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Union Budget 2020-21 | Remedy fails to match malady

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As the Union Budget 2020-21 failed to enthuse different segments of investors and consumers, the question that remains is: How long to wait for economic revival?

The sum and substance of reactions to the Union Budget 2020-21 presented by the Finance Minister Nirmala Sitharaman was that it has belied the expectations that there will be some "big bang" measures to stimulate demand and investments in the sagging economy, and that this was a missed opportunity to push some major economic reforms.

This year’s budget has given thrust to agriculture, irrigation and rural development, infrastructure, skill development and the beleaguered financial sector. There were some measures to support MSME sector and affordable housing too. The idea was to touch upon every aspect that could help revive the economy, with an expectation that at least a few of them will click. However, those ideas were not backed by sufficient resources, ultimately due to existing funds crunch. Though the Finance minister claimed to have announced some personal tax concessions, they are unlikely to make big difference in their disposable incomes and overall consumer demand.

The budget has also proposed to tap global sovereign funds to finance infrastructure projects, mainly due to drying up of long term domestic sources and fiscal constraints. Taking a leaf from the US president Donald Trump, the budget has hiked customs duties to protect the domestic industry from external competition. "There is some support to growth, but nothing substantial in the short term. However, the government is still eyeing the long term and has, therefore, pushed capex (the government’s capital expenditure on infra etc.). The multiplier impact of this will be positive but lagged,"said leading rating firm Crisil, in its report on budget.

The economists and analysts argued for employing all means, including deviating from fiscal roadmap in the short term, to pump prime the economic activity, but that was not to be. Tough increasing the fiscal deficit target by 0.5 per cent to 3.5 per cent deviating from its roadmap, a recent study by former Economic Advisor to the Finance Ministry Dr Arvind Subramanian, estimates the fiscal deficit figure at 5.5 per cent, after including deals kept out of government accounting.

Recently, referring to such off-balance sheet expenses resorted to by the government, its auditor, Comptroller and Auditor General of India (CAG), advised the government to make thorough disclosure on such liabilities made by the government and public enterprises to the parliament, to impart more sanctity to its accounting practices.

The government had been in denial mode of economic slowdown for some time, the latest statistics baring the ominous state of the economy prove that it hs come to terms with the reality.

Infra push
Infrastructure push given by the budget is expected to provide support to Cement consumption, albeit not in a big way. "The demand for the commodity (cement) will pick up due to infrastructure, housing and rural development related announcements," said CARE Ratings in its report, while terming it a "Positive" impact of the budget.

Adding 100 more airports by 2024, Rs 1.7 lakh crore allocation for transport infrastructure in 2020-21, development of five new smart cities and continuation of incentives to affordable housing are some of the new proposals in the budget. In the previous budgets the government has already announced its grand infrastructure plans National Infrastructure Pipeline & Accelerated Development of Highways and increased focus on inland water ways.

However, Crisil has given "thumbs down"on the sector citing falling allocations for the sector in the coming fiscal and reduction in off-budget allocations. "For the first time in years, overall infrastructure capex has fallen to Rs 4.7 lakh crore for fiscal 2021 from Rs 5.1 lakh crore in fiscal 2020 RE (revised estimates). Moreover, a 16 per cent reduction in IEBR (Internal and Extra Budgetary Resources) implies a higher burden on budgetary support and strain on government finances. Lower spend on infrastructure would also lower chances of revival in allied sectors, particularly steel and cement."

The past implementation pace on the grand plans the government had announced in the past like National Infrastructure Pipeline and Accelerated Development of Highways, on the other hand, have nothing to boast about. The national infrastructure pipeline of Rs 103 lakh crore over fiscal 2020-25 includes investments in core and allied infrastructure sectors. Excluding allied sectors such as industrial, digital, and social infrastructure, the annual core infrastructure investment amounts to Rs 15 lakh crore, or Rs 90 lakh crore over the five-year period."Of this, Rs 4.7 lakh crore would come from the Centre and Rs 2.6 lakh crore from states, leaving ~52% to the private sector. However, considering the limited number of private players and low risk-appetite of banks, private participation is a key monitorable in achieving these targets,"Crisil added.

Allocation for railways has increased by a meagre three per cent to Rs 1.6 lakh crore. "But this falls way short of the Rs 3.8 lakh crore annual investment envisaged as part of Rs 50 lakh crore investment over fiscals 2018-30. A capex of Rs 6 lakh crore was incurred between fiscals 2016 and 2020, missing the Rs 8.5 lakh crore target set for this period," Crisil pointed out.

However, CARE Ratings billed the budget impact on railways as "positive", stating, "Stable Budget for Railways with similar capital expenditure allocation and opening up of private investment for railway infrastructure creation."Setting up large solar power capacity alongside rail track to optimise electrification cost and railway electrification of 27000 km track are also positives for the sector.

The government, in August 2014, had opened up few activities (comprising suburban corridor, high speed train project, railway electrification, passenger terminals etc.) of Indian Railway for FDI and the budget re-emphasises Government focus on same. The capital outlay allocated towards the Roads and Highway sector is Rs 0.77 lakh crore. "The allocation is not in lines with the NIP where the centre is involved in providing 25 per cent of the investment,"says CARE Ratings. The budget also proposed to monetise at least 12 lots of highway bundles of over 6,000 Km before 2024, but CARE Ratings says the timely fructification of this proposal holds the key for the sector.

Though Bullet Train project figured again in the budget, it has been a laggard in implementation. While it is envisaged to operate 15 passenger trains and re-development of four stations on PPP basis, the low rate of success in the past does not inspire confidence.

In line with the budget thrust to rural infrastructure, Prime Minister Gram Sadak Yojana (PMGSY) allocations were up 39 per cent to 19,000 crore, even as achievement ratio has fallen by 74 per cent in 2019-20 from 94 per cent in 2016-17, making the budgeted target for fiscal 2021 aggressive. Moreover, rural road construction targets over the next five years under PMGSY III are lower at 125,000 km, compared with 218,000 km constructed over the past five years.

Vimal Kejriwal, MD & CEO of KEC International says, "The budget’s infra focus is expected to provide a significant fillip to KEC. Allocation towards power and renewable energy, and transport infrastructure, upgradation of stations and developing solar in railways, setting up of 100 new airports, 5 new Smart cities and linking one lakh gram panchayats with BharatNet augurs well for our businesses."

CRISIL Research’s analysis of 106 airports already awarded under UDAN reveals that 62 of these remain non-operational due to lack of basic airport infrastructure. An estimated capex of Rs 4,500-5,000 crore is needed for their revival. Thus, plan for 100 more airports would be achieved only with a lag.

Overall, tax exemptions for sovereign funds to increase foreign investor participation across infrastructure sectors is a positive with investments already visible in roads, power and airports.

Power sector too has got some nudge in the budget. Sabyasachi Majumdar, Senior Vice President & Group Head, Corporate Ratings, ICRA Ltd., says, "Shutting down of old thermal power plants will shift generation to newer generation thermal projects and thus provide a moderate boost to their plant load factors (PLF). Abolition of dividend distribution tax and lower tax rates will encourage fresh investments in the power sector, especially renewable energy and transmission sectors."

Housing
Budgetary allocation for Pradhan Mantri Awas Yojana (PMAY) at Rs 27,500 crore is up by 9 per cent over the last fiscal’s RE. PMAY-Urban has an overall target of constructing 1.12 crore houses by 2022. Of these, 1.03 crore houses have been sanctioned as of January 2020. PMAY-Rural has an overall target of 2.95 crore, of which about 0.9 crore units stand completed as of December 2019.

From the affordable housing buyer’s point of view, the additional deduction of up to Rs 1.5 lakh for interest paid on loans taken has now been extended till March 31, 2021.

Hardik Agrawal, CEO of Radha Madhav Developers says, "This budget stimulates the supply of affordable houses a tax holiday is provided on the profits earned by developers of affordable housing project approved by 31st March, 2020. Even in order to minimize suffering in real-estate transactions and provide relief to the sector, FM proposed to increase the limit of transaction from 5% to 10% (of deviation from circle price for tax scrutiny). Overall this was a consoling budget."

Malady & remedy
What is it that made this budget special? It has come in the backdrop of growth deceleration for six consecutive quarters driven by low growth in consumption and investment. The burden of two failed budgets presented in 2019 – before and after the general elections – were also weighing on the Finance Minister. Pre-poll sops were targeted towards the poor and farmers, while the post-poll budget targeted at the companies and businesses.

A drop in private consumption growth played a big role in bringing down GDP growth to an 11-year low. Private consumption growth slowed to 5.8 per cent in fiscal 2020, from 7.2 per cent in fiscal 2019. A dent to incomes, declining household savings ratio and higher household leverage have kept the consumer’s risk aversion high.

Crisil in its analysis of demand side impact of the budget, projected that some support to rural demand was expected from higher allocation to schemes like PMGSY and PMAY, which will augment incomes. "PM Kisan spending for fiscal 2021 has been maintained at the previous fiscal’s budgetary level, but the focus should be on ensuring that part of the amount does not remain unspent," Crisil suggested. Investment growth dropped to one per cent in fiscal 2020 from 9.8 per cent in fiscal 2019. While private investments have been weak, the government’s ability to fund capex also remains constrained. The budget focus on infrastructure spending will support investment to an extent as central PSU investments are projected to decline, says Crisil. However, the rating agency did not exude the same kind of confidence in growth of private investments during in the next fiscal.

Government consumption spending, mostly on the social sector schemes, supported growth in fiscal 2020. "The government has continued to focus on social sector schemes (including those that augment rural incomes, such as PMGSY, PMAY, NREGA and PM Kisan)," Crisil added.

The budget’s support to MSMEs is a "mild positive" for exports going ahead, says Crisil. Decelerating global growth, falling trade intensity, and uncertainties from the US-China trade war are hurting India’s exports. India’s exports is estimated to fall 2 per cent in fiscal 2020, compared with a growth of 12 per cent in fiscal 2019.

However, the budget is a mixed bag for the current problem in the financial sector. While bringing some relief to the beleaguered non-banking finance companies (NBFCs) by expanding scope for recovery of their bad loans is positive, seeking to remove exemptions in personal income-tax is expected to reduce savings and insurance premiums. However, increasing the bank deposit insurance coverage from Rs one lakh to Rs 5 lakh is expected to increase the confidence of bank depositors, which touched its ebb with the recent failure of co-operative banks.

Worst is not closer than it appears
For cement industry to thrive the overall economy has to be robust. The budget has pulled some levers feebly, that may not be enough to spur the economic growth pace. When private sector is not forthcoming to make investment, it is incumbent on the government and the Reserve Bank of India (RBI) to take steps to revive the economy. Even as RBI had cut the repo rate cumulatively by 135 basis points (bps) through calendar 2019, banks have cut lending rates only by just 40-50 bps.

Crisil says, "In the absence of growth kickers, growth pick-up in fiscal 2021 is expected to be largely led by the base effect and supported by somewhat better farm income (led by a good rabi crop) and the delayed impact of monetary easing. Critical to this forecast is the assumption of a normal monsoon in calendar 2020 and benign global crude oil prices."

Kapil Gupta of Edelweiss Research says, "Overall, from a business cycle standpoint, aggregate fiscal push is missing. We think, given weak demand, consolidation could have waited. Thus, the economy, at best, will see a modest bounce aided by liquidity easing, normalisation in farm cash flows amid rising food inflation, and stabilisation in exports. But the virtuous economic cycle may still be distant."

This kind of consensus among analysts leave us with the question: How long we have to wait to see economic revival?

Infrastructure in Budget

  • 100 more airports to be developed by 2024 to support UDAAN Scheme
  • Rs 1.7 lakh crore allocated towards transport infrastructure
  • Development of 5 new smart cities
  • Further incentivising and boosting affordable housing
  • Increased focus on inland water ways
  • Allowing sovereign funds to invest in infrastructure 15 new passenger trains through PPP route

    Past announcements continued:

  • Grand plans announced in the past: National Infrastructure Pipeline (NIP) & Accelerated Development of Highways
  • Provision of Rs. 22,000 cr already provided to support the NIP, to cater to equity support to infra finance companies like IIFCL and a subsidiary of NIIF
  • Bullet train project between Mumbai and Ahmedabad
  • Taxation Measures
    For corporates/ cooperative societies

  • Concessional tax rate for cooperative societies proposed (from 30% to 22%)
  • Concessional tax rate of 15% to new domestic companies extended to electricity generation companies
  • Dividend distribution tax removed; dividend will now be taxed in the hands of individuals
  • Tax concession for sovereign wealth funds of foreign governments

  • – BS SRINIVASALU REDDY

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    Concrete

    JK Cement Crosses 31 MTPA Capacity with Commissioning of Buxar Plant in Bihar

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    JK Cement has commissioned a 3 MTPA Grey Cement plant in Buxar, Bihar, taking its total capacity to 31.26 MTPA and placing it among India’s top five grey cement producers. The ₹500 crore investment strengthens the company’s national footprint while supporting Bihar’s infrastructure growth and local economic development.

    JK Cement Ltd., one of India’s leading cement manufacturers, has announced the commissioning of its new state-of-the-art Grey Cement plant in Buxar, Bihar, marking a significant milestone in the company’s growth trajectory. With the commissioning of this facility, JK Cement’s total production capacity has increased to 31.26 million tonnes per annum (MTPA), enabling the company to cross the 30 MTPA threshold.

    This expansion positions JK Cement among the top five Grey Cement manufacturers in India, strengthening its national footprint and reinforcing its long-term growth strategy.

    Commenting on the strategic achievement, Dr Raghavpat Singhania, Managing Director, JK Cement, said, “Crossing 31 MTPA is a significant turning point in JK Cement’s expansion and demonstrates the scale, resilience, and aspirations of our company. In addition to making a significant contribution to Bihar’s development vision, the commissioning of our Buxar plant represents a strategic step towards expanding our national footprint. We are committed to developing top-notch manufacturing capabilities that boost India’s infrastructure development and generate long-term benefits for local communities.”

    The Buxar plant has a capacity of 3 MTPA and is spread across 100 acres. Strategically located on the Patna–Buxar highway, the facility enables faster and more efficient distribution across Bihar and adjoining regions. While JK Cement entered the Bihar market last year through supplies from its Prayagraj plant, the Buxar facility will now allow the company to serve the state locally, with deliveries possible within 24 hours across Bihar.

    Sharing his views on the expansion, Madhavkrishna Singhania, Joint Managing Director & CEO, JK Cement, said, “JK Cement is now among India’s top five producers of grey cement after the Buxar plant commissioning. Our capacity to serve Bihar locally, more effectively, and on a larger scale is strengthened by this facility. Although we had already entered the Bihar market last year using Prayagraj supplies, local manufacturing now enables us to be nearer to our clients and significantly raise service standards throughout the state. Buxar places us at the center of this chance to promote sustainable growth for both the company and the region in Bihar, a high-growth market with strong infrastructure momentum.”

    The new facility represents a strategic step in supporting Bihar’s development vision by ensuring faster access to superior quality cement for infrastructure, housing, and commercial projects. JK Cement has invested approximately ₹500 crore in the project. Construction began in March 2025, and commercial production commenced on January 29, 2026.

    In addition to strengthening JK Cement’s regional presence, the Buxar plant is expected to generate significant direct and indirect employment opportunities and attract ancillary industries, thereby contributing to the local economy and the broader industrial ecosystem.

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    Economy & Market

    From Vision to Action: Fornnax Global Growth Strategy for 2026

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    Jignesh Kundaria, Director & CEO, Fornnax Recycling Technology

    As 2026 begins, Fornnax is accelerating its global growth through strategic expansion, large-scale export-led installations, and technology-driven innovation across multiple recycling streams. Backed by manufacturing scale-up and a strong people-first culture, the company aims to lead sustainable, high-capacity recycling solutions worldwide.

    As 2026 begins, Fornnax stands at a pivotal stage in its growth journey. Over the past few years, the company has built a strong foundation rooted in engineering excellence, innovation, and a firm commitment to sustainable recycling. The focus ahead is clear: to grow faster, stronger, and on a truly global scale.

    “Our 2026 strategy is driven by four key priorities,” explains Mr. Jignesh Kundaria, Director & CEO of Fornnax.

    First, Global Expansion

    We will strengthen our presence in major markets such as Europe, Australia, and the GCC, while continuing to grow across our existing regions. By aligning with local regulations and customer requirements, we aim to establish ourselves as a trusted global partner for advanced recycling solutions.

    A major milestone in this journey will be export-led global installations. In 2026, we will commission Europe’s highest-capacity shredding line, reinforcing our leadership in high-capacity recycling solutions.

    Second, Product Innovation and Technology Leadership

    Innovation remains at the heart of our vision to become a global leader in recycling technology by 2030. Our focus is on developing solutions that are state-of-the-art, economical, efficient, reliable, and environmentally responsible.

    Building on a decade-long legacy in tyre recycling, we have expanded our portfolio into new recycling applications, including municipal solid waste (MSW), e-waste, cable, and aluminium recycling. This diversification has already created strong momentum across the industry, marked by key milestones scheduled to become operational this year, such as:

    • Installation of India’s largest e-waste and cable recycling line.
    • Commissioning of a high-capacity MSW RDF recycling line.

    “Sustainable growth must be scalable and profitable,” emphasizes Mr. Kundaria. In 2026, Fornnax will complete Phase One of our capacity expansion by establishing the world’s largest shredding equipment manufacturing facility. This 23-acre manufacturing unit, scheduled for completion in July 2026, will significantly enhance our production capability and global delivery capacity.

    Alongside this, we will continue to improve efficiency across manufacturing, supply chain, and service operations, while strengthening our service network across India, Australia, and Europe to ensure faster and more reliable customer support.

    Finally: People and Culture

    “People remain the foundation of Fornnax’s success. We will continue to invest in talent, leadership development, and a culture built on ownership, collaboration, and continuous improvement,” states Mr. Kundaria.

    With a strong commitment to sustainability in everything we do, our ambition is not only to grow our business, but also to actively support the circular economy and contribute to a cleaner, more sustainable future.

    Guided by a shared vision and disciplined execution, 2026 is set to be a defining year for us, driven by innovation across diverse recycling applications, large-scale global installations, and manufacturing excellence.

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    Concrete

    Why Cement Needs CCUS

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    Cement’s deep decarbonisation cannot be achieved through efficiency and fuel switching alone, making CCUS essential to address unavoidable process emissions from calcination. ICR explores if with the right mix of policy support, shared infrastructure, and phased scale-up from pilots to clusters, CCUS can enable India’s cement industry to align growth with its net-zero ambitions.

    Cement underpins modern development—from housing and transport to renewable energy infrastructure—but it is also one of the world’s most carbon-intensive materials, with global production of around 4 billion tonnes per year accounting for 7 to 8 per cent of global CO2 emissions, according to the GCCA. What makes cement uniquely hard to abate is that 60 to 65 per cent of its emissions arise from limestone calcination, a chemical process that releases CO2 irrespective of the energy source used; the IPCC Sixth Assessment Report (AR6) therefore classifies cement as a hard-to-abate sector, noting that even fully renewable-powered kilns would continue to emit significant process emissions. While the industry has achieved substantial reductions over the past two decades through energy efficiency, alternative fuels and clinker substitution using fly ash, slag, and calcined clays, studies including the IEA Net Zero Roadmap and GCCA decarbonisation pathways show these levers can deliver only 50 to 60 per cent emissions reduction before reaching technical and material limits, leaving Carbon Capture, Utilisation and Storage (CCUS) as the only scalable and durable option to address remaining calcination emissions—an intervention the IPCC estimates will deliver nearly two-thirds of cumulative cement-sector emission reductions globally by mid-century, making CCUS a central pillar of any credible net-zero cement pathway.

    Process emissions vs energy emissions
    Cement’s carbon footprint is distinct from many other industries because it stems from two sources: energy emissions and process emissions. Energy emissions arise from burning fuels to heat kilns to around 1,450°C and account for roughly 35 to 40 per cent of total cement CO2 emissions, according to the International Energy Agency (IEA). These can be progressively reduced through efficiency improvements, alternative fuels such as biomass and RDF, and electrification supported by renewable power. Over the past two decades, such measures have delivered measurable gains, with global average thermal energy intensity in cement production falling by nearly 20 per cent since 2000, as reported by the IEA and GCCA.
    The larger and more intractable challenge lies in process emissions, which make up approximately 60 per cent to 65 per cent of cement’s total CO2 output. These emissions are released during calcination, when limestone (CaCO3) is converted into lime (CaO), inherently emitting CO2 regardless of fuel choice or energy efficiency—a reality underscored by the IPCC Sixth Assessment Report (AR6). Even aggressive clinker substitution using fly ash, slag, or calcined clays is constrained by material availability and performance requirements, typically delivering 20 to 40 per cent emissions reduction at best, as outlined in the GCCA–TERI India Cement Roadmap and IEA Net Zero Scenario. This structural split explains why cement is classified as a hard-to-abate sector and why incremental improvements alone are insufficient; as energy emissions decline, process emissions will dominate, making Carbon Capture, Utilisation and Storage (CCUS) a critical intervention to intercept residual CO2 and keep the sector’s net-zero ambitions within reach.

    Where CCUS stands today
    Globally, CCUS in cement is moving from concept to early industrial reality, led by Europe and North America, with the IEA noting that cement accounts for nearly 40 per cent of planned CCUS projects in heavy industry, reflecting limited alternatives for deep decarbonisation; a flagship example is Heidelberg Materials’ Brevik CCS project in Norway, commissioned in 2025, designed to capture about 400,000 tonnes of CO2 annually—nearly half the plant’s emissions—with permanent offshore storage via the Northern Lights infrastructure (Reuters, Heidelberg Materials), alongside progress at projects in the UK, Belgium, and the US such as Padeswood, Lixhe (LEILAC), and Ste. Genevieve, all enabled by strong policy support, public funding, and shared transport-and-storage infrastructure.
    These experiences show that CCUS scales fastest when policy support, infrastructure availability, and risk-sharing mechanisms align, with Europe bridging the viability gap through EU ETS allowances, Innovation Fund grants, and CO2 hubs despite capture costs remaining high at US$ 80-150 per tonne of CO2 (IEA, GCCA); India, by contrast, is at an early readiness stage but gaining momentum through five cement-sector CCU testbeds launched by the Department of Science and Technology (DST) under academia–industry public–private partnerships involving IITs and producers such as JSW Cement, Dalmia Cement, and JK Cement, targeting 1-2 tonnes of CO2 per day to validate performance under Indian conditions (ETInfra, DST), with the GCCA–TERI India Roadmap identifying the current phase as a foundation-building decade essential for achieving net-zero by 2070.
    Amit Banka, Founder and CEO, WeNaturalists, says “Carbon literacy means more than understanding that CO2 harms the climate. It means cement professionals grasping why their specific plant’s emissions profile matters, how different CCUS technologies trade off between energy consumption and capture rates, where utilisation opportunities align with their operational reality, and what governance frameworks ensure verified, permanent carbon sequestration. Cement manufacturing contributes approximately 8 per cent of global carbon emissions. Addressing this requires professionals who understand CCUS deeply enough to make capital decisions, troubleshoot implementation challenges, and convince boards to invest substantial capital.”

    Technology pathways for cement
    Cement CCUS encompasses a range of technologies, from conventional post-combustion solvent-based systems to process-integrated solutions that directly target calcination, each with different energy requirements, retrofit complexity, and cost profiles. The most mature option remains amine-based post-combustion capture, already deployed at industrial scale and favoured for early cement projects because it can be retrofitted to existing flue-gas streams; however, capture costs typically range from US$ 60-120 per tonne of CO2, depending on CO2 concentration, plant layout, and energy integration.
    Lovish Ahuja, Chief Sustainability Officer, Dalmia Cement (Bharat), says, “CCUS in Indian cement can be viewed through two complementary lenses. If technological innovation, enabling policies, and societal acceptance fail to translate ambition into action, CCUS risks becoming a significant and unavoidable compliance cost for hard-to-abate sectors such as cement, steel, and aluminium. However, if global commitments under the Paris Agreement and national targets—most notably India’s Net Zero 2070 pledge—are implemented at scale through sustained policy and industry action, CCUS shifts from a future liability to a strategic opportunity. In that scenario, it becomes a platform for technological leadership, long-term competitiveness, and systemic decarbonisation rather than merely a regulatory burden.”
    “Accelerating CCUS adoption cannot hinge on a single policy lever; it demands a coordinated ecosystem approach. This includes mission-mode governance, alignment across ministries, and a mix of enabling instruments such as viability gap funding, concessional and ESG-linked finance, tax incentives, and support for R&D, infrastructure, and access to geological storage. Importantly, while cement is largely a regional commodity with limited exportability due to its low value-to-weight ratio, CCUS innovation itself can become a globally competitive export. By developing, piloting, and scaling cost-effective CCUS solutions domestically, India can not only decarbonise its own cement industry but also position itself as a supplier of affordable CCUS technologies and services to cement markets worldwide,” he adds.
    Process-centric approaches seek to reduce the energy penalty associated with solvent regeneration by altering where and how CO2 is separated. Technologies such as LEILAC/Calix, which uses indirect calcination to produce a high-purity CO2 stream, are scaling toward a ~100,000 tCO2 per year demonstrator (LEILAC-2) following successful pilots, while calcium looping leverages limestone chemistry to achieve theoretical capture efficiencies above 90 per cent, albeit still at pilot and demonstration stages requiring careful integration. Other emerging routes—including oxy-fuel combustion, membrane separation, solid sorbents, and cryogenic or hybrid systems—offer varying trade-offs between purity, energy use, and retrofit complexity; taken together, recent studies suggest that no single technology fits all plants, making a multi-technology, site-specific approach the most realistic pathway for scaling CCUS across the cement sector.
    Yash Agarwal, Co-Founder, Carbonetics Carbon Capture, says, “We are fully focused on CCUS, and for us, a running plant is a profitable plant. What we have done is created digital twins that allow operators to simulate and resolve specific problems in record time. In a conventional setup, when an issue arises, plants often have to shut down operations and bring in expert consultants. What we offer instead is on-the-fly consulting. As soon as a problem is detected, the system automatically provides a set of potential solutions that can be tested on a running plant. This approach ensures that plant shutdowns are avoided and production is not impacted.”

    The economics of CCUS
    Carbon Capture, Utilisation and Storage (CCUS) remains one of the toughest economic hurdles in cement decarbonisation, with the IEA estimating capture costs of US$ 80-150 per tonne of CO2, and full-system costs raising cement production by US$ 30-60 per tonne, potentially increasing prices by 20 to 40 per cent without policy support—an untenable burden for a low-margin, price-sensitive industry like India’s.
    Global experience shows CCUS advances beyond pilots only when the viability gap is bridged through strong policy mechanisms such as EU ETS allowances, Innovation Fund grants, and carbon Contracts for Difference (CfDs), yet even in Europe few projects have reached final investment decision (GCCA); India’s lack of a dedicated CCUS financing framework leaves projects reliant on R&D grants and balance sheets, reinforcing the IEA Net Zero Roadmap conclusion that carbon markets, green public procurement, and viability gap funding are essential to spread costs across producers, policymakers, and end users and prevent CCUS from remaining confined to demonstrations well into the 2030s.

    Utilisation or storage
    Carbon utilisation pathways are often the first entry point for CCUS in cement because they offer near-term revenue potential and lower infrastructure complexity. The International Energy Agency (IEA) estimates that current utilisation routes—such as concrete curing, mineralisation into aggregates, precipitated calcium carbonate (PCC), and limited chemical conversion—can realistically absorb only 5 per cent to 10 per cent of captured CO2 at a typical cement plant. In India, utilisation is particularly attractive for early pilots as it avoids the immediate need for pipelines, injection wells, and long-term liability frameworks. Accordingly, Department of Science and Technology (DST)–supported cement CCU testbeds are already demonstrating mineralisation and CO2-cured concrete applications at 1–2 tonnes of CO2 per day, validating performance, durability, and operability under Indian conditions.
    However, utilisation faces hard limits of scale and permanence. India’s cement sector emits over 200 million tonnes of CO2 annually (GCCA), far exceeding the absorptive capacity of domestic utilisation markets, while many pathways—especially fuels and chemicals—are energy-intensive and dependent on costly renewable power and green hydrogen. The IPCC Sixth Assessment Report (AR6) cautions that most CCU routes do not guarantee permanent storage unless CO2 is mineralised or locked into long-lived materials, making geological storage indispensable for deep decarbonisation. India has credible storage potential in deep saline aquifers, depleted oil and gas fields, and basalt formations such as the Deccan Traps (NITI Aayog, IEA), and hub-based models—where multiple plants share transport and storage infrastructure—can reduce costs and improve bankability, as seen in Norway’s Northern Lights project. The pragmatic pathway for India is therefore a dual-track approach: utilise CO2 where it is economical and store it where permanence and scale are unavoidable, enabling early learning while building the backbone for net-zero cement.

    Policy, infrastructure and clusters
    Scaling CCUS in the cement sector hinges on policy certainty, shared infrastructure, and coordinated cluster development, rather than isolated plant-level action. The IEA notes that over 70 per cent of advanced industrial CCUS projects globally rely on strong government intervention—through carbon pricing, capital grants, tax credits, and long-term offtake guarantees—with Europe’s EU ETS, Innovation Fund, and carbon Contracts for Difference (CfDs) proving decisive in advancing projects like Brevik CCS. In contrast, India lacks a dedicated CCUS policy framework, rendering capture costs of USD 80–150 per tonne of CO2 economically prohibitive without state support (IEA, GCCA), a gap the GCCA–TERI India Cement Roadmap highlights can be bridged through carbon markets, viability gap funding, and green public procurement.
    Milan R Trivedi, Vice President, Shree Digvijay Cement, says, “CCUS represents both an unavoidable near-term compliance cost and a long-term strategic opportunity for Indian cement producers. While current capture costs of US$ 100-150 per tonne of CO2 strain margins and necessitate upfront retrofit investments driven by emerging mandates and NDCs, effective policy support—particularly a robust, long-term carbon pricing mechanism with tradable credits under frameworks like India’s Carbon Credit Trading Scheme (CCTS)—can de-risk capital deployment and convert CCUS into a competitive advantage. With such enablers in place, CCUS can unlock 10 per cent to 20 per cent green price premiums, strengthen ESG positioning, and allow Indian cement to compete in global low-carbon markets under regimes such as the EU CBAM, North America’s buy-clean policies, and Middle Eastern green procurement, transforming compliance into export-led leadership.”
    Equally critical is cluster-based CO2 transport and storage infrastructure, which can reduce unit costs by 30 to 50 per cent compared to standalone projects (IEA, Clean Energy Ministerial); recognising this, the DST has launched five CCU testbeds under academia–industry public–private partnerships, while NITI Aayog works toward a national CCUS mission focused on hubs and regional planning. Global precedents—from Norway’s Northern Lights to the UK’s HyNet and East Coast clusters—demonstrate that CCUS scales fastest when governments plan infrastructure at a regional level, making cluster-led development, backed by early public investment, the decisive enabler for India to move CCUS from isolated pilots to a scalable industrial solution.
    Paul Baruya, Director of Strategy and Sustainability, FutureCoal, says, “Cement is a foundational material with a fundamental climate challenge: process emissions that cannot be eliminated through clean energy alone. The IPCC is clear that in the absence of a near-term replacement of Portland cement chemistry, CCS is essential to address the majority of clinker-related emissions. With global cement production at around 4 gigatonnes (Gt) and still growing, cement decarbonisation is not a niche undertaking, it is a large-scale industrial transition.”

    From pilots to practice
    Moving CCUS in cement from pilots to practice requires a sequenced roadmap aligning technology maturity, infrastructure development, and policy support: the IEA estimates that achieving net zero will require CCUS to scale from less than 1 Mt of CO2 captured today to over 1.2 Gt annually by 2050, while the GCCA Net Zero Roadmap projects CCUS contributing 30 per cent to 40 per cent of total cement-sector emissions reductions by mid-century, alongside efficiency, alternative fuels, and clinker substitution.
    MM Rathi, Joint President – Power Plants, Shree Cement, says, “The Indian cement sector is currently at a pilot to early demonstration stage of CCUS readiness. A few companies have initiated small-scale pilots focused on capturing CO2 from kiln flue gases and exploring utilisation routes such as mineralisation and concrete curing. CCUS has not yet reached commercial integration due to high capture costs (US$ 80-150 per tonne of CO2), lack of transport and storage infrastructure, limited access to storage sites, and absence of long-term policy incentives. While Europe and North America have begun early commercial deployment, large-scale CCUS adoption in India is more realistically expected post-2035, subject to enabling infrastructure and policy frameworks.”
    Early pilots—such as India’s DST-backed CCU testbeds and Europe’s first commercial-scale plants—serve as learning platforms to validate integration, costs, and operational reliability, but large-scale deployment will depend on cluster-based scale-up, as emphasised by the IPCC AR6, which highlights the need for early CO2 transport and storage planning to avoid long-term emissions lock-in. For India, the GCCA–TERI India Roadmap identifies CCUS as indispensable for achieving net-zero by 2070, following a pragmatic pathway: pilot today to build confidence, cluster in the 2030s to reduce costs, and institutionalise CCUS by mid-century so that low-carbon cement becomes the default, not a niche, in the country’s infrastructure growth.

    Conclusion
    Cement will remain indispensable to India’s development, but its long-term viability hinges on addressing its hardest emissions challenge—process CO2 from calcination—which efficiency gains, alternative fuels, and clinker substitution alone cannot eliminate; global evidence from the IPCC, IEA, and GCCA confirms that Carbon Capture, Utilisation and Storage (CCUS) is the only scalable pathway capable of delivering the depth of reduction required for net zero. With early commercial projects emerging in Europe and structured pilots underway in India, CCUS has moved beyond theory into a decisive decade where learning, localisation, and integration will shape outcomes; however, success will depend less on technology availability and more on collective execution, including coordinated policy frameworks, shared transport and storage infrastructure, robust carbon markets, and carbon-literate capabilities.
    For India, a deliberate transition from pilots to practice—anchored in cluster-based deployment, supported by public–private partnerships, and aligned with national development and climate goals—can transform CCUS from a high-cost intervention into a mainstream industrial solution, enabling the cement sector to keep building the nation while sharply reducing its climate footprint.

    – Kanika Mathur

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