Oil is within kissing distance of $120 per barrel as the Russia-Ukraine conflict continues in intensity. Government budgets are disrupted and inflation is knocking on all doors. Despite international economic gyrations, the Indian cement industry’s crusade towards net zero continues at an unabated pace.
Individual players have taken a keen interest and assumed the onus of responsibility of utilising alternative fuel and raw materials as well as greener energy sources. In a promising move, the Government of India has launched the Green Hydrogen policy, which will definitely add to the country’s efforts for net zero carbon emissions by 2070, as it will impact high-on-carbon-emission industries such as the cement sector. The policy entails:
• Waiver of interstate transmission system (ISTS) charges for 25 years for projects commissioned before June 30, 2025.
• Access to renewable energy through State utilities with 30 days of banking facility.
• Priority access to connectivity with the ISTS network.
• Multiple modes for procuring RE for green hydrogen production.
The Hydrogen Policy should make it possible for companies like Reliance Industries to produce blue hydrogen at a ‘competitive cost’ of about $1.2 – $1.5 per kg as it repurposes its $4 billion gasification assets. Reliance will re-purpose a Rs 300 billion plant that currently converts petroleum coke into synthesis gas to produce blue hydrogen for $1.2 – $1.5 per kilo. Hydrogen is labelled blue whenever the carbon generated from steam reforming is captured and stored. Blue hydrogen is, therefore, sometimes referred to as carbon neutral as the emissions are not dispersed in the atmosphere.
Green hydrogen – also referred to as ‘clean hydrogen’ – is produced by using clean energy from renewable energy sources, such as solar or wind power, to split water into two hydrogen atoms and one oxygen atom through a process called electrolysis.
Reliance, which has set a net-zero carbon emission target for its businesses by 2035, is looking at blue hydrogen in the interim period to reduce the cost of green hydrogen. Fossil-based hydrogen costs about $1.80, and the cost of blue hydrogen is estimated at about $2.40 – $3 per kg.
Every discussion on green cement includes how to make optimum use of slag. There has been notable development on that front with the processing of slag to create Ground Granulated Blast Furnace Slag (GGBS).The EDP data sets the global warming potential of GGBS at 60.21 kg CO2 equivalent, which is among the lowest in the industry. In an encouraging development, Tata Steel BSL has exported 9000 tonne of LD slag through the Dhamra Port Company to Bangladesh from its Odisha unit. The company has been involved in sustainable operations for its by-products, including 100 per cent recycling of fly ash, LD slag and blast furnace slag.
Cement has been in the news due to a 3-5 per cent month-on-month price increase in January across India, especially in the southern and eastern parts. Weak demand in the concluding months of 2021 made way for a spurt in demand and prices in January and February. The price jump is also attributed to the recent Russia-Ukraine crisis as it has led to a hike in energy, fuel and logistics costs. Road infrastructure, which has slowed down in current fiscal, is set for an acceleration with a target of 25,000 km next fiscal, and so is housing, as the Government has reiterated its commitment towards Housing for All by allocating `480 billion towards PM Awas Yojana. The challenge is the rising input costs of pet coke and coal amid oil price and logistics disruption. There is no room for cost inefficiency. The battle between growth in revenue and cost will sharpen in days to come.
