The Indian cement industry knows the premise it stands on, in terms of carbon emissions.
The Indian cement industry knows the premise it stands on, in terms of carbon emissions. What remains is an accelerated effort in tackling the imminent issue of climate change and making good all its commitments for net zero. The Race-to-Zero is not just a race against carbon emission, it is one against time.
The presentation below is taken from the Emissions Gap Report published by the partnership of UN Environmental Program (UNEP) and DTU late in October, just preceding the Climate Summit at Glasgow. The data is revealing, the message is loud and clear that the current pledges and actions included do not bode well for the trajectory of emissions moving forward into 2030 or beyond. There is a lot more that needs to be done.
The summary of the report, given as its foreword, states, “To get on track to limit global warming to 1.5°C, the world needs to take an additional
28 gigatonnes of carbon dioxide equivalent (GtCO2e) off annual emissions by 2030, over and above what is promised in updated unconditional NDCs.” NDC or the Nationally Determined Contribution is the guiding light for tracking initiatives against reduction in emissions as declared by nations.
What does the report card say so far on what we have done from 2010 to now; the current actions put in place will reduce 11 GtCO2e in 2030, now that is not a small number, had these actions not been put on ground, so much progress would not have happened.
But the reality is very different, the world still emits close to 50 GtCO2e per year and that means the stock of emissions is rising by the day and much more needs to be done till we reach a state of no further rise in stock. That is where the pledges of net zero come in, when from corporate to the common man to the communities and government, who take decisions every day, it will come as the overriding priority to act.
Realistic goals
Let us dig into some details of where we are headed, given this conundrum, despite the discussions and agreements so far, the Glasgow talks included. Let us start with some bad news that the euphoria about the 5.4 per cent drop in emissions in 2020 was short lived, thanks to the pandemic, as it is now predicted that the emissions will bounce back to a rise of 4.8 per cent over 2020 in 2021. The peculiar case is that despite a drop in CO2 emissions the concentration of CO2 in the atmosphere grew by 2.3 parts per million, which effectively means that the atmosphere would never even feel any change.
The second area to look at would be the mitigation pledges and where they fall short of the target. The way to look at these pledges is to look at the NDCs. Just under half (49 per cent ) of the new or updated NDCs submitted (from countries accounting for 32 per cent of global emissions) result in lower 2030 emissions than the previous NDC. Around
18 per cent of the NDCs (from countries accounting for 13 per cent of global emissions) will not reduce 2030 emissions relative to the previous NDC. The remaining 33 per cent of NDCs (from countries accounting for 7 per cent of global emissions) contain insufficient detail to assess their impact on emissions relative to the previous NDC.
As a group, G20 members are not on track to achieve either their original or new 2030 pledges. Ten G20 members are on track to achieve their previous NDCs, while seven are off track. The US EU27, the UK and Canada are the top countries that have shown a higher change in emission reduction.
Only 10 G20 members (Argentina, China, EU27, India, Japan, the Russian Federation, Saudi Arabia, South Africa, Turkey and the UK) are likely to achieve their original unconditional NDC targets under current policies. Among them, three members (India, the Russian Federation and Turkey) are projected to reduce their emissions to levels at least 15 per cent lower than their previous unconditional NDC emissions target levels under current policies.
A promising development is the announcement of long-term net zero emissions pledges by 50 parties, covering more than half of global emissions. However, these pledges show large ambiguities. Few of the G20 members’ NDC targets put emissions on a clear path towards net zero pledges. There is an urgent need to back these pledges up with near-term targets and actions that give confidence that net zero emissions can ultimately be achieved and the remaining carbon budget kept.
Twelve G20 members covering just over half of global domestic GHG emissions have currently pledged a net zero target, of which six are in law, two are in policy documents and four are government announcements. All are for the year 2050, with the exception of China’s 2060 target and Germany’s target for 2045. The remaining eight G20 members have so far not set net zero targets, but three of them have communicated long-term low GHG emission development strategies to the UNFCCC (Indonesia, Mexico and South Africa).
Only Canada, the European Union, France, Germany and the Republic of Korea have published their plans at the time of completing this report, and only these countries plus the United Kingdom have accountable processes for reviewing their targets.
The emissions gap remains large; compared to previous unconditional NDCs, the new pledges for 2030 reduce projected 2030 emissions by only
7.5 per cent , whereas 30 per cent is needed for 2°C and 55 per cent is needed for 1.5°C.
Two very significant findings are:
1. Global warming at the end of the century is estimated at 2.7°C if all unconditional 2030 pledges are fully implemented and 2.6°C if all conditional pledges are also implemented. If the net zero emissions pledges are additionally fully implemented, this estimate is lowered to around 2.2°C.
2. The opportunity to use COVID-19 fiscal rescue and recovery spending to stimulate the economy while fostering a low-carbon transformation has been missed in most countries so far. Poor and vulnerable countries are being left behind.
This leaves us with two decisive areas of focus:
A. Reduction of methane emissions from the fossil fuel, waste and agriculture sectors can contribute significantly to closing the emissions gap and reduce warming in the short term.
B. Carbon markets can deliver real emissions abatement and drive ambition, but only when rules are clearly defined, designed to ensure that transactions reflect actual reductions in emissions, and supported by arrangements to track progress and provide transparency.
The case for negotiations is well understood as with nations like India and China, who have a lot at stake on the Coal related tapering off to be done over the next decades and this is not an easy task. The next area is to focus on the investment vehicles to focus on decarbonising several of the fossil fuel guzzling industries, where the net zero pledges must have a way of formal review. This is where the world’s attention must be focused on.
Andhra Pradesh Education and IT Minister Nara Lokesh on Wednesday laid the foundation stone for the Line-2 expansion of Dalmia Bharat Cement at Chinnakomerla village in Mylavaram Mandal in Kadapa district. The project carries an investment of Rs 31 billion (bn) and is slated for completion by the third quarter of the financial year 2028. The expansion is intended to boost industrial growth and employment generation across the Rayalaseema region.
Once commissioned, the Kadapa facility will become Dalmia Bharat’s largest integrated cement manufacturing ecosystem in southern India, creating over 1,000 direct and indirect jobs and opening new business avenues for regional micro, small and medium enterprises and transport operators. Lokesh said the expansion signalled growing corporate confidence in the state and reflected the practical ease of doing business that secured repeat investment.
He placed the project within the government’s wider economic targets and recalled the Yuvagalam padayatra commitment to generate two million (mn) jobs within five years, noting that the state would cultivate talent while industry created opportunities. Lokesh highlighted Andhra Pradesh’s competitive pursuit of major manufacturing accounts, mentioning past successes and a personal initiative to engage global investors when persuading them to anchor expansion in the state.
The plant will leverage Kadapa’s abundant limestone reserves to scale production and sustainability. Clinker capacity is planned to rise from two point five million tonnes per annum (mn tpa) to six point one mn tpa, while overall cement output will increase from three point six mn tpa to nine point six mn tpa. The unit is designed to operate on over eighty per cent renewable energy and deploy waste heat recovery, zero liquid discharge, water recycling and advanced AI systems to optimise efficiency. Industries Minister TG Bharat, BC Welfare Minister S. Savitha and Jammalamadugu MLA C. Adinarayana Reddy attended the ceremony.
HDFC Securities has said the cement industry is unlikely to register a sequential increase in prices in Q2 FY27 as monsoon-related demand moderation coincides with rising fuel and packaging costs that will squeeze margins. The brokerage observed that price gains remained modest, with increases of two to three per cent quarter-on-quarter across regions, and noted subdued offtake in May with improvement in June as a delayed monsoon supported construction activity. The brokerage added that modest pricing gains so far have been insufficient to offset the input cost escalation.
The report stated that input cost pressures intensified in Q1 FY27 owing to the West Asia conflict, which pushed up coal and pet coke prices and is expected to keep fuel costs elevated, with a likely peak in Q2 FY27. It assessed that total variable costs, including packing, could rise by around Rs 150 per t quarter-on-quarter and that lower offtake and seasonal operating deleverage could further raise operating expenditure by about Rs 50 per t quarter-on-quarter.
Overall, cement prices were estimated to remain flat in Q2 FY27 as monsoon-led demand weakness offsets limited upside in realisation, and rising fuel costs alongside seasonal deleverage were expected to compress industry margins by over Rs 100 per t quarter-on-quarter to below Rs 880 per t. The brokerage indicated that the combined impact of energy inflation and higher packing expenditure would be the principal drivers of margin contraction in the near term. HDFC Securities projected a recovery in margins in H2 FY27 should the West Asia turmoil subside and energy and packing costs cool off.
The brokerage expressed optimism on long-term demand fundamentals and said improving realisation together with an anticipated cost cool-off should support a margin rebound from H2 FY27 onward, underpinning favourable industry prospects over the medium term. Its outlook rests on monsoon normalisation and a decline in imported fuel prices in the second half of the fiscal year.
Dalmia Bharat Limited recently laid the foundation stone for its second manufacturing unit at Kadapa in Andhra Pradesh. The company will invest Rs 31 billion in developing the next-generation integrated cement manufacturing facility.
The foundation-laying ceremony was attended by Nara Lokesh, Andhra Pradesh Minister for Information Technology, Electronics and Communications, Real-Time Governance and Human Resources Development, along with Puneet Dalmia, Managing Director and Chief Executive Officer, Dalmia Bharat, senior government officials and company representatives.
Scheduled to be commissioned by the third quarter of FY28, the Kadapa unit will become Dalmia Bharat’s largest integrated manufacturing facility in southern India. It will have a clinker production capacity of 6.1 million tonnes per annum and a cement manufacturing capacity of 9.6 million tonnes per annum.
The facility is designed to produce what the company describes as one of the world’s greenest cements. It is also expected to generate approximately 1,000 direct and indirect employment opportunities while supporting local MSMEs, transporters, contractors and service providers.
Lokesh said the investment reflected Dalmia Bharat’s confidence in Andhra Pradesh and aligned with the state’s objective of promoting sustainable industrialisation, job creation and technology-led economic growth.
Puneet Dalmia said the project represented the company’s long-term vision of developing low-carbon cement manufacturing assets. He added that the facility would establish new benchmarks in operational efficiency and sustainability while supporting India’s infrastructure and environmental goals.
Dalmia Bharat will also expand its regional community development programmes in education, healthcare, skill development and welfare through its DIKSHa and Gram Parivartan initiatives.
The company currently has an installed cement manufacturing capacity of 54.7 million tonnes across 19 manufacturing units in 12 states. It is also the first cement company globally to commit to the RE100, EP100 and EV100 initiatives.