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India’s net zero ambitions: The economic rebalancing

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The year 2050 is not far off while the enormous challenge of reducing carbon emissions stares at not only the developed nations, but developing nations as well. This is a rebalancing that encompasses several transitions in the economy from financial investments in the right technology and infrastructure interfaces, industrial and social transitions as well. While the need for financial investments is of paramount importance, one cannot ignore the deep impacts of de-carbonising the economy on people and livelihood of a large proportion of the population; the skills and expertise to cope with the future needs of a de-carbonised economy must be attended to right away.

The EU gives us some direction as they were the early starters, between 1990 and 2017, EU reduced Carbon emission by 22 per cent, while the GDP increased by 58 per cent thus decoupling greenhouse gas emissions from the economic growth. This came from large scale electrification of the energy system coupled with deployment of renewables decarbonisng energy supply and significantly reduce dependency on other third country suppliers. The improvement of energy efficiency and industrial modernization followed suit, where waste reduction and recycling took center stage.

We can take examples from two of the most energy intensive industries, cement and aluminum and the progress in the last two decades has been significant. Take Germany or Poland and the shift started from landfill laws, that became more and more stringent thus bringing in enormous focus on recycling. Take municipal waste and one would see that entire municipal waste got recycled and both these countries do not use any fossil fuels in their cement kilns. The industrial waste heat is recycled into household electrification and heating needs and very large industrial complex could be built closer to the towns because it helped to significantly reduce wastes in all forms, especially energy that could be diverted to household use, while municipal wastes could be used as fuel in the industrial heating.

Recycling of waste is all pervasive in all advanced economies of Europe thus bringing in the ten level hierarchy of progress ending with Refuse (not producing stuff) and going down the order as follows: rethink, reduce, re-use, repair, refurbish, remanufacture, repurpose, recycle and recover.

Decarbonising the transport sector by using alternative means of transport, connected and automated driving combined with the roll-out of electric vehicles and enhanced use of alternative fuels has started to give rich dividends as the Transport emissions form 24 per cent of all emissions and is a tall order. For a large economy like India the waste factor and inefficiencies of logistics alone takes away the bulk of the carbonisation needs, building efficient infrastructure and sharing the infrastructure efficiently are as important as working on electrification of mobility.

Most modern cities in Europe have moved their public transportation systems from fossil fuels completely and per capita emission has reduced by leaps and bounds as the shift from individual vehicles to public vehicles is at the root of the puzzle. Zurich for example has not increased its private car parking space for almost the last decade, thus restricting the number of vehicles that can enter the city at any point of time.

But reaping first mover benefits by modernising existing installations and investing in new carbon neutral and circular economy compatible technologies and systems will need routing of financial investments into several buckets that will put pressures on the existing expansion plans of several fossil fuel consuming industries, habits, systems and habitats. The investments have to be carefully planned in transportation infrastructure and systems, energy transition to renewable and smart grid solutions (transmission and distribution landscape) including storage systems and in smart cities that automatically create the network of carbon emission neutral solutions to everything.

This calls for investments on a massive scale as solar, wind and all renewable energy cannot be directly injected into the grid without proper storage systems in place that will be able to match supply with demand at every instant; without these the rise of renewable energy solutions will be severely limited. Connected systems that are interoperable and building on a smart network is at the core of the EU success stories.

Turning to the creation of new jobs, the focus must shift to resource allocation in efficient land, water and air usage and for sustainable agriculture, forestry and marine systems. EU has made dramatic progress here and the emission reduction in agriculture and in construction has been brought about by transitions to new technologies creating jobs.

Circular economy for a country like India must start with alternate employment opportunities for those who are currently employed in the non-renewable sectors of the economy and the puzzle can only be solved if the new skills of the circular economy can be worked on right from the schools. Here more than the investments, the intent to decouple existing economic growth drivers from carbon dependence is itself an arduous task.

ABOUT THE AUTHOR:

Procyon Mukherjee is an ex-Chief Procurement Officer at LafargeHolcim India.

Concrete

NCLT approves Burnpur Cement’s capital reduction scheme

The move aims to optimise the capital structure of the company.

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The National Company Law Tribunal (NCLT), Kolkata, has approved Burnpur Cement Limited’s scheme for the reduction of capital, as outlined in an exchange filing by the company. The petition was filed under Section 66 of the Companies Act, 2013, in accordance with the National Company Law Tribunal (Procedure for Reduction of Share Capital of Companies) Rules, 2016.

The approved scheme involves reducing the company’s issued, subscribed, and paid-up equity share capital from Rs 86.12 crore, divided into 8,61,24,363 equity shares of Rs 10 each, to Rs 17.22 crore, divided into 1,72,24,873 equity shares of Rs 10 each, fully paid-up. The move aims to optimise the capital structure of the company.

The NCLT order specifies that the capital reduction will not affect any ongoing actions by government or regulatory authorities related to violations of any laws in force. Burnpur Cement is expected to file the certified copy of the order with the Registrar of Companies (RoC) in e-form INC-28.

The bench hearing the matter included D. Arvind (Technical Member) and Bidisha Banerjee (Judicial Member).

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Cement manufacturers report margin decline in September quarter amid lower prices

The all-India average cement price saw a year-on-year decline of 11%

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Cement manufacturers have reported a decline in margins during the September quarter, primarily due to lower prices, which led to reduced sales realization. Smaller companies such as Nuvoco Vistas Corp, JK Cement, Birla Corporation, and Heidelberg Cement experienced a drop in both topline and sales volume. However, leading players like UltraTech Cement, Ambuja Cement, and Dalmia Bharat performed better, primarily due to several recent acquisitions that have bolstered their market position.

The industry faced challenges, including an extended monsoon, floods, and slow government demand, all of which contributed to weak market conditions. Despite these challenges, power, fuel, and other operational costs remained stable.

In terms of pricing, the all-India average cement price saw a year-on-year decline of 11% from ₹348 per 50 kg bag in June 2024 to ₹330 per bag in September, although it rose by 2% month-on-month. In FY25, the average cement price saw a 10% year-on-year reduction, down from ₹365 per bag in FY24.

UltraTech Cement reported a 68% capacity utilization and a 3% growth in sales volume, despite an 8.4% year-on-year decline in sales realization for grey cement. Similarly, Ambuja Cements saw a 9% increase in sales volume, reaching 14.2 million tonnes, but its EBITDA was 15% lower year-on-year at ₹1,074 crore due to lower price realizations.

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JK Lakshmi Cement Posts Loss

JK Lakshmi Cement records ?19.24 crore loss.

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JK Lakshmi Cement reported a net loss of ?19.24 crore for the second quarter of FY25, reversing the previous year’s profits. The cement giant faced a challenging period, with rising input costs and subdued demand in certain markets impacting its financial performance. The company also noted a decline in sales volumes during the quarter, which further contributed to the loss.

Despite the tough quarter, the company remains optimistic about its long-term prospects, citing the ongoing demand for infrastructure development and the potential for recovery in key regions. The management is focusing on cost optimization strategies and exploring new markets to overcome the current challenges.

The net loss marks a significant deviation from the company’s usual profit trajectory, raising questions about the impact of macroeconomic factors and inflationary pressures on the cement sector as a whole. With raw material costs and transportation expenses climbing, the company is grappling with maintaining margins while trying to sustain its market position.

JK Lakshmi Cement’s management is working to boost operational efficiency and improve financial health in the coming quarters. Analysts are keenly observing whether the company will rebound in the second half of the fiscal year, as infrastructure projects and government spending are expected to provide support to the industry.

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