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Revisiting the Race to Net Zero

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The supply of carbon capture pathways holds the key for the cement industry’s success of being carbon neutral.

The Inter-Governmental Panel on Climate Change (IPCC) in their seminal thesis, ‘Working Group III Report’, which is a lengthy document, has summarised in three parts the currency of climate change actions so far and the visible pathways to the future. Firstly, it has been pointed out that the supply of renewable energy solutions from photo-voltaic cells, on-shore and offshore wind, solar and battery for electric cars have grown, hastening the drop in their unit cost. But the rise of emissions and the stock of emissions have grown unabated, other than the year 2020, when due to Covid, there was a brief respite. In 2022, the rise in emissions is back again. Thirdly, the global pathways to the emission reduction do not portray a possibility of less than a 1.5oC rise in the end of 2100, in fact the pathways are showing a rise above 2oC, simply from the fact that the stock of emissions out there do not seem to be coming down despite all the pledges and actions.
The Report summarises, “Projected cumulative future CO2 emissions over the lifetime of existing and currently planned fossil fuel infrastructure without additional abatement exceed the total cumulative net CO2 emissions in pathways that limit warming to 1.5°C (>50 per cent) with no or limited overshoot.”
Industry by industry, including the most emitting ones, has the same story line, unless outputs come down, the per unit emission after a brief sojourn, stopped to become lower.
Take cement, the per tonne emission that came down from the level of 1t to 900kg (global average) has now stagnated, with some faring better, but the overall industry is still at the alarming level and if the world continues to produce 4 billion tonne per annum of cement, with volumes moving up as new cities and urbanisation progresses, the stock of emissions do not have an easy and quick solution to be regressed.

Calculating the emissions
The major industrial pollutant emanating from the manufacture of cement is the evolution of CO2, an estimated 40 per cent of the total CO2 generated from the industry, emanates from fossil fuel burning which is used in the production process, and another 50 per cent, from the raw materials utilised and the manufacturing process, and 10 per cent from indirect emissions by transportation of finished goods. For every 1kg of cement produced, 0.9kg of CO2 is evolved, and this equates to the evolution of about 3.6 billion tonnes of CO2 produced annually, and these figures don’t take into account the emissions from the quarrying and transportation of raw materials and the transport and delivery of produced cement.

The stages where these emissions occur are:

  • The combustion of fossil fuel in the clinkering process to heat the raw material of limestone (CaCO3), produces CO2 at temperatures exceeding 1450°C.
  • The calcination process (raw material conversion) in cement production process, also generates a significant amount of CO2.
  • Indirect emission from transportation and delivery of raw materials and finished goods (electrification of vehicles shifts some of these pathways to more centralised use of renewable energy).
  • CO2 generated from fossil fuel based electricity generation means, for running plants and equipment. It should however be observed that the amount of CO2 evolved in the manufacturing process also depends on:
  1. The type of manufacturing process adopted i.e. type of kiln used.
  2. The type of fuel used (pet coke, natural gas, coal etc.).
  3. The clinker/cement ratio i.e. percentage of additives.
    CO2 emissions per kg of cement produced with several inputs used in the process reveals a picture as follows:
    It is clear that the opportunities that existed within the mix of inputs and outputs (clearly Portland cement, known as OPC in India is a no-go going by the emission pathways), the industry has exercised the best mix to get to the current improvement in emissions, which still hovers around 900 kg per tonne of cement produced and some leaders are at 850 kg, while the laggards are at 940 kg.
    This in itself would mean that lower clinker factor (slag cement, composite cement, PPC) will score over Portland cement and usage of slag (proximity to steel plants), fly ash (proximity to power plants), wet fly ash (proximity to fly ash ponds) and usage of wet fly ash and conditioned ash with freight incentives in rail have increased, thus taking us closer to the 850kg of CO2 emissions per ton of Cement output for some of the leaders in the fray. The efforts on efficiency improvement also seem to have stagnated after reaching a threshold.
    The journey from here needs to look at carbon capture and sequestration as also observed by the IPCC Report. IPCC models require carbon removals to ramp up from 0.1 gigatons of CO2 today to an average of around 6 gigatons by 2050. Carbon removals work alongside emissions reduction solutions; they are not a substitute. But at the current pace, the pipeline of carbon removal projects will fall short of the volume of carbon removals the IPPC says is required in 2025 by 80 per cent.
    What does this mean for the cement industry? What are the carbon capture and sequestration costs? How would these costs come down with development of new technology?
    If one goes by the best available technology, removing CO2 from the atmosphere and recycling it to produce synthetic fuel forever is where some of the progress is happening and the current costs of $600/T is projected to move to $100/T. But this may not be economically feasible for cement, where the current average cost of producing cement itself is $75/T.

Looking ahead
The long term focus remains to be in the direction of carbon capture and storage for cement that would mean that concrete serves as the holistic Carbon sink in more ways than one. This would mean progressing on technologies that enable capture and utilisation of CO2 directly at cement manufacturing facilities; carbon mineralisation methods in which CO2 is captured and injected into fresh concrete where it becomes permanently embedded and actually helps improve its strength; and carbon storage in which CO2 is captured and stored securely in long-term geologic reservoirs (and not used for enhanced oil recovery).
Much of this would need clear investments and transparency is of paramount importance as every progress will attract more investment and only then can the costs come down.
Going by the current gaps in the progress for Net Zero, the investment gap for the Carbon Capture and Storage and Utilisation is where all the focus must shift. The days of glorifying the achievements in mostly exploiting the low hanging fruits is over.

-Procyon Mukherjee

Concrete

Cement Makers’ Margins To Fall Rs 50-75 Per Tonne Amid West Asia Conflict

Crisil Sees Margins Easing Despite Steady Demand

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Crisil said operating margins of Indian cement manufacturers are expected to decline by Rs 50-75 per tonne (t) this fiscal to Rs 925-950 per t due to higher input costs triggered by the West Asia conflict. The analysis covered 18 cement companies accounting for nearly 90 per cent of India’s domestic cement capacity and noted margins had improved sharply to around Rs 1,000 per t in fiscal 2026.

Crisil noted that the reduction would be driven mainly by higher power and fuel costs, which account for about 30 per cent of total costs, as petcoke and imported coal prices have surged amid geopolitical uncertainties. Freight costs, which account for about a quarter of total costs, are also expected to remain elevated because of higher diesel prices. The impact on profitability is likely to be more pronounced in the first half of the fiscal year before easing commodity prices moderate cost pressures later.

The rating agency said steady domestic demand and strong balance sheets should keep credit profiles stable despite the moderation in margins. Green energy currently accounts for 35-40 per cent of the sector’s total electricity consumption and is expected to partly cushion higher energy costs. Operating cash flows are likely to remain resilient, supported by projected 6-7 per cent growth in cement demand this fiscal.

Crisil highlighted that demand growth will be driven primarily by infrastructure spending, which meets about one-third of sector consumption, and by a nearly 18 per cent higher budgetary allocation for core ministries that should support project execution. Weaker rural housing demand amid pressure on agricultural incomes from a possible below-average monsoon may be offset by improved urban housing demand supported by favourable home-loan rates and a strong pipeline of Pradhan Mantri Awas Yojana-Urban projects. Ongoing capacity additions will keep capital expenditure elevated and may lift net debt to EBITDA to between 1.2 and 1.4 times from around 1.0 time last fiscal, though ratios are expected to remain healthy.

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Concrete

UltraTech Board Approves Rs 50 bn Fundraise Via NCDs

Company to issue half a million debentures for expansion plan

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UltraTech Cement’s board of directors has approved raising Rs 5,000 crore (Rs 50 bn) through non?convertible debentures issued in rupees.

The finance committee cleared a proposal to issue up to 500,000 fully paid, unsecured, listed, rated, redeemable, rupee?denominated, non?convertible, non?cumulative debentures of Rs 1 lakh each (Rs 0.1 mn each), aggregating to the Rs 5,000 crore programme.

As of June 2026 the firm reported net debt of Rs 15,875 crore (Rs 158.75 bn) and said its capacity expansion projects under execution are backed by capital expenditure of about Rs 17,000 crore (Rs 170 bn) over the next two to two?and?a?half years.

UltraTech spent Rs 9,500 crore (Rs 95 bn) on capital expenditure in financial year 2026 and in April the group crossed 200.1 mn tonnes per annum of domestic grey cement capacity and 205.5 mn tonnes per annum of global capacity.

The chief financial officer indicated the company would take consolidated capacity beyond 242 mn tonnes per annum, with grey cement capacity reaching 212.7 mn tonnes per annum by the end of financial year 2027. He noted the net debt?to?earnings before interest, taxes, depreciation and amortisation ratio stood at 0.87 times as of June 2026 and the company was confident of ending financial year 2027 with the ratio below one time.

In the first quarter of financial year 2026?27 UltraTech’s net profit attributable to owners rose 16.8 per cent year?on?year to Rs 2,599.3 crore (Rs 25.993 bn) and revenue from operations increased 15.9 per cent to Rs 24,648.20 crore (Rs 246.482 bn). The board approval is expected to complement internal cash flows as the company advances its expansion programme.

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Concrete

Lokesh Lays Stone For Rs 31 Billion Cement Unit In Kadapa

Line-2 expansion to make Kadapa a major cement hub

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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.

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