Environment
Proposed ban of petcoke import not for cement
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7 years agoon
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adminThe Environmental Pollution Control Authority (EPCA) is determined to get a ban on petcoke import, although the ban would not apply to the cement industry, according to Sunita Narain, green activist and member of the EPCA. ‘We have recommended a ban on petcoke import into India and we have recommended a ban on the use of petcoke in all industries other than cement,’ Narain said.
The Supreme Court-appointed EPCA has pitched using India’s own domestic petcoke in the cement industry.
‘India generates about 10 to 12 MT (million tonnes) of petcoke from its own refineries that should go into cement plants, and we should not become the dumping ground for petcoke from the US or Saudi Arabia which is a very dirty fuel,’ said Narain, who is director-general of the Centre for Science and Environment.
‘The Ministry says there should be no ban, but there should be standards on furnace oil (FO) and emissions. We said ‘fine’ and gave to the court a list of industries which don’t have standards.’
Construction cos get thumbs up on Modi’s Spending Plan
Prime Minister Narendra Modi’s plan to spend a record $60 billion on infrastructure this fiscal year has started trickling into company earnings, giving analysts a reason to turn optimistic about Indian construction stocks. Larsen & Toubro Ltd., the nation’s largest engineering firm, has rallied 27 percent this year, beating the benchmark gauge which has risen 19 percent. Gayatri Projects Ltd. and KNR Constructions Ltd., which build roads, and Simplex Infrastructures Ltd. have also surged.
The outperformance may continue as the nation’s central bank rate cut of 200 basis points since December 2014 is helping companies better manage leverage, while new orders are expected to pick up pace in second half, brokerages including Macquarie Group Ltd. Said. And now that the June-quarter earnings season has concluded, bullish notes are trickling in.
Macquarie Capital Securities India analysed results of 12 companies from the sector with combined revenues near that of Larsen & Toubro’s engineering and construction division. Their total revenue rose 12 per cent after three quarters of no growth. Goldman Sachs India said first-quarter earnings suggest that there are ‘green shoots’ for cement consumption driven by low-cost housing and infrastructure. Larsen & Toubro, viewed as a bellwether for domestic economy, reported a 16 per cent jump in revenue from its infrastructure segment, the most in five quarters. The growth was driven mainly by the local market, the company said.
What sand mining ban means for cement cos
Sand availability has become an issue in the states of Uttar Pradesh, Madhya Pradesh, Tamil Nadu and Telangana due to the ban on illegal mining in these regions, according to media reports and channel checks by various brokerage firms. Strict NGT (National Green Tribunal) norms and floods in north Bihar are some of the factors driving this issue in these areas, point out analysts.
‘Our interactions with market participants in Bihar suggest that sand availability is extremely low. In UP (Uttar Pradesh), sand availability continues to be challenging. The eastern UP markets, which were reliant on Bihar, will witness further deterioration in the availability of sand,’ said a recent report by HDFC Securities Ltd.
To construct 100 sq ft of built-up area, 33 bags of cement of 50 kg each and 117 cubic ft of sand, among other raw materials are required, according to the JK Lakshmi Cement Ltd website. In simple terms, lower availability of sand would halt or slow construction activities, thus having a cascading impact on cement demand. Shortage in sand availability has led to spike in sand prices. This has led to illegal mining, which in turn has led to a clampdown by the authorities.
‘Our dealer check shows, in the past, administered prices of sand?prior to auctioning method and National Green Tribunal’s intervention?was quite lower. For instance, within 10 km of the loading point, marginal cost of sand was made available at Rs 300-Rs 350/tonne; as distance increases every 5 km, an increment of Rs 50 is added to base-cost. Today, post auctioning, in some clusters, the administered prices have moved up to as high as Rs 1,000-Rs1,300+/tonne; whereas the marginal costing of sand mining is less than Rs 560/tonne. Thereby, this wide gap between administered and marginal price has opened up law enforcement issues. Add NGT’s restrictions and a slowdown in construction cannot be ruled out,’ said Rohit Natarajan, an analyst with IDBI Capital Markets and Securities Ltd. Given their diversification, pan-India companies are likely to be less impacted than regional ones.
Cement makers catering to the central region like Shree Cement, which gets nearly 20 per cent of its dispatches from Bihar, Prism Cement Ltd and Heildeberg Cement or certain clusters in the south like India Cements Ltd and Ramco Cements Ltd, may see an impact on volume offtake, should the issue persist for long, caution analysts.
Cement price hike offsets cost escalation
The cement sector reported in-line results in 1QFY18, as volumes grew 5.6 per cent YoY, primarily on capacity expansion. Growth in weighted average realisations was marginally higher than our estimates at 8 per cent YoY and 7.6 per cent QoQ. EBITDA/t remained flat as realisations growth offset escalations in power/fuel costs (26 per cent YoY) and freight costs (12 per cent YoY). We expect 2QFY18 to be seasonally mute. However, companies expect demand to pick up in 2HFY18 on a rise in infrastructure and housing demand. Profitability in terms of EBITDA/t is likely to be under pressure in 2QFY18 on cost escalations (higher petcoke / coal and diesel prices) and lower operating leverage (reduced utilisations). Dalmia Bharat and JK Lakshmi are our top picks in the sector.
Rs.290 cr for civil airport in Allahabad
The Uttar Pradesh Government has sanctioned and released Rs 290 crore to upgrade the Bamrauli airstrip in Allahabad before the Ardh Kumbh in 2019. To be built adjacent to Bamrauli Airport, the new civil airport will have facility for landing and take-off of all, including Boeing 737 aircraft.
Since, Bamrauli Airport comes under the purview of the Air Force, the need for a civil airport in the Sangam City was long felt, said State Health Minister Allahabad (West) MLA Siddharthnath Singh, adding that though announcement for the airport was made much before Yogi Government came to power, the process has now been expedited. Sangam City’s airport will be at par with those at Lucknow and Gorakhpur, said Singh, adding that funds have reached the district magistrate.
To be ready within a year, the civil airport would be built on an extended land, acquisition of which would begin soon, Singh, who is also the UP government spokesperson, told TOI. State Government’s request to Railways to come up with a rail overbridge (ROB) and flyover connecting Begum Bazar locality with the airport has also been approved, he added. Railways has sanctioned Rs 110 crore for the two projects, said Singh and added that the ROB and the flyover would be a four-lane road till the new civil airport.
The government has already earmarked Rs 500 crore to upgrade facilities before Ardh Kumbh.
Hyderabad to get Rs.10,000-cr transformation
The rapidly expanding metropolis of Hyderabad is in for a major transformation with a number of infra projects set to completed in the next two years, entailing an outlay of over Rs 10,000 crore. For a city ranked high by consultancy firm Mercer for the quality of living, the completion of the mega Hyderabad Metro project next year and the other projects, including the Strategic Road Development Project of Rs 3,000 crore and four major flyovers/skyways to decongest busy junctions and nodal city points, will make a lot of difference.
KT Rama Rao, Telangana Minister for Municipal Administration and Urban Develo?pment, who supervises various infrastructure projects, said the government is working towards completing them over the next 18 to 24 months. ‘Our objective is to transform Hyderabad into a truly global city in 6-7 years and these projects are part of that larger goal,’ he said.
While the first phase of the Rs 14,132-crore, 72-km-long, three-corridor elevated metro rail project is planned to be commissioned during Prime Minister Narendra Modi’s visit in November, providing a major boost to the urban infrastructure, the Strategic Road Development Plan and the four mega flyovers such as the 11-km PVNR Expressway that connects the international airport, will provide a major boost. During a recent interaction with Telangana Builders Forum, the Minister outlined some of the key projects and mentioned these projects would keep the builders busy.
Why cement cos are going in for M&A
It’s a dog-eat-dog scenario in the Indian cement sector as the pace of mergers and acquisitions (M&As) has been robust in the last few years. ‘From FY14 onwards, capacity worth 59 million tonne per annum (MTPA) (13 per cent of FY17 capacity) changed hands in the Indian cement industry,’ said an IIFL Institutional Equities Research report. This includes acquisition of Jaiprakash Associates’ 21 MTPA cement assets by UltraTech Cement, which concluded recently.
Opting for inorganic growth or a brownfield expansion is both time and cost efficient. However, there are a couple of other factors too that have contributed to the ongoing M&A spree in the cement sector. First and foremost, cement demand is yet to see a significant revival. Coupled with an oversupply situation it is making survival difficult for smaller unorganised cement firms. For instance, in the southern region, one may increasingly witness a scenario of big fish eating the little ones. According to analysts, in the States of Andhra Pradesh and Telangana the total available capacity is nearly 85 MTPA and demand is around 20 MTPA. So, even if the demand scenario improves, the situation for small firms doesn’t get any better.
Jaypee plans to raise Rs.2k cr, to sell Bhilai Jaypee Cement
Debt-ridden Jaiprakash Associates said its proposed sale of entire 74 per cent stake in Bhilai Jaypee Cement Ltd for an enterprise value of Rs 1,450 crore is expected to be concluded by year-end and plans to raise up to Rs 2,000 crore through sale of securities.
In a notice to shareholders for AGM to be held on September 23, Jaypee Group’s flagship company Jaiprakash Associates said it has taken various steps to reduce its debt, including sale of cement plants.
To revive its business operations and repay debt, the company has divested a substantial portion of its cement business with a capacity of 17.2 MTPA to Aditya Birla Group firm UltraTech Cement at an enterprise value of Rs 16,189 crore.
‘The transaction stood consummated on June 29, 2017 and that has resulted in reduction of debt of approx Rs 14,000 crore, including repayment of outstanding loans to banks/FIs, part payment to holders of FCCBs, repayment of almost all outstanding fixed deposits and interest thereon and other priority payments,’the company said. Giving update on other proposed transactions, the company said it plans to sell entire 74 per cent stake in Bhilai Jaypee Cement Ltd to Orient Cement Ltd at a total enterprise value of Rs 1,450 crore, which is ‘expected to be consummated by December 31, 2017’.
Bhilai Jaypee Cement owns 1.1 MTPA clinker plant at Satna in MP and 2.2 MTPA cement grinding Unit at Bhilai, Chhattisgarh.
Jaiprakash Associates has also sought shareholders nod for an enabling special resolution to raise up to Rs 2,000 crore through issue of securities via routes like QIP. The amount would be used for capital expenditure, reduction of debts, general corporate purposes and for raising working capital require?ment for real estate business and other businesses.
Jaiparaksh Associates is a diversified infrastructure company and is engaged in segments as engineering, construction and real estate development, manufacture and marketing of cement, hospitality and sports management.
The company informed shareholders that in consultation with lenders it has finalised a Debt Realignment Plan (DRP) wherein a part of the total debt would be retained in the company and the residual debt would be transferred along with land and certain other assets as part of a Real Estate Undertaking to a SPV.
‘The company is focusing on its core area of strength i.e. Engineering and Construction and is bidding for various construction projects. Further, steps are being taken to strengthen its marketing network, strategies for marketing its products in cement & real estate space,’ the notice said. Jaypee group is facing a debt crisis and its group firm Jaypee Infratech has taken over by NCLT appointed IRP for recovery of bad loans.The group is facing huge protest from home buyers because of significant delays in delivery of projects and doubt over its financial health. Meanwhile, lenders of Jaiprakash Power Ventures Ltd have sought bids to sell at least 30 per cent stake in the company to recover some of their dues.
Emami Cement aims profit with Rs.2,000-2,200 cr sales in FY18
The Emami group’s cement arm said it was aiming at retail sales of Rs 2000-2200 crore with some profit in the first full year of operations in FY18. ‘We are looking at 3.2 million tonnes of cement sales in 2017-18 and look forward to some profit also,’ Emami Cement wholetime director & CEO Vivek Chawla said here. Emami Cement chief marketing officer Vinit Kr Tiwari said the net of GST, the company realisation for the year could be around Rs 1500 crore. The Emami Cement is aggressive in garnering marketshare in the six states it has forayed so far. By this fiscal the company will have six million tonnes of cement capacity from four million tonnes. ‘We are manu?facturing cement in Raipur, Chattisgarh (mother plant) and West Bengal. By January 2018, the Odisha plant will be operational,’ Chawla said.
Tiwari said the company will double its sales outlet from 4300 outlets by this fiscal to deepen its reach that will boost the market share to 10 per cent by 2018-19. The intregated cement plant (clinker and grinding unit) at Chattisgarh got operational in December 2016.
While West Bengal and Odhisa are grinding units, all are two million tonne capacity each.
‘We are getting good response in the all the markets we are into like Chattisgarh, Bengal, Jharkhand, Odisha, Bihar (just launched) and partially Maharashtra. In Bengal, Panagarh grinding unit is producing about 40 per cent of its capacity. but will be ramped up with better sales projection and sand crisis getting resolved.
As the cement industry prioritises sustainability and performance, Supplementary Cementitious Materials (SCMs) are redefining standards, explains Tushar Khandhadia, General Manager – Production, Udaipur Cement Works.
What role do supplementary cementitious materials (SCMs) play in enhancing the performance and sustainability of cement and concrete?
SCMs play a crucial role in enhancing the performance and sustainability of cement and concrete. These materials are added to concrete to improve its properties such as strength, durability, and workability, as well as to reduce the environmental impact of cement production. The addition of SCMs to cement reduces the amount of Portland cement required to manufacture concrete, reducing the carbon footprint of the concrete. These materials are often industrial waste products or by-products that can be used as a replacement for cement, such as fly ash, slag and silica fume.
SCMs also reduce the amount of water required to produce concrete, which reduces the environmental impact of concrete production. This is achieved through their ability to improve the workability of concrete, allowing the same amount of work to be done with less water.
In addition, SCMs improve the durability of concrete by reducing the risk of cracking and improving resistance to chemical attack and other forms of degradation.
How has your company integrated SCMs into its production process, and what challenges have you encountered?
The integration of SCMs into cement and concrete production may pose certain challenges in the areas of sourcing, handling and production optimisation.
- Sourcing: Finding an adequate and reliable supply of SCMs can be a challenge. Some SCMs, such as fly ash and slag, are readily available by-products of other industrial processes, while others such as silica fume or metakaolin may be more difficult to source.
- Handling: The storage, handling, and transportation of SCMs require special considerations due to their physical and chemical properties. For instance, some SCMs are stored in moist conditions to prevent them from drying out and becoming airborne, which could pose a safety risk to workers.
- Production optimisation: The addition of SCMs into the mix may require adjustments to the production process to achieve the desired properties of cement and concrete. For example, the use of SCMs may affect the setting time, workability, strength gain, and other properties of the final product, which may require reconfiguration of the production process.
- Quality control: The addition of SCMs may introduce variability in the properties of cement and concrete, and rigorous quality control measures are necessary to ensure the final product meets the required specifications and standards.
Proper planning, handling and production optimisation are essential in overcoming the challenges encountered during the integration process.
Can you share insights on how SCMs such as fly ash, slag and silica fume impact the durability and strength of concrete in different environmental conditions?
- Fly ash is a by-product of coal combustion and is widely used as an SCM in the production of concrete. When added to concrete, fly ash reacts with the calcium hydroxide present in the concrete to form additional cementitious materials, resulting in improved strength and durability. Fly ash increases the durability of concrete by improving its resistance to sulphate and acid attacks, reducing shrinkage and decreasing the permeability of concrete. Fly ash also enhances the workability and pumpability of concrete while reducing the heat of hydration, which reduces the risk of thermal cracking. In cold climates, fly ash helps to reduce the risk of freeze-thaw damage.
- Slag is a by-product of steel production and is used as an SCM because of its high silica and alumina content. When added to concrete, slag reacts with the calcium hydroxide present in the concrete to form additional cementitious materials, resulting in improved strength and durability. Slag increases the durability of concrete by improving its resistance to sulphate and acid attacks, reducing shrinkage and improving the strength of concrete over time. Slag also enhances the workability of concrete, reduces the heat of hydration, and improves the resistance of concrete to chloride penetration.
- Silica fume is a by-product of the production of silicon and ferrosilicon alloys and is used as an SCM because of its high silica content. When added to concrete, silica fumes react with the calcium hydroxide present in the concrete to form additional cementitious materials, resulting in improved strength and durability. Silica fume increases the durability of concrete by improving its resistance to sulphate and acid attacks, reducing permeability, and improving abrasion resistance. Silica fume also enhances the workability of concrete, reduces the heat of hydration, and improves the resistance of concrete to chloride penetration.
Overall, the use of SCMs such as fly ash, slag and silica fume can significantly improve the durability and strength of concrete in different environmental conditions. Their impact on concrete varies depending on the availability, physical and chemical properties of the specific SCM being used and proper testing and engineering analysis should be done for each mix design in order to optimise the final product.
With the global push for sustainability, how do SCMs contribute to reducing the carbon footprint of cement production?
SCMs provide an environmentally friendly alternative to traditional Portland cement by reducing the amount of clinker required to produce cement. Clinker is the main ingredient in Portland cement and is produced by heating limestone and other raw materials to high temperatures, which releases significant GHG emissions. Thus, by using SCMs, less clinker is required, thereby reducing GHG emissions, energy use and the environmental impact of cement production. Some SCMs such as fly ash and slag are by-products of other industrial processes, meaning that their use in cement production reduces waste and enhances resource efficiency. Moreover, the use of SCMs can enhance the properties of concrete, thereby increasing its durability and service life which helps to further reduce the overall embodied carbon of the structure.
In short, the use of SCMs contributes to reducing the carbon footprint of cement production by improving the efficiency of resource utilisation and reducing greenhouse gas (GHG) emissions during the production process. This has led to an increased demand for SCMs in the construction industry, as environmental concerns and sustainable development goals have become more prominent factors in the selection of building materials.
What strategies or innovations has your company adopted to ensure a consistent and reliable supply of SCMs, given their reliance on industrial by-products?
- Developing partnerships with suppliers: Many cement and concrete manufacturers establish long-term partnerships with suppliers of SCMs. These partnerships provide a reliable supply of high-quality SCMs, improve supply chain efficiency, and often provide access to new sources of SCMs.
- Advanced SCM processing techniques: Many companies are investing in advanced processing techniques to unlock new sources of high-quality SCMs. Advanced processing techniques include new separation processes, calcination techniques, and chemical activation methods.
- Alternative SCM sources: Many companies are exploring alternative SCM sources to supplement or replace traditional SCMs. Examples include agricultural by-products such as rice hull ash or sugar cane bagasse ash, which can be used in place of fly ash.
- Quality control measures: Strict quality control measures are necessary to ensure consistent quality of SCMs. Many companies use advanced testing methods, such as particle size analysis, chemical analysis, and performance testing, to validate the quality of SCM materials used in production.
- Supply chain diversification: Diversifying suppliers and SCM sources is another way to ensure a reliable supply. This reduces the risk of supply chain disruptions caused by factors such as natural disasters, market changes, or geopolitical risks.
The strategies and innovations adopted to ensure a consistent and reliable supply of SCMs include establishing long-term partnerships with suppliers, investing in advanced processing techniques, exploring alternative SCM sources, implementing strict quality control measures, and diversifying supply chains. By implementing these approaches, we ensure that use of SCMs in cement production is an effective and viable solution for reducing the environmental impact of operations
How does the use of SCMs align with your company’s broader goals around circular economy and resource efficiency?
Here are some ways in which the use of SCMs supports these goals:
- Reducing waste: The use of SCMs, such as fly ash and slag, diverts significant quantities of industrial waste from landfills, turning it into a valuable resource that can be used in construction. This helps to reduce waste and conserve natural resources.
- Reducing carbon emissions: Cement production is a significant contributor to greenhouse gas emissions, and the use of SCMs can significantly reduce the amount of cement required in concrete mixtures. This helps to reduce the carbon footprint of construction activities and move towards a low-carbon economy.
- Enhancing resource efficiency: The use of SCMs can reduce the demand for raw materials, energy, and water in the production of concrete. This not only conserves natural resources but also reduces the costs associated with the extraction, transportation and processing of these materials.
- Closing the loop: SCMs encourage closed-loop systems in the construction sector, where waste materials from one process become input materials for another. This can improve the efficiency and sustainability of the construction industry.
- Supporting sustainable design practices: The use of SCMs can support sustainable design practices by improving the durability and performance of structures while also reducing their environmental impact. This supports a circular approach to design, construction and operation of buildings and infrastructure
that improves their social, economic and environmental sustainability.
What future trends or developments do you foresee in the use of SCMs within the cement industry?
Future trends in the use of SCMs within the cement industry are likely to focus on: increased utilisation of diverse waste-derived SCMs, development of new SCM sources to address potential shortages, advanced characterisation techniques to optimise SCM blends and data-driven approaches to predict and optimise SCM usage for reduced carbon footprint and improved concrete performance; all driven by the growing need for sustainable cement production and stricter environmental regulations.
Key aspects of this trend include:
- Expanding SCM sources: Exploring a wider range of industrial byproducts and waste materials like recycled concrete aggregate, activated clays and certain types of industrial minerals as potential SCMs to reduce reliance on traditional sources like fly ash, which may become increasingly limited.
- Advanced material characterisation: Utilising sophisticated techniques to better understand the chemical and physical properties of SCMs, allowing for more precise blending and optimisation of their use in cement mixtures.
- Data-driven decision making: Implementing machine learning and big data analysis to predict the performance of different SCM combinations, allowing for real-time adjustments in cement production based on available SCM sources and desired concrete properties.
- Focus on local sourcing: Prioritising the use of locally available SCMs to reduce transportation costs and environmental impact.
- Development of new SCM processing techniques: Research into methods to enhance the reactivity and performance of less readily usable SCMs through processes like activation or modification.
- Life cycle analysis (LCA) integration: Using LCA to assess the full environmental impact of different SCMs and optimise their use to minimise carbon emissions throughout the cement production process.
- Regulatory frameworks and standards:Increased adoption of building codes and industry standards that promote the use of SCMs and set targets for reduced carbon emissions in cement production.
– Kanika Mathur
Partha Dash, Managing Director, Moglix, discusses how India’s cement industry, a key player in the country’s construction growth, is at a critical juncture as it faces the challenge of balancing expansion with sustainable practices.
According to research by construction blog Bimhow, the construction sector contributes to 23 per cent of air pollution, 50 per cent of the climatic change, 40 per cent of drinking water pollution, and 50 per cent of landfill wastes. Over the last decade cement has been one ubiquitous element in India’s construction growth story. As the world’s second-largest producer, we are seeing an impressive growth trajectory. Major players like Birla, Adani, Dalmia Bharat, JK Cement and Shree Cement are expanding fast, with plans to add 150-160 million tonnes of capacity over the next five years. This follows a substantial increase of 120 million tonnes in the past five years, pushing India’s total capacity to around 600 million tonnes. But with all this expansion, we have got a big question – How do we ensure sustainable procurement practices, in such an energy dependent industry?
Energy-intensive nature of cement production
Making cement takes a lot of energy. Process starts with limestone being mined, crushed, and grounded, using about 5-6 per cent of the total energy. The biggest energy use happens during clinker production, where around 94-95 per cent of the energy is used. Here is where limestone is heated to very high temperatures in a kiln, which needs a lot of energy from fossil fuels like coal and pet coke. Electricity is also used to run equipment like fans and kiln drives.
Once the clinker is made, it’s ground into cement. This grinding process uses another 5-6 per cent of the energy and usually happens at facilities close to where the cement is needed. Facilities that handle both clinker production and grinding in one place are generally more energy-efficient. Many of these places use coal-powered plants to supply the heat needed for the kilns, keeping production steady.
Transitioning to bulk cement
Making cement use more efficient is key to reducing the industry’s carbon footprint. In India, as per research by World Economic Forum around 75-80 per cent of cement is sold in 50kg bags to small-scale builders and individuals. But there’s often little insight into how this bagged cement is used. Research from the World Economic Forum also shows that about 40 per cent of this cement is mixed by hand. Builders sometimes use more cement than needed, thinking it will make the structure stronger, which increases emissions.
It’s crucial to educate these small-scale users about using cement efficiently. Builders need accurate information on mixing ratios and should be encouraged to adopt design techniques that use less cement. One idea suggested in the report is to put embodied carbon labels on cement bags to provide this information, helping to promote more sustainable practices at the grassroots level.
On the flip side, bulk cement, which now makes up 20-25 per cent of India’s cement use, has its own set of challenges and opportunities. Bulk cement is often used for large-scale projects that need high-strength concrete, which tends to be more carbon-intensive. However, it also makes it easier to mix in supplementary cementitious materials (SCM), which can reduce the carbon intensity of the cement. As bulk cement use grows, especially in big infrastructure projects, balancing structural needs with lower-carbon solutions will be crucial.
Challenges in sustainable procurement
The cement industry finds it hard to adopt sustainable procurement because many companies aren’t fully on board with it. Sometimes, sustainability isn’t a big focus for the company, which means top management doesn’t fully support it. This lack of support slows down collaboration with environmental experts and limits the adoption of green practices. Additionally, many clients still prefer traditional materials, which means there’s less demand for sustainable options.
In terms of knowledge and innovation, there’s a gap in understanding how to incorporate green procurement into existing practices. Many companies aren’t fully aware of the benefits of adopting green strategies or getting environmental certifications. This lack of knowledge also affects the public sector, where innovation in sustainable practices is often held back due to a shortage of technical support and experts.
There’s also a common belief that green procurement is more expensive, which can be a significant barrier, especially when resources for sustainable products are limited. Awareness and readiness for green practices are still low. Many people don’t fully understand the importance of sustainable procurement in construction, and there’s a lack of information about the market for green materials. Without adequate training and a clear structure for green purchasing, it’s difficult for companies to fully commit to sustainability. Moreover, existing policies and regulations aren’t strong enough to drive real change and without enforcement and incentives, the availability of green materials remains limited.
Opportunities in sustainable procurement
To fully understand the opportunities in sustainable procurement, Indian construction companies need to make it a key part of their business approach. This requires strong support from top leadership, including CEOs and boards of directors. When sustainability is a central focus in a company’s goals, it not only improves environmental impact but also sets the company apart in the market. Firms that focus on green practices can attract clients who value sustainability.
Working together with industry, academic institutions and government bodies is crucial for advancing green procurement. Top institutions in India like IIMs and IITs should collaborate with agencies like the Central Pollution Control Board and the Ministry of Environment. These partnerships can help develop shared goals and standards, like ISO 14000 for Environmental Management Systems, and offer training programs across the country.
It’s crucial to help clients understand how green buildings can save money over time. These sustainable structures not only cut down on running costs but also enhance the quality of life for those who live or work in them. Organisations such as the Construction Federation of India and the Builders Association of India should promote green products, which can drive demand and reduce costs by boosting production.
The government’s role is also vital. Programmes like the Pradhan Mantri Awas Yojana should focus on using green materials to show that sustainable construction can be affordable. To encourage use of sustainable materials, giving incentives like tax breaks, just like the ones for electric vehicles, could make a big difference.
Establishing a national certification for green procurement professionals, backed by organisations like the Indian Green Building Council, can help create a skilled workforce that can lead sustainable practices in the construction industry. By seizing these opportunities, India can move toward a more sustainable future in construction.
India’s leadership in sustainable cement production
India has made impressive strides in sustainable cement production. As per a research report by JMK research and analytics in 2022, the global cement industry accounted for 26.8 per cent of industrial emissions, but Indian manufacturers have been proactive in reducing their carbon footprint. The same report also states that between 2017 and 2022, the industry cut its emissions intensity by 19.4 per cent, thanks to a rise in alternative materials like fly ash and slag Blended cements, which now make up 81 per cent of India’s output, are a big part of this progress.
Leading cement producers in India, including Ultratech Cement, Shree Cement and Dalmia Cement, have committed to reducing emissions by 20 per cent by 2030, with a long-term goal of achieving net-zero emissions by 2050. Recently, the industry introduced 150 electric trucks to reduce carbon footprints, though challenges like limited charging infrastructure and high costs remain. Still, this move is expected to cut logistics expenses by 25-40 per cent. The industry is also pushing for policy support to accelerate the adoption of electric trucks and further its sustainability goals. According to report published by India Brand and Equity Foundation, some of the major investments in renewable energy and energy storage solutions include:
- UltraTech Cement plans to deploy 500 electric trucks and 1,000 LNG/CNG vehicles by June 2025, cutting transport emissions by 680 tonnes annually. They aim to reach 85 per cent green energy use by 2030 and boost production capacity to 200 million tonnes.
- Shree Cement completed a 6.7 MW solar project in Haryana in September 2022.
- Dalmia Cement aims to produce 100 per cent low-carbon cement by 2031, supported by a $405 million carbon capture investment.
- JK Cement signed an agreement with PRESPL in October 2021 to increase the use of biomass and alternative fuels, reducing reliance on coal.
Is the impossible possible?
The Indian construction and cement industries are making prudent strides toward sustainability. Recent research shows a strong link between the use of renewable energy and economic growth, highlighting the importance of reducing reliance on traditional energy sources. The construction industry, which has a large environmental impact, must adopt greener practices to help reduce pollution and waste.
The Indian cement industry is leading the way, with plans to significantly increase its use of renewable energy by 2026. This shift not only helps reduce costs but also sets a positive example for other sectors. The focus on renewable energy, like solar and wind, and efforts to avoid new thermal power plants show a clear commitment to a more sustainable future.
As the cement industry continues to push for net-zero emissions by 2050, its proactive approach is setting a new standard. These efforts not only benefit the industry itself but also provide a roadmap for others to follow. By embracing greener practices, the cement industry is helping to pave the way for more sustainable and environmentally friendly procurement practices in India.
About the author:
Partha Dash, Managing Director, Moglix, is a sales and marketing professional with 15+ years of hands-on experience in shaping businesses especially in the emerging markets.
The circular economy offers a transformative approach for the cement industry, focusing on resource efficiency, waste minimisation, and sustainable practices. ICR finds out why integrating alternative materials, reducing carbon emissions and embracing innovative technologies, is crucial for the cement sector.
The circular economy is an innovative model aimed at minimising waste and maximising the use of resources by closing the loop of product life cycles through greater resource efficiency, recycling, and reusing. Unlike the traditional linear economy, which follows a ‘take-make-dispose’ pattern, the circular economy emphasises a restorative approach that seeks to maintain the value of products, materials and resources in the economy for as long as possible.
In the context of the cement industry, which is known for its resource-intensive processes and substantial environmental footprint, embracing circular economy principles is crucial. Cement production typically involves high energy consumption and generates significant greenhouse gas emissions. By adopting circular practices, the industry can reduce its reliance on virgin raw materials, lower waste and emissions and enhance overall sustainability.
The relevance of the circular economy in cement production is evident in several key areas:
• Resource efficiency: Utilising alternative and recycled materials, such as industrial by-products or waste, can significantly reduce the demand for raw materials and lower the environmental impact of cement production.
“Utilisation of alternative raw materials in the cement industry is a key strategy for enhancing sustainability and resource efficiency. Wonder Cement has substituted traditional raw materials like limestone with industrial by-products such as fly ash, marble slurry, chemical gypsum, red mud, mine telling reject, alumina slat, iron sludge, etc. Wonder Cement not only reduces its reliance on natural resources but also mitigates environmental impacts,” says Nitin Jain, Unit Head – Integrated Plant, Nimbahera, Wonder Cement.
“Low-carbon cement production is an innovative approach by Wonder Cement aimed to reduce the carbon footprint associated with traditional cement manufacturing. This process involves several strategies to minimise CO2 emissions, which are typically high due to the energy intensive nature of clinker production. The production of blended cement, Portland Pozzolana Cement (PPC) involves mixing clinker with supplementary materials like fly ash. This not only reduces CO2 emissions but also enhances the durability and performance of the cement,” he adds.
- Waste management: Implementing strategies to manage and repurpose waste products not only helps in minimising landfill use but also creates valuable resources for reuse in cement manufacturing.
- Energy optimisation: Circular economy practices promote energy-efficient technologies and the use of renewable energy sources, contributing to a reduction in carbon emissions associated with cement production.
- Product lifecycle: By focusing on the entire lifecycle of cement products, from production to disposal, the industry can develop more sustainable practices and innovative solutions for recycling and reusing cement-based materials.
Adopting a circular economy approach is not only essential for reducing the environmental impact of cement production but also for driving innovation, enhancing resource security, and fostering long-term economic resilience in the industry.
Use of Alternative and Recycled Materials
The cement industry is undergoing a transformative shift with the increasing adoption of alternative and recycled materials. This shift is driven by the
need to reduce environmental impact, conserve natural resources, and enhance the sustainability of cement production.
Alternative materials: Alternative materials, such as industrial by-products and waste materials, are increasingly being used as partial replacements for traditional raw materials like clinker.
Common examples include fly ash, slag, natural pozzolans, etc.
Recycling plays a crucial role in minimising waste and promoting a circular economy within the cement industry. Key recycled materials include:
- Recycled concrete aggregate (RCA): Reclaimed from demolished concrete structures, RCA can be used as a partial replacement for natural aggregates in new concrete, reducing the need for virgin resources.
- Construction and demolition waste: Incorporating materials from construction and demolition activities not only diverts waste from landfills but also provides valuable resources for cement production.
The use of these alternative and recycled materials helps in reducing the environmental footprint of cement production by lowering greenhouse gas emissions, conserving natural resources, and minimising waste. Furthermore, it supports the industry’s transition towards more sustainable and circular practices, contributing to the overall goal of reducing the sector’s impact on the environment.
According to an article published by McKinsey & Company in March 2023, the cement value chain is well positioned to create closed loops, or automatically regulated systems, for carbon dioxide, materials and minerals, and energy (see sidebar ‘Three categories of circular technologies in cement’). This entails circular economies, which are based on the principles of eliminating waste and pollution, circulating products and materials, and regenerating nature. With these points in mind, circularity can work jointly with reducing carbon emissions in cement production because circular technologies follow the paradigm of three crucial decarbonisation strategies: redesign, reduce and repurpose. According to the organisation’s estimates and expected carbon prices, circularity technologies will be value-positive by 2050, with some already more profitable than today’s business-as-usual solutions.
The report estimates show that an increased adoption of circular technologies could be linked to the emergence of new financial net-value pools worth up to roughly €110 billion by 2050, providing a new growth avenue for cement players that would otherwise face shrinking demand for their core business and significant external costs. Adopting circularity is required to mitigate at least 50 percent of this value at risk. Emerging new technologies and business models will create additional value to mitigate the residual value at risk.
Reducing and Managing Industrial Waste
Efficient waste management is critical for the sustainability of the cement industry. Reducing and managing industrial waste not only minimises environmental impact but also offers opportunities to turn waste into valuable resources. Here are some key strategies of waste-to-resource initiatives:
Waste minimisation at source
- Process optimisation: Implementing advanced technologies and practices to improve process efficiency can significantly reduce the amount of waste generated. Techniques such as precise control of raw material inputs and process conditions help minimise production losses.
- Cleaner production techniques: Adopting cleaner production methods, such as the use of less polluting raw materials and more efficient equipment, can reduce waste generation at the source.
Recycling and reuse
- Alternative fuels: Industrial waste, such as tire-derived fuel or biomass, can be used as alternative fuels in cement kilns. This not only helps in reducing the consumption of traditional fossil fuels but also diverts waste from landfills.
- By-product utilisation: By-products from other industries, such as fly ash or slag, can be integrated into cement production processes. These materials not only enhance the properties of the final product but also reduce the need for virgin raw materials.
Nitin Sharma, CEO and General Manager, Clariant IGL Specialty Chemicals (CISC), says, “As our climate gives us increasing and alarming signals of change, individuals and industries are looking for ways to reduce their environmental footprints, and the demand for bio-based chemicals is set to grow strongly in the coming years. In several applications, the use of petrochemicals and fossil carbon remains a significant issue. The transition to bio-based carbon chemistry represents a significant challenge for manufacturers.”
Waste-to-resource initiatives
- Recycled concrete aggregate (RCA): Demolished concrete can be crushed and recycled into aggregate for use in new concrete mixes. This reduces the demand for natural aggregates and decreases the volume of construction waste.
- Co-processing of waste: The cement industry is increasingly adopting co-processing techniques where various types of industrial and municipal waste are processed in cement kilns. This approach helps in recovering energy and material value from waste streams while simultaneously treating hazardous materials.
- Zero-waste initiatives: Some cement plants are aiming for zero-waste targets by implementing comprehensive waste management systems that ensure all waste is either recycled, reused or recovered.
Partha Dash, Managing Director, Moglix, says, “There’s also a common belief that green procurement is more expensive, which can be a significant barrier, especially when resources for sustainable products are limited. Awareness and readiness for green practices are still low. Many people don’t fully understand the importance of sustainable procurement in construction, and there’s a lack of information about the market for green materials. Without adequate training and a clear structure for green purchasing, it’s difficult for companies to fully commit to sustainability. Moreover, existing policies and regulations aren’t strong enough to drive real change, and without enforcement and incentives, the availability of green materials remains limited.”
These strategies and initiatives reflect a growing commitment to sustainability within the cement industry. By effectively managing and repurposing industrial waste, cement producers can not only reduce their environmental impact but also contribute to a more circular and resource-efficient economy.
According to the report Indian Cement Industry: A Key Player in the Circular Economy of India published July 2020, the Indian cement industry is playing a key role by enhancing the application of renewable energy for electrical power generation. The renewable energy installed capacity (wind and solar) in cement plants increased by more than 40 per cent to 276 MW from 2010 to 2017. Out of the total, 42 MW is solar power, while off-site wind installations account for 234 MW. A company has undertaken the target of switching over to renewable energy for 100 per cent of all electrical energy needs by 2030. Big players like UltraTech Cement are targeting 25 per cent share of their total power consumption by green energy technologies.
Apart from the solar photovoltaic route, the cement industry is making efforts to tap solar energy through thermal routes.
Government initiatives
The Indian government is actively promoting circular economy principles through various policies and regulations aimed at enhancing sustainability and resource efficiency. The National Clean Energy Fund (NCEF) supports innovative projects in energy efficiency and emission reduction, including those incorporating circular economy practices.
The Swachh Bharat Mission (SBM) and Solid Waste Management Rules, 2016, focus on improving waste management and recycling, encouraging the use of recycled materials in construction and cement production. The Plastic Waste Management Rules, 2016, emphasise recycling and the use of recycled plastic, including as alternative fuel in cement kilns. The National Resource Efficiency Policy (NREP) promotes resource efficiency across sectors, including cement, and the government’s clean technology schemes incentivise the adoption of green technologies.
Additionally, the draft National Circular Economy Policy, currently in development, aims to provide a comprehensive framework for advancing circular economy practices across all industries. These initiatives collectively support the transition towards more sustainable and circular practices in the cement sector.
Emerging trends in circular economy
The cement industry is witnessing several emerging trends in circular economy practices, reflecting a shift towards greater sustainability and resource efficiency. One notable trend is the increased use of alternative fuels and raw materials. Cement producers are exploring the use of industrial and municipal waste, such as tires, plastics, and biomass, to replace traditional fossil fuels and raw materials, reducing their carbon footprint and conserving natural resources.
Another significant trend is the advancement of circular product design and lifecycle management. Cement companies are focusing on designing products that are easier to recycle or reuse at the end of their lifecycle. This includes developing new types of cement and concrete with enhanced durability
and recyclability.
Waste-to-resource initiatives are also gaining traction. Innovations in waste processing technologies enable the conversion of waste materials into valuable resources for cement production, such as incorporating recycled concrete aggregate (RCA) and by-products like fly ash and slag into new cement products.
Digitalisation and data analytics are emerging as crucial tools in advancing circular economy practices. Advanced monitoring and analytics technologies help optimise resource use, track waste streams, and improve overall efficiency in cement production.
Finally, there is a growing emphasis on collaborative partnerships. Cement companies are increasingly collaborating with governments, NGOs, and other industries to drive circular economy initiatives and develop innovative solutions for sustainable development. These trends highlight a transformative shift towards a more circular and sustainable approach in the cement industry, aligning with global efforts to reduce environmental impact and promote resource efficiency.
Conclusion
The adoption of circular economy principles in the cement industry is proving to be a pivotal step towards enhancing sustainability and reducing environmental impact. By embracing alternative and recycled materials, the industry is reducing its reliance on virgin resources and minimising waste. Government policies, such as the National Clean Energy Fund and Solid Waste Management Rules, provide crucial support for these practices, fostering a regulatory environment conducive to circular economy initiatives. Emerging trends, including the use of alternative fuels, circular product design, waste-to-resource innovations, and advanced digital technologies, underscore the industry’s commitment to resource efficiency and sustainability. Collaborative efforts across sectors further drive these advancements, paving the way for a more resilient and environmentally responsible cement industry. As the sector continues to integrate circular economy principles, it not only aligns with global sustainability goals but also sets a benchmark for other industries striving for a circular future.
– Kanika Mathur