Economy & Market
Consolidation in cement industry: Gobbling Up!
Published
13 years agoon
By
admin
The cement industry has been going through consolidation phase with large Indian cement players preying on smaller ones and foreign cement majors acquiring controlling stake in Indian majors. Prakash Patil looks at the M&A scenario and what it holds for the future of cement industry in India.It’s mergers and acquisitions season in the Indian cement industry and the latest big ticket deal is the acquisition of 51 per cent controlling stake by Irish cement major CRH in the two 2.4 MTPA plants of the Jaypee Group in Gujarat. A buoyant trend in prices could reportedly fetch the Jaypee Group at least $160 per tonne as replacement value, as it puts on the block its hived-off plants in western (2 units of 2.4 MT each) and southern India (1 unit of 5 MTPA). The deal for the two 2.4 MTPA plants is reportedly valued at Rs 4,200 crore. However, as Jaypee Group has its third plant with a capacity of 5 MTPA in Andhra Pradesh and the three plants would be valued at about Rs 9,000 crore. For CRH, this will be the second acquisition in India. The company had forayed into India in 2008 with the acquisition of 50 per cent stake in Hyderabad-based cement producer My Home Industries, which had an installed capacity of 4.2 MTPA.The latest CRH-Jaypee Group deal is an indication of the churning the Indian cement industry is going through over the last decade or so. The big fishes are on the prowl to gobble up smaller fries in the business and considering that there are 139 large cement plants and 365 mini cement plants in the country currently with 40 major and mid-size players having pan-India presence, the opportunities for acquisitions for the large cement players are enticing. And, it’s not just the small fries that are on the radar of the big players, even some of the biggest cement companies have been taken over in the past and many more are being wooed. After all, the cement business of Jaypee Group being acquired by CRH makes Jaypee Group the third largest cement player in India after UltraTech and Ambuja Cements.The big ticket dealsApart from the latest big ticket deal between the CRH-Jaypee Group, there have been quite a few large takeovers since 1999. When Gujarat Ambuja Cements (GACL) picked up 7.2 per cent stake in India’s then largest cement manufacturer ACC at a price of Rs 370 per share when the market price hovered around Rs 240 per share from the Tatas in December 1999, it created sensation. Later in 2000, GACL acquired the balance 7.2 per cent from the Tatas to become the largest shareholder in ACC. But the twist to this tale came when Swiss cement major Holcim picked up 14.8 per cent stake in Gujarat Ambuja Cements (later to merge with Ambuja Cements Eastern to become Ambuja Cements) for Rs 2,100 crore through the creeping acquisition route and later picked up another 20 per cent stake for Rs 2,400 crore. Subsequently, Holcim hiked its stake in Ambuja Cements to over 50 per cent, thereby acquiring complete management control over Ambuja Cements. The Holcim transaction and valuation provides an excellent indication of the extent to which investors and strategic players are ready to buy the India growth story. In 2005, Holcim acquired stake in ACC at an enterprise value (EV) of $111 per tonne and the next year Holcim acquired stake in Ambuja Cement at an EV of $193 per tonne. In 2007, Holcim again increased its stake in Ambuja Cements at an EV of $301 per tonne!With this acquisition, Holcim also acquired management control over ACC as Ambuja Cements had hiked its stake in ACC to more than 50 per cent. So, Holcim upped the ante for other global cement companies by acquiring majority stake and management control over two of India’s largest cement companies.Lafarge, the French cement major, got late into action in the M&A space and decided to take the acquisition route to fast track it cement business in India. The company declared in 2010 that it was open to consolidation in India and, according to Bruno Lafont, Chairman & CEO, Lafarge, the timeframe for acquisitions was the next five years. "We see consolidation happening (in the cement industry) in India in the mid term period. We are confident of our ability to deliver our investments in India and are open to seizing new opportunities, be it consolidation or greenfield projects," said Lafont while inaugurating the clinker line at Lafarge India’s cement plant in January 2010 at Sonadih in Chhattisgarh. The company entered the Indian market in 1999 with the acquisition of Tata Steel’s cement plant. This was followed by the purchase of the Raymond Cement facility in 2001 and the acquisition of L&T’s concrete business in 2008.The takeover of L&T’s cement business by Grasim Industries in June 2003 also created buzz in the market since this takeover catapulted Grasim Industries (later its cement division being merged into UltraTech Cement) from the third position to the numero uno position in India. After the takeover, UltraTech’s installed capacity went up from 13 MTPA to 31 MTPA. Grasim Industries had to shell out Rs 2,200 crore over a period of three years for a majority stake in Ultratech Cement. Today, UltraTech maintains its leadership position with an installed capacity of 52 MTPA, with Holcim at the no. 2 position with combined capacity of 45 MTPA through ACC and Ambuja Cement.These are just a few samples of big ticket deals that have happened in the cement sector in India since late nineties. There have been many more big and small takeovers and mergers by domestic players since mid-1990s and by foreign players since late-1990s (see box). According to the data published by the Department of Industrial Policy and Promotion, the cement sector attracted foreign direct investments (FDI) worth US$ 2.62 bn between April 2000 to May 2012, which is an ample indication of the fact that the cement sector has been attracting foreign investors in droves.The key M&A triggersClearly, the cement biggies have gone on a shopping spree since during the last decade or so. And not without reason. There are compelling reasons why domestic and foreign cement majors appear to be so bullish on India. "Major reasons for consolidation were excess capacity and entry of foreign players who wanted a pie of untapped Indian market…Apart from above two reasons, another factor that is leading to consolidation is the rising cost of greenfield capacity which also tends to have longer gestation period. Existing players are eyeing companies who are unable to meet rising cost of raw materials due to increasing imported coal prices. On the other hand, the top players who want to spread their reach are tapping such companies as it saves on time factor of greenfield capacities," says Alok Sanghi, Director, Sanghi Industries.
Commenting on the reasons for consolidation, Jailesh Dalal, Director, JAYCEE Buildcon (India), says "The Indian cement industry is fragmented and large domestic and international players would try to consolidate their position going forward for geographical diversification, concentrated focus on operational efficiency, challenges in acquiring land/limestone resources, exit of smaller players and divesture of cement businesses by diversified groups."Now, let’s look at each of these reasons why Indian cement industry is passing through the consolidation phase.Overcapacity
During 2007-12, cement producers added capacity to the tune of 150 MTPA, thereby almost doubling the total installed capacity to 303 MTPA in FY2012-13. According to a report by research firm RNCOS, "It is anticipated that the cement industry players will continue to increase their annual cement output in coming years and the country’s cement production will grow at a compound annual growth rate (CAGR) of around 12 per cent during 2011-12 to 2013-14." According to projections, by 2017 the total capacity nationally would add up to 470 MTPA.The increase in capacities by many of the Indian companies was in anticipation of demand from the infrastructure sector which failed to materialise. In a situation where demand fails to keep pace with supply, the capacity utilization rate is bound to decelerate. The capacity utilisation rate for the cement industry in India has dropped from 93 per cent in FY2006-07 to 75 per cent in FY2011-12. The fall-out of such overcapacity situation is that the cement prices are likely to come under downward pressure which would make survival difficult for smaller cement companies with capacities less than 1 MTPA and therefore vulnerable for takeover. However, the fact that cement majors have built up capacities in advance is an indication that these companies expect demand for cement to remain firm due to construction activity, which is expected to gather momentum due to government’s policy to boost investments in infrastructure.Infrastructure PotentialIndia’s high housing and infrastructure deficits points to the huge potential for development of housing and infrastructure. The cement sector will benefit hugely as and when the momentum in housing and infra development picks up. This potential for development has been attracting major players in hordes from across the world. The demand for cement, being a derived demand, primarily depends on the industrial construction, real estate business, construction activities and investments in the infrastructure sector.Currently, the housing sector consumes 55-60 per cent of cement produced in India and this is expected to change in the next few years when the emphasis will shift on infrastructure development such as roads, bridges, airports, and railways, which will consume a significant percentage of cement produced in the country. The consumption of cement in agriculture is negligible today; but with a greater thrust on agriculture and the suggested ‘second green revolution’, this sector too will extensively use cement to build warehouses and other logistics.But instead of opting to set up cement plants themselves, it makes sense for the foreign players to take the acquisition route not just to make foray into India but also ramp up capacity quickly. The high potential for growth in demand for cement is amply evident from the fact that the per capita cement consumption in India was 230 kg in 2010, which is almost half of the global average of around 450 kg and way below the Chinese average per capita consumption of 1220 kg. Hence, domestic and foreign cement companies remain bullish on the prospects of cement industry in India.High capital cost & long gestation periodA cement plant is typically a capital intensive business and to establish a greenfield project takes about three years. The cost of setting up a greenfield capacity has reportedly shot up from $120 per tonne to $160 per tonne in just two years. Besides, the cement business has a long gestation period and, depending on the market situation, the break-even point may extend to three-four years at an operating level of 70-75 per cent. The high capital cost and long gestation period makes establishing a new cement plant an unattractive business proposition. Hence, established and large players may prefer to poach on the existing and established players to beat the competition and increase their market share. "The cement sector is slowly heading for a major consolidation as greenfield projects are becoming difficult to set up due to increased hassles in areas like mineral concession, land acquisition and related environmental and operational issues. This may lead the cement industry in India to be consolidated in the hands of a few major giant cement companies and only a few cement companies with single or smaller capacity plants shall continue to operate purely due to regional and local factors," says P K Ghosh, Chairman, Ercom Engineers.Entry barriers & cumbersome proceduresDifficulty in accessing limestone reserves, which is a key input in cement production, acts as a significant entry barrier for new entrants. To overcome this difficulty, takeover of companies with access to limestone reserves is the easiest route to crossing the entry barrier. No wonder, none of the foreign cement majors tried to set up a greenfield cement plant as prospecting for limestone reserves is a time-consuming process. Even if the limestone reserves are established, getting the mining rights, railway siding, etc. can reportedly take upto 7-8 years, with only 25 per cent chance of striking enough limestone reserves to last for the entire economic life-span of the plant. Hence, acquisition is bound to pick up further momentum as more cement majors enter the Indian market.The benefits of consolidationThe consolidation in the cement industry would prove to be beneficial both for the acquiring companies as well as for the cement industry. Some of the benefits that would ensue from consolidation are as follows:
Economies of scaleA large cement company enjoys the benefits of economies of scale. Mergers and acquisitions bring about consolidation of capacities which adds up the benefits of scale. The economies of scale enable the company to reduce the production costs so that it can reduce the cement price to maintain an edge over the competitors.Extended reach and increased revenuesWhen a company takes over the production and distribution facilities of another company, it immediately extends its geographical reach and increases its market share on account of expansion of the market for its product. The market expansion helps in ramping up the revenues of the company within a short span of time. The enhanced geographical reach may also result in substantial reduction in transportation costs which are quite high as cement is a bulk commodity.Technological upgradationThe new energy-efficient but capital-intensive "dry" production technology offers to the companies efficiencies that provide vital edge over the companies not deploying such technologies. Small manufacturers may not possess the requisite financial resources or production volumes to be able to afford the most efficient technology, which puts them at a competitive cost disadvantage. The entry of foreign players has led to technological upgradation and innovation in Indian cement industry. "Despite the fact that the technology used by Indian cement companies is among the best in the world, more innovation is required to ensure that cement plans are not only environment-friendly, but also low-cost in nature. M&As in last decade has helped Indian firms propel to global standards. Foreign firms who took over Indian firms have made most of the investments in India in the last decade for upgrading technology and raising capacity. With higher spend on technology, existing players are likely to focus more on ready mix concrete, bulk sales and blended cement to ensure improvement in quality as well as environment consciousness with sustainable construction," says Sanghi.The Road AheadGoing forward, the acquisitions space is going to get hotter, with lot of small and mid-sized cement companies up for grabs. Once the economies of scale kick in on account of consolidation, the cement prices are likely to remain competitive yet remunerative. This would benefit both the cement companies as well as cement consumers. Summarising the benefits of consolidation, Dalal says, "M&As would largely have a positive impact in the cement industry in India on account of value creation, economies of scale and cost efficiencies, operational and supply chain efficiencies, higher competitiveness, technology transfer, better research and development and high quality products, financial leveraging and optimization of profitability and increased focus on health, safety and environment. In the future as well, M&As would augur well for the industry as it would bring world-class technology, products and operational efficiencies into India." Sanghi too feels that M&As would be beneficial and says, "M&As in cement industry is likely to bring pricing power, improve profitability and reduce cost of branding for top players. Through M&As, top players would have higher vertical integration and locational advantage with respect to sourcing raw materials and market reach."Of course, there is always the possibility of major companies forming a cartel to keep the cement prices artificially high, but with the Competition Commission of India keeping a vigil over the production figures, capacity utilization and cement prices, the cement companies would be wary of indulging in such malpractices. Sanghi too dismisses fear of cartelization saying, "If there was (cartelisation) as is claimed, cement companies would not have reported losses in any quarter. Also, prices would have been same across the year, if there was cartelization. But every year, cement prices fall during monsoon because there is a slowdown in demand; while prices rise on and around Diwali due to surge in demand from real estate."To sum up, consolidation is good for the cement industry and there are sunny days ahead for the industry in times to come.
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Walplast Expands HomeSure MasterTouch Line
It is a high-quality yet affordable wall paint
Published
4 weeks agoon
February 13, 2025By
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Walplast Products, a leading manufacturer of building and construction materials, has unveiled the expansion of its esteemed HomeSure MasterTouch portfolio with the launch of the new HomeSure MasterTouch Lush (Interior & Exterior Emulsion) and HomeSure MasterTouch Prime (Interior & Exterior Primer). These new offerings are strategically positioned as high-quality, yet affordable, high-performance solutions designed to enable individuals to achieve their dream of beautiful homes and “Elevating Lifestyles” (Raho Shaan Se).
The HomeSure MasterTouch Lush Interior Emulsion is a high-quality yet affordable wall paint that delivers best-in-class coverage and an aesthetically appealing, durable finish. Formulated with premium pigments and acrylic binders, it ensures excellent coverage, colour retention, and resistance to fungus, making it an ideal choice for homeowners seeking durability and value. Meanwhile, the HomeSure MasterTouch Lush Exterior Emulsion is specifically engineered to withstand varying weather conditions, particularly in regions with frequent rain and moderate humidity. With strong adhesion and UV-resistant properties, it protects exterior walls against algae growth and black spots while maintaining an elegant matte appearance.
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“At Walplast, we are committed to providing innovative and accessible solutions that enhance the beauty and longevity of homes. The HomeSure MasterTouch range is designed with the modern homeowner in mind—delivering affordability without compromising on quality. Our focus is to empower individuals to bring their dream homes to life with reliable and superior products,” said Kaushal Mehta, Managing Director of Walplast.
Aniruddha Sinha, Senior Vice President Marketing, CSR, and Business Head – P2P Division, Walplast added, “The HomeSure MasterTouch Lush and Prime range align with our vision of offering peace of mind to customers with durable, aesthetic, and affordable solutions for every home. The “Elevate your lifestyle” reflects our belief that everyone deserves to live in a home they take pride in. With this launch, we continue our mission of enabling dreams of beautiful homes for all.”
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Carbon Capture, Utilisation, and Storage (CCUS) is crucial for reducing emissions in the cement industry. Kanika Mathur explores how despite the challenges such as high costs and infrastructure limitations, CCUS offers a promising pathway to achieve net-zero emissions and supports the industry’s sustainability goals.
The cement industry is one of the largest contributors to global CO2 emissions, accounting for approximately seven to eight per cent of total anthropogenic carbon dioxide released into the atmosphere. As the world moves towards stringent decarbonisation goals, the cement sector faces mounting pressure to adopt sustainable solutions that minimise its carbon footprint. Among the various strategies being explored, Carbon Capture, Utilisation, and Storage (CCUS) has emerged as one of the most promising approaches to mitigating emissions while maintaining production efficiency. This article delves into the challenges, opportunities, and strategic considerations surrounding CCUS
in the cement industry and its role in achieving net-zero emissions.
Understanding CCUS and Its Relevance to Cement Manufacturing
Carbon Capture, Utilisation, and Storage (CCUS) is an advanced technological process designed to capture carbon dioxide emissions from industrial sources before they are released into the atmosphere. The captured CO2 can then be either utilised in various applications or permanently stored underground to prevent its contribution to climate change.
Rajesh Kumar Nayma, Associate General Manager – Environment and Sustainability, Wonder Cement says, “CCUS is indispensable for achieving Net Zero emissions in the cement industry. Even with 100 per cent electrification of kilns and renewable energy utilisation, CO2 emissions from limestone calcination—a key raw material—remain unavoidable. The cement industry is a major contributor to
GHG emissions, making CCUS critical for sustainability. Integrating CCUS into plant operations ensures significant reductions in carbon emissions, supporting the industry’s Net Zero goals. This transformative technology will also play a vital role in combating climate change and aligning with global sustainability standards.”
The relevance of CCUS in cement manufacturing stems from the inherent emissions produced during the calcination of limestone, a process that accounts for nearly 60 per cent of total CO2 emissions in cement plants. Unlike other industries where CO2 emissions result primarily from fuel combustion, cement production generates a significant portion of its emissions as an unavoidable byproduct. This makes CCUS a particularly attractive solution for the sector, as it offers a pathway to drastically cut emissions without requiring a complete overhaul of existing production processes.
According to a Niti Ayog report from 2022, the adverse climatic effects of a rise in GHG emissions and global temperatures rises are well established and proven, and India too has not been spared from adverse climatic events. As a signatory of the Paris Agreement 2015, India has committed to reducing emissions by 50 per cent by the year 2050 and reaching net zero by 2070. Given the sectoral composition and sources of CO2 emissions in India, CCUS will have an important and integral role to play in ensuring India meets its stated climate goals, through the deep decarbonisation of energy and CO2 emission intensive industries such as thermal power generation, steel, cement, oil & gas refining, and petrochemicals. CCUS can enable the production of clean products while utilising our rich endowments of coal, reducing imports and thus leading to an Indian economy. CCUS also has an important role to play in enabling sunrise sectors such as coal gasification and the nascent hydrogen economy in India.
The report also states that India’s current cement production capacity is about 550 mtpa, implying capacity utilisation of about 50 per cent only. While India accounts for 8 per cent of global cement capacity, India’s per capita cement consumption is only 235 kg, and significantly low compared to the world average of 500 kg per capita, and China’s per capita consumption of around 1700 kg per capita. It is expected that domestic demand, capacity utilisation and per capita cement consumption will increase in the next decade, driven by robust demand from rapid industrialisation and urbanisation, as well as the Central Government’s continued focus on highway expansions, investment in smart cities, Pradhan Mantri Awas Yojana (PMAY), as well as several state-level schemes.
Key Challenges in Integrating CCUS in Cement Plants Spatial Constraints and Infrastructure Limitations
One of the biggest challenges in integrating CCUS into existing cement manufacturing facilities is space availability. Most cement plants were designed decades ago without any consideration for carbon capture systems, making retrofitting a complex and costly endeavour. Many facilities are already operating at full capacity with limited available space, and incorporating additional carbon capture equipment requires significant modifications.
“The biggest challenge we come across repeatedly is that most cement manufacturing facilities were built decades ago without any consideration for carbon capture systems. Consequently, one of the primary hurdles is the spatial constraints at these sites. Cement plants often have limited space, and retrofitting them to integrate carbon capture systems can be very challenging. Beyond spatial issues, there are additional considerations such as access and infrastructure modifications, which further complicate the integration process. Spatial constraints, however, remain at the forefront of the challenges we encounter” says Nathan Ashcroft, Carbon Director, Stantec.
High Capital and Operational Costs CCUS technologies are still in the early stages of large-scale deployment, and the costs associated with implementation remain a significant barrier. Capturing, transporting, and storing CO2 requires substantial capital investment and increases operational expenses. Many cement manufacturers, especially in developing economies, struggle to justify these costs without clear financial incentives or government support.
Regulatory and Policy Hurdles The regulatory landscape for CCUS varies from region to region, and in many cases, clear guidelines and incentives for deployment are lacking. Establishing a robust framework for CO2 storage and transport infrastructure is crucial for widespread CCUS adoption, but many countries are still in the process of developing these policies.
Waste Heat Recovery and Energy Optimisation in CCUS Implementation
CCUS technologies require significant energy inputs, primarily for CO2 capture and compression. One way to offset these energy demands is through the integration of waste heat recovery (WHR) systems. Cement plants operate at high temperatures, and excess heat can be captured and converted into usable energy, thereby reducing the additional power required for CCUS. By effectively utilizing waste heat, cement manufacturers can lower the overall cost of carbon capture and improve the economic feasibility of CCUS projects.
Another critical factor in optimising CCUS efficiency is pre-treatment of flue gases. Before CO2 can be captured, flue gas streams must be purified and cleaned to remove particulates and impurities. This additional processing can lead to better capture efficiency and lower operational costs, ensuring that cement plants can maximise the benefits of CCUS.
Opportunities for Utilising Captured CO2 in the Cement Sector
While storage remains the most common method of handling captured CO2, the utilising aspect presents an exciting opportunity for the cement industry. Some of the most promising applications include:
Carbonation in Concrete Production
CO2 can be injected into fresh concrete during mixing, where it reacts with calcium compounds to form solid carbonates. This process not only locks away CO2 permanently but also enhances the compressive strength of concrete, reducing the need for additional cement.
Enhanced Oil Recovery (EOR) and Industrial Applications
Captured CO2 can be used in enhanced oil recovery (EOR), where it is injected into underground oil reservoirs to improve extraction efficiency. Additionally, certain industrial processes, such as urea production and synthetic fuel manufacturing, can use CO2 as a raw material, creating economic opportunities for cement producers.
Developing Industrial Hubs for CO2 Utilisation
By co-locating cement plants with other industrial facilities that require CO2, manufacturers can create synergies that make CCUS more economically viable. Industrial hubs that facilitate CO2 trading and re-use across multiple sectors can help cement producers monetise their captured carbon, improving the financial feasibility of CCUS projects.
Strategic Considerations for Large-Scale CCUS Adoption Early-Stage Planning and Feasibility Assessments
Cement manufacturers looking to integrate CCUS should begin with comprehensive feasibility studies to assess site-specific constraints, potential CO2 storage locations, and infrastructure requirements. A phased implementation strategy, starting with pilot projects before full-scale deployment, can help mitigate risks and optimise
system performance.
Neelam Pandey Pathak, Founder and CEO, Social Bay Consulting and Rozgar Dhaba says, “Carbon Capture, Utilisation and Storage (CCUS) has emerged as a transformative technology that holds the potential to revolutionise cement manufacturing by addressing its carbon footprint while supporting global sustainability goals. CCUS has the potential to be a game-changer for the cement industry, which accounts for about seven to eight per cent of global CO2 emissions. It addresses one of the sector’s most significant challenges—emissions from clinker production. By capturing CO2 at the source and either storing it or repurposing it into value-added products, CCUS not only reduces
the carbon footprint but also creates new economic opportunities.”
Government Incentives and Policy Support
For CCUS to achieve widespread adoption, governments must play a crucial role in providing financial incentives, tax credits, and regulatory frameworks that support carbon capture initiatives. Policies such as carbon pricing, emission reduction credits, and direct subsidies for CCUS infrastructure can make these projects more economically viable for cement manufacturers.
Neeti Mahajan, Consultant, E&Y India says, “With new regulatory requirements coming in, like SEBI’s Business Responsibility and Sustainability Reporting for the top 1000 listed companies, value chain disclosures for the top 250 listed companies, and global frameworks to reduce emissions from the cement industry – this can send stakeholders into a state of uncertainty and unnecessary panic leading to a semi-market disruption. To avoid this, communication on technologies like carbon capture utilisation and storage (CCUS), and other innovative tech technologies which will pave the way for the cement industry, is essential. Annual reports, sustainability reports, the BRSR disclosure, and other broad forms of communication in the public domain, apart from continuous stakeholder engagement internally to a company, can go a long way in redefining a rather traditional industry.”
The Role of Global Collaborations in Scaling CCUS
International collaborations will be essential in driving CCUS adoption at scale. Countries that have made significant progress in CCUS, such as Canada, Norway, and the U.S., offer valuable insights and technological expertise that can benefit emerging markets. Establishing partnerships between governments, industry players, and research institutions can help accelerate technological advancements and facilitate knowledge transfer.
Raj Bagri, CEO, Kapture, says “The cement industry can leverage CCUS to capture process and fuel emissions and by using byproducts to replace existing carbon intensive products like aggregate filler or Portland Cement.”
Organisations like the Carbon Capture Knowledge Centre in Saskatchewan provide training programs and workshops that can assist cement manufacturers in understanding CCUS implementation. Additionally, global symposiums and industry conferences provide platforms for stakeholders to exchange ideas and explore collaborative opportunities.
According to a Statista report from September 2024, Carbon capture and storage (CCS) is seen by many experts as a vital tool in combating climate change. CCS technologies are considered especially important for hard-to-abate industries that cannot be easily replaced by electrification, such as oil and gas, iron and steel, and cement and refining. However, CCS is still very much in its infancy, capturing just 0.1 per cent of global CO2 emissions per year. The industry now faces enormous challenges to reach the one billion metric tons needing to be captured and stored by 2030 and live up to the hype.
The capture capacity of operational CCS facilities worldwide increased from 28 MtCO2 per year in 2014 to around 50 MtCO2 in 2024. Meanwhile, the capacity of CCS facilities under development or in construction has risen to more than 300 MtCO2 per year. As of 2024, the United States had the largest number of CCS projects in the pipeline, by far, with 231 across various stages of development, 17 of which were operational. The recent expansion of CCS has been driven by developments in global policies and regulations – notably the U.S.’ Inflation Reduction Act (IRA) – that have made the technology more attractive to investors. This has seen global investment in CCS more than quadruple since 2020, to roughly $ 11 billion in 2023.
The Future of CCUS in the Cement Industry
As technology advances and costs continue to decline, CCUS is expected to play a crucial role in the cement industry’s decarbonisation efforts. Innovations such as cryogenic carbon capture and direct air capture (DAC) are emerging as promising alternatives to traditional amine-based systems. These advancements could further enhance the feasibility and efficiency of CCUS in cement manufacturing.
In conclusion, while challenges remain, the integration of CCUS in the cement industry is no longer a question of “if” but “when.” With the right mix of technological innovation, strategic planning, and policy support, CCUS can help the cement sector achieve net zero emissions while maintaining its role as a vital component of global infrastructure development.

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