Jignesh Kindaria highlights how Thermal Substitution Rate (TSR) is emerging as a critical lever for cost savings, decarbonisation and competitive advantage in the cement industry.

India is simultaneously grappling with two crises: a mounting waste emergency and an urgent need to decarbonise its most carbon-intensive industries. The cement sector, the second-largest in the world and the backbone of the nation’s infrastructure ambitions, sits at the centre of both. It consumes enormous quantities of fossil fuel, and it has the technical capacity to consume something else entirely: the waste our cities cannot get rid of.
According to CPCB and NITI Aayog projections, India generates approximately 62.4 million tonnes of municipal solid waste annually, with that figure expected to reach 165 million tonnes by 2030. Much of this waste is energy-rich and non-recyclable. At the same time, cement kilns operate at material temperatures of approximately 1,450 degrees Celsius, with gas temperatures reaching 2,000 degrees. This high-temperature environment is ideal for co-processing, ensuring the complete thermal destruction of organic compounds without generating toxic residues. The physics are in our favour. The infrastructure is not.
Pre-processing is not the support act for co-processing. It is the main event. Get the particle size wrong, get the moisture wrong, get the calorific value wrong and your kiln thermal stability will suffer the consequences.

The regulatory push is real
The Solid Waste Management (SWM) Rules 2026 mandate that cement plants progressively replace solid fossil fuels with Refuse-Derived Fuel (RDF), starting at a 5 per cent baseline and scaling to 15 per cent within six years. NITI Aayog’s 2026 Roadmap for Cement Sector Decarbonisation targets 20 to 25 per cent Thermal Substitution Rate (TSR) by 2030. Beyond compliance, every tonne of coal replaced by RDF generates measurable carbon reductions which is monetisable under India’s emerging Carbon Credit Trading Scheme (CCTS). TSR is no longer a sustainability metric. It is a financial lever.
Yet our own field assessments across multiple Indian cement plants reveal a sobering reality: the primary barrier to scaling AFR adoption is not waste availability. It is the fragmented and under-engineered pre-processing ecosystem that sits between the waste and the kiln.

Why Indian waste is a different engineering problem
Indian municipal solid waste is not the material that imported shredding equipment was designed for. Our waste streams frequently exceed 40 per cent to 50 per cent moisture content, particularly during monsoon cycles, saturated with abrasive inerts including sand, glass, and stone. Plants relying on imported OEM equipment face months of downtime awaiting proprietary spare parts. Machines built for segregated, low-moisture waste fail quickly and disrupt the entire pre-processing operation in Indian conditions.
The two most common failures we observe are what I call the biting teeth problem and the chewing teeth problem. Plants relying solely on a primary shredder reduce bulk waste to large fractions, but the output remains too coarse for stable kiln combustion. Others attempt to use a secondary shredder as a standalone unit without a primary stage to pre-size the feed, leading to catastrophic mechanical failure. When both stages are present but mismatched in throughput capacity, the system becomes a bottleneck. Achieving the 40 to 70 tonnes per hour required for meaningful coal displacement demands a precisely coordinated two-stage process.

Engineering a made-in-India answer
At Fornnax, our response to these challenges is grounded in one principle: Indian waste demands Indian engineering. Our systems are built around feedstock homogeneity, the holy grail of kiln stability. Consistent particle size and predictable calorific value are the foundation of stable kiln combustion. Without them, no TSR target is achievable at scale.
Our SR-MAX2500 Dual Shaft Primary Shredder (Hydraulic Drive) processes raw, baled, or loosely mixed MSW, C&I waste, bulky waste, and plastics, reducing them to approximately 150 mm fractions at throughputs of up to 40 tonnes per hour. The R-MAX 3300 Single Shaft Secondary Shredder (Hydraulic Drive), introduced in 2025, takes that primary output and produces RDF fractions in the 30 to 80 mm range at up to 30 tonnes per hour, specifically optimised for consistent kiln feeding. We have also introduced electric drive configurations under the SR-100 HD series, with capacities between 5 and 40 tonnes per hour, already operational at a leading Indian waste-processing facility.
Looking ahead, Fornnax is expanding its portfolio with the upcoming SR-MAX3600 Hydraulic Drive primary shredder at up to 70 tonnes per hour and the R-MAX2100 Hydraulic drive secondary shredder at up to 20 tonnes per hour, designed specifically for the large-scale throughput that higher TSR ambitions require.

The investment case is now
The 2070 Net-Zero target is not a distant goal for India’s cement sector. It starts today, with decisions being made on the plant floor.
The SWM Rules 2026 are already in effect, requiring cement plants to replace coal with RDF. Carbon credit markets are opening up, and coal prices are not going to get cheaper. Every tonne of coal a cement plant replaces with waste-derived fuel saves money on one side and generates carbon credit revenue on the other. Pre-processing infrastructure is no longer just a compliance requirement. It is a business investment with a measurable return.
The good news is that nothing is missing. The technology works. The waste is available in every Indian city. The government has provided the policy direction. The only thing standing between where the industry is today and where it needs to be is the commitment to build the right infrastructure.
The cement companies that move now will not just meet the regulations. They will be ahead of every competitor that waits.

About the author
Jignesh Kundaria is the Director and CEO of Fornnax Technology. Over an experience spanning more than two decades in the recycling industry, he has established himself as one of India’s foremost voices on waste-to-fuel technology and alternative fuel infrastructure.

The company has introduced water repellent cement to target rising consumer demand for weather-resilient housing solutions.

New Delhi, May 15, 2026

Dalmia Bharat Cement, one of India’s leading cement manufacturing companies, has launched Weather 365, a new super-premium water repellent cement brand aimed at addressing growing consumer demand for durable, weather-resistant construction materials in Eastern India. The product is positioned as a high-performance offering for consumers seeking long-term protection against seepage, dampness and moisture damage. The launch marks a strategic push by Dalmia Bharat Cement into the fast-growing premium cement segment, where consumer preference is increasingly shifting from price-led purchases to specialised, performance-oriented building materials.

Reinforcing its super-premium positioning, the product will be available in premium-quality water-resistant and tamper-proof BOPP packaging. ‘Weather 365’ will be introduced across its retail markets in West Bengal and Bihar.

In addition to the product rollout, the company will provide on-site technical support through its engineering and technical services teams to guide customers on best construction practices and improve long-term building performance.

Speaking on the launch, company spokesperson from Dalmia Bharat Cement said: “Weather 365 is a testament to Dalmia Bharat Cement’s relentless pursuit of innovation. Eastern India experiences prolonged monsoons, high humidity and challenging weather conditions that significantly impact the life of buildings and homes. Consumers today are actively looking for solutions that offer long-term protection and lower maintenance costs. Weather 365 is our answer to that need – a differentiated premium product that combines structural strength with advanced moisture protection that safeguards homes at every level, every season. We believe this category will see strong growth in the coming years.”

Weather 365 is a specialised cement product developed to meet the rigorous demands of modern construction in regions exposed to high humidity, heavy rainfall and extreme weather cycles. Designed for roofs, columns and foundations, it delivers end-to-end moisture protection across the entire home from the structure’s core to its visible surfaces. Its proprietary uniform water repellent technology helps reduce water penetration, minimize steel corrosion in RCC structures while preventing efflorescence and damp patches, thereby ensuring stronger concrete, improved paint life and long-lasting structural health. Positioned as a super-premium product in Dalmia Bharat Cement’s portfolio, Weather 365 targets discerning homeowners, contractors and builders who seek the best-in-class protection for their construction investments.

With a strong manufacturing and market presence across Eastern India, Dalmia Bharat Cement continues to strengthen its footprint in one of its key strategic markets. As the company advances towards its vision of becoming a pan-India cement leader, it remains focused on delivering innovative, premium construction solutions tailored to evolving consumer needs.

Dalmia Bharat Cement, a subsidiary of Dalmia Bharat Limited, is a leading player in the cement manufacturing segment and has been in existence since 1939. It is the first cement company to commit to RE100, EP100 & EV100 (first triple joiner) – showing real business leadership in the clean energy transition by taking a joined-up approach. With a growing capacity, currently pegged at 49.5 million tonne, Dalmia Bharat Cement is the fourth-largest cement manufacturing group in India by installed capacity. Spread across ten states and fifteen manufacturing units, the company is a category leader in super-specialist cement used for oil well, railway sleepers and airstrips and is the country’s largest producer of Portland Slag Cement (PSC).

A panel of industry leaders convened on April 15 to assess the cascading impact of West Asia’s geopolitical turmoil on one of India’s most energy-intensive sectors.

The ongoing conflict in West Asia has sent shockwaves far beyond the region’s borders, landing squarely on the balance sheets of Indian cement manufacturers. Rising petcoke and coal prices, disrupted shipping lanes, and constrained raw material imports are compounding operational pressures at a time when the sector is simultaneously chasing eight per cent demand growth.
These contradictions formed the backdrop of a timely webinar titled Gulf Crisis: Building Resilience in the Cement Industry, moderated by Sudeshna Banerjee, Managing Director, PS Digitech HR India. The speakers for the panel were Ashwani Pahuja, CMD, NextCem Consulting; Dr V Ramchandra, President, Indian Concrete Institute; Kaushal Sampat, Founder, Rubix Data Sciences; and Khushbu Lakhotia, Director, India Ratings and Research.

Setting the stakes
Banerjee opened the discussion by framing the financial dimensions of the crisis with precision. “According to recent analysis by India Ratings and Research, Indian cement companies are likely to face rising input costs in Q1 FY2027, driven largely by the ongoing Gulf crisis,” she noted, adding that the industry was already absorbing “a double-digit increase in coal prices, even sharper increase in petcoke prices due to supply disruption from the Middle East, and an estimated cost increase of approximately 175 to200 per tonne.”
She identified the central challenge: “How do companies protect margins while dealing with volatile fuel costs and intense competition?”

The operational reality
Dr Ramchandra outlined the breadth of disruption with clinical detail. He flagged an often-overlooked input vulnerability — polypropylene. “PP availability in the market has come down to about 50 per cent compared to the pre-war situation,” he said, explaining that the same material competes across end-uses. “It is required for food grain packaging also. Obviously, government prioritises food grain packaging, and that adds to the problems faced by the cement industry.”
Beyond packaging, he highlighted the compounding effect on core raw materials. “Cement industry requires materials like high-grade limestone import, petcoke import, gypsum import and most of these are loaded from ports in the Gulf. That is significantly hampered and has also increased the price shocks.”
He further noted that input variability was destabilising clinker manufacturing: “When the input materials vary, that frequently changes the raw meal and impacts quality variations, increasing the operation and maintenance cost.”

Energy transition as strategic response
On energy diversification, Dr Ramchandra pointed to structural levers the industry must accelerate. “This will push the industries to develop alternative or renewable energy sources like electric and solar, and also develop less energy-intensive manufacturing processes.” He highlighted waste heat recovery systems (WHRS) as a significant existing capability, explaining the thermodynamic logic: “While making clinker, we take the heat up to 1,450 degrees and then bring it back to normal temperature that heat is absorbed and used to heat the next batch of raw materials.”
He also advocated for a shift in product mix as a demand-side energy strategy: “The more we try to make low-clinker cements instead of OPC, if we make more of PPC, composite cement
and slag cement that will also help in lowering
energy consumption.”

Fuel switching and inventory strategy
Pahuja opened with an immediate-term assurance before pivoting to structural reform. On petcoke availability, he noted that approximately 30 per cent of the petcoke consumed by Indian cement plants is typically sourced from Gulf nations, particularly Saudi Arabia. “Today there are sources available from distant places like the USA or Venezuela. It is already being sourced from these countries — the productions will not be hampered and supply shortages perhaps will not be there,” he said.
However, Pahuja was unambiguous about the need for longer-term insulation. He advocated shifting from just-in-time procurement to a just-in-case inventory model: “They have to maintain minimum 90 days of inventory for materials subject to such volatilities, including petcoke, gypsum, as well as packing materials.” He further flagged the untapped potential of alternative fuel resources (AFR), pointing to India’s 70 million tonnes of annual municipal solid waste as an underutilised energy feedstock, arguing that prolonged fossil fuel cost escalation could finally make AFR pre-processing commercially viable for the industry.
On the question of whether the disruption signals a temporary setback or a structural inflection point, Pahuja was measured: “Such shocks have already been there. Industry has been moving or switching from petcoke to coal or imported coal depending on price fluctuations — they have got plenty of experience.” Yet he added that the crisis presented a clear opportunity for long-term process diversification if companies chose to act on it.

Financial resilience and industry outlook
Lakhotia brought a credit perspective to the panel, reinforcing the near-term margin risk while contextualising the sector’s underlying strength. Her firm’s analysis, cited extensively by the moderator, pointed to Q1 FY2027 as a particularly pressure-intensive quarter as existing fuel inventories are depleted and spot procurement at elevated prices becomes unavoidable.

The data governance gap
Sampat brought a sharp analytical lens to what he described as a pre-existing organisational vulnerability. “We are living in a VUCA world — volatile, uncertain, complex, and ambiguous — and that volatility is only increasing,” he said, anchoring the conversation in a broader pattern of successive global disruptions: COVID-19, the Russia-Ukraine conflict, and now the Gulf crisis.
Sampat argued that the sector’s exposure to supply shocks is amplified by fragmented data infrastructure. “Data is very siloed. Yes, you have your ERPs, your control towers, but still data is siloed.” He cited a telling statistic: “If you look at any master database of customers or suppliers and start a deduplication effort, your starting point is between 30 and 35 per cent duplicates. Because it’s all manual.” His prescription was unambiguous: “Before we talk about data-driven insights and predictive analytics, let’s get our data in order through master data management.”
On the question of real-time intelligence adoption, he observed that larger cement companies have migrated to more integrated workflows, while mid-sized players remain behind. Cash flow, he noted, was an acutely live concern: “Logistics cycles are becoming longer — and there is real pressure on cash flow.”

EBITDA under the microscope
Lakhotia delivered the sharpest financial prognosis of the panel. With power and fuel accounting for nearly 30 per cent of total cement costs and freight a further 25–27 per cent, she described the sector’s exposure as structural: “Fuel sits at the very heart of the cost structure of cement companies.”
On the EBITDA impact of the current spike, her projections were precise: “We could see a net impact of `120–150 per tonne on the EBITDA of cement companies this year.” She noted that most players carried one to three months of fuel inventory, the buffer for which was already being drawn down. “The impact of higher fuel prices will start reflecting in profitability only from Q1 FY27 onwards.”
On pricing power, Lakhotia offered a historical reference point: during the Russia-Ukraine fuel spike in FY23, when petcoke touched $200–300 per tonne, the industry managed only a 6–7 per cent price hike — partial pass-through at best. With approximately 75 million tonnes of new capacity announced for FY27, the highest in a decade, and utilisation likely settling near 70 per cent, she cautioned against optimism: “Price hikes have been announced in April, but their sustainability remains the key question.”

Multi-fuel combustion and the AI imperative
Pahuja made a compelling case for rethinking combustion system design from first principles. He advocated for multi-channel, multi-fuel burners capable of firing petcoke, coal, lignite, liquid fuels and alternative fuels simultaneously — a flexibility that he argued eliminates dependence on any single fuel source. On chloride bypass systems, he cited direct results: “Plants are now able to use 30 to 35 per cent AFR, simply by installing one chloride bypass system.”
He added that AI-enabled combustion control was no longer optional at this scale: “We have to take the help of AI so that we can control the combustion conditions and give optimum burning conditions to maintain quality and also minimise heat consumption — such systems have been proven to reduce heat consumption by as much as 5 to 10 per cent.”
On logistics, he expounded: only 20–25 per cent of cement currently moves by rail and under five per cent by waterway, with road transport absorbing the balance. He argued for a reversal — with rail at over 50 per cent, waterways at 20–25 per cent, and road limited to last-mile delivery. He also flagged EV adoption for mining equipment and transport fleets as an essential hedge against diesel cost volatility.

The tier II fault line
Lakhotia laid out the asymmetric exposure facing smaller players with clinical precision. “Tier II cement players are clearly more vulnerable in this cost cycle — typically single-region players with relatively modest brands, essentially price takers.” She noted that FY26 EBITDA per tonne for tier II companies was likely to remain meaningfully below the five to six-year average, with balance sheet headroom and liquidity cushions already reduced.
She identified blended cement as the most immediately accessible cost lever, alongside green power sourcing via group captive or lease models that limit upfront CAPEX. On logistics, she pointed to lead distance optimisation and tighter working capital discipline as near-term stabilisers.
Sampat added a financing dimension often overlooked in operational discussions: “Innovation in financing is as important as innovation in manufacturing.” He highlighted trade finance and supply chain finance as tools to relieve immediate cash flow pressure — especially relevant as companies source petcoke from newer, geographically distant suppliers requiring advance payments. “Cement companies are national assets — please take advantage of trade finance to bring down financing costs and control margins while navigating this crisis.”

Closing prescriptions
When asked for their single most important recommendation, each panellist was direct. Sampat called for “proactive stress testing — building models that factor in varying inputs rapidly to give sensitivity analysis, as of yesterday.” Lakhotia was equally unambiguous: “Reduce external energy dependence — this has been the single biggest, consistently the biggest driver of EBITDA volatility over the last decade.” Dr Ramchandra echoed the imperative for local ecosystem development and greater analytics adoption, while Pahuja closed with a historical perspective: “Out of 120 years of cement industry’s existence, for 100 years we manufactured cement without petcoke. We can definitely live without it — the industry has the capacity.”
Banerjee drew the session to a close having navigated four distinct expert registers — operational, analytical, financial and strategic, with precision and economy, ensuring each line of enquiry yielded actionable insight without losing the thread of the broader crisis narrative.