope: Line items 1
Holcim's fossil-dependent plants faced petcoke/coal price doubling in 2022. Lower impact than CEMEX due to higher alternative fuel substitution rate, but still ~$700M incremental costs at plants that hadn't fully transitioned.
- Alternative fuel plants insulated from crisis
- 30 percent of kilns at high alternative fuel rates
Scope: Line items 1
Holcim has industry-leading alternative fuel substitution rates, with some plants exceeding 80%. These plants experienced minimal fuel cost increases during the 2022 crisis, demonstrating that the fuel switch is also a crisis hedge.
Medium — Holcim's plants with high alternative fuel rates (some exceeding 80%) were insulated from fossil fuel price spikes in 2022. The $700M represents costs at plants still dependent on petcoke/coal that would have been avoided with full alternative fuel substitution.Full biomass/waste fuel substitution would have shielded remaining kilns from the 2026 Hormuz petcoke cost resurgence
Saving$0.35BAssumptions:- Hormuz 2026 petcoke cost increase at fossil kilns
- 81 percent crude price increase ($65 to $118/bbl)
Scope: Line items 2
Petcoke tracks crude at ~0.6-0.7x thermal equivalent. Remaining fossil-dependent kilns face proportional cost increase from Hormuz disruption.
Low — Despite leading the sector in alternative fuel substitution, Holcim's remaining fossil-dependent kilns face petcoke cost increases tracking the Brent $65 to $118/bbl surge.Alternative-fuel kilns kept running during 2022 -- extending that to all European plants would have prevented curtailment losses
Saving$0.25BAssumptions:- European clinker curtailment losses in 2022
- 250 USD million
Scope: Line items 3
Some European Holcim plants curtailed clinker output when energy + EU ETS costs exceeded product margins. Plants with high alternative fuel rates continued operating, proving the fuel switch as crisis insurance.
Medium — Some European Holcim plants curtailed clinker output in H2 2022 when combined EU ETS + energy costs exceeded margins. Plants with high alternative fuel rates continued operating.CCUS and green cement R&D capex (NextGen 2030 programme)
Cost$0.4BAssumptions:- CCUS and green cement R&D capex
- 400 USD million/yr
Scope: Line items 4
Estimated green capex portion of Holcim's CHF 4B total growth capex in 2024, based on NextGen 2030 strategy emphasis on decarbonisation.
Medium — Holcim invested CHF 4B in growth capex in 2024. Green capex portion estimated from NextGen 2030 strategy disclosures.Alternative fuel infrastructure expansion capex
Cost$0.15BSources:Assumptions:- Alternative fuel infrastructure expansion capex
- 150 USD million/yr
Scope: Line items 5
Annual investment in waste pre-processing, biomass sourcing, and kiln feed modifications to increase alternative fuel substitution rates across Holcim's global plant portfolio.
Medium — Annual investment in waste pre-processing, biomass supply chains, and kiln modifications to increase alternative fuel rates across the portfolio.
$0.75B
MediumExposed
Foolishness score: 45
Show derivation
- Kiln fuel cost exposure during 2022 crisis (lower than CEMEX due to higher alt-fuel rate)Value: 0.55Weight: 0.25Holcim Full Year 2024 Results
- Plants that switched to alternative fuels saved during the 2022 crisis (partial credit)Value: 0.35Weight: 0.25Holcim 2024 Climate Report
- Hormuz 2026: remaining fossil-dependent kilns still exposed to petcoke price surgeValue: 0.5Weight: 0.2World Energy Outlook 2024
- ECOPact/ECOPlanet adoption and Scope 2 reduction (offset)Value: 0.25Weight: 0.2Holcim Full Year 2024 Results
- North America portfolio reshaping (offset)Value: 0.3Weight: 0.1Holcim Full Year 2024 Results
Formula: Weighted sum of 2022 kiln fuel crisis exposure, alternative fuel crisis resilience credit, Hormuz 2026 petcoke resurgence on remaining fossil kilns, offset by ECOPact adoption and portfolio reshaping. Holcim's higher alternative fuel substitution rate meant its most advanced plants rode out the 2022 crisis better than peers, but the majority of its 75 Mt emissions come from kilns still burning fossil fuels.
Weights version: v1.0
Deep dive: assumptions, methodology & revision history
Assumptions
- Fossil-dependent kiln fuel cost increase in 2022
- 700 USD million incremental
Scope: Line items 1
Holcim's fossil-dependent plants faced petcoke/coal price doubling in 2022. Lower impact than CEMEX due to higher alternative fuel substitution rate, but still ~$700M incremental costs at plants that hadn't fully transitioned.
- Alternative fuel plants insulated from crisis
- 30 percent of kilns at high alternative fuel rates
Scope: Line items 1
Holcim has industry-leading alternative fuel substitution rates, with some plants exceeding 80%. These plants experienced minimal fuel cost increases during the 2022 crisis, demonstrating that the fuel switch is also a crisis hedge.
- Hormuz 2026 petcoke cost increase at fossil kilns
- 81 percent crude price increase ($65 to $118/bbl)
Scope: Line items 2
Petcoke tracks crude at ~0.6-0.7x thermal equivalent. Remaining fossil-dependent kilns face proportional cost increase from Hormuz disruption.
- European clinker curtailment losses in 2022
- 250 USD million
Scope: Line items 3
Some European Holcim plants curtailed clinker output when energy + EU ETS costs exceeded product margins. Plants with high alternative fuel rates continued operating, proving the fuel switch as crisis insurance.
- CCUS and green cement R&D capex
- 400 USD million/yr
Scope: Line items 4
Estimated green capex portion of Holcim's CHF 4B total growth capex in 2024, based on NextGen 2030 strategy emphasis on decarbonisation.
- Alternative fuel infrastructure expansion capex
- 150 USD million/yr
Scope: Line items 5
Annual investment in waste pre-processing, biomass sourcing, and kiln feed modifications to increase alternative fuel substitution rates across Holcim's global plant portfolio.
Annual revenue
$29.2B
Holcim Full Year 2024 ResultsMethodology
We modelled what Holcim would have saved if it had completed its alternative fuel kiln transformation across all plants before the 2022 and 2026 crises. Holcim's own data proves the case: plants with 80%+ alternative fuel rates were insulated from the fossil fuel price spikes. The $750M net figure reflects what extending that transformation portfolio-wide would have saved -- avoiding $700M in 2022 fossil fuel costs at laggard plants, $350M in 2026 Hormuz petcoke exposure, and $250M in curtailment losses. Holcim scores lower than CEMEX because its partial transformation already worked as a crisis hedge. Revenue converted at CHF 1 = USD 1.10.
Revision history
1av Full research-backed rewrite with sourced emissions data from Holcim 2024 Climate Report, ECOPact/ECOPlanet adoption metrics, NextGen 2030 strategy context, and EU ETS shadow pricing.
2av Crisis-focused rewrite: reframed line items around 2022 kiln fuel crisis (alt-fuel plants insulated vs fossil kilns hammered), Hormuz 2026 petcoke resurgence, and curtailment losses. Score increased from 42 to 45.
- foolishness_score4245
- net_missed_savings.amount1100000000750000000