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Ignore at Your Own Peril

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ICR looks at the impact of various methods such as use of alternative fuel and raw materials, tackling the emissions issue and encouraging carbon capture in a bid to make green cement and progress towards Net Zero goals.

The analytical journey is long past its prime when it comes to diagnosing the emission problem pertaining to cement and concrete. There is no denying the fact that the problem is too big.
If concrete was a country, it would be the biggest production centre as all other commodities put together will not even come close to the 30 billion tonnes of concrete that the world produces every year. If cement was a country, it would be the third highest emitter of CO2 in the world. But the efforts have been to find an approach that would force corporations to either limit and progressively reduce over time the impact on the environment through a slew of measures directed at reducing the carbon footprint of cement.
The chart attached shows the distribution of the CO2 emission based on the processing steps for making cement from limestone.

United efforts
The last five years has seen acceleration in the efforts towards finding significant pathways for reducing carbon footprint in cement production around the world. The progress on substantial reduction has been positive with concentration in the following areas:

  • Focus on Calcination Emission: Reducing clinkering by adding alternative materials that can replace clinker
  • Focus on Fossil Fuel Emission: Efficiency improvement in a number of areas that reduce the use of fossil fuels per unit of cement output, together with the use of alternative fuel.
    Under the first category, we see a rise in the use of fly ash from the coal-based power plants that replace clinker during grinding and the percentage increase in the last five years on this count would be around 2 per cent (31 per cent moving to 33 per cent with the balance being clinker). Alternatively, the use of blast furnace slag has seen a rise of 5 per cent (50 per cent moving to 55 per cent with the balance being clinker). Both of these actions have taken the total CO2 emission to 860 kg per tonne for some of the best operating plants of the world.
    The challenges for the future in this regard is that fly ash will remain a constantly depleting resource as all fresh investments into coal fired power plants are scrutinised and it is most likely that the current generation of fly ash will not move up in the coming years. This poses some challenges for the future as the emission pathways that consider use of fly ash as a potential lever for replacing clinker would have to find new pathways as a countermeasure. The use of blast furnace slag also has the same problem brewing at large as steel production is slated for overall sustainability improvement measures, which ordains reduced output of blast furnace slag as a definitive measure.

Tackling the emissions issue
This leaves the focus on alternative use of other non-fossil fuels for producing cement, where the actual progress is almost entirely hinged on renewable sources producing electricity that would be used for clinkerisation as well as for grinding. While the latter has progressed well, the former is still at a stage where a handful of cement units have signed up for the alternative technology in kilns.
Most of the technologies so far have progressed little towards solving the real issue of emission stemming from the clinkerisation process itself, as the molecular structure change from limestone to clinker involves generation of CO2 quite inevitably. The solutions therefore looked at ways of capturing carbon from the emission process, somewhat similar to the photo-synthesis process in plants as Professor Dr Aldo Seinfeld from ETH Zürich has shown. However, the progress is still at a laboratory scale and to find an economic solution will still take some time. For example, most cement kilns today produce close to 2.5 million tonnes of clinker and the sizing is only moving up, which means the amount of CO2 generation from these kilns per year would be close to 2 million tonnes. To get CO2 capturing systems to scale up to these levels would need many years.

Putting carbon to good use
The question is how can we help to scale up the capacity to sequester and store carbon from the emissions from cement kilns? The problem needs to be approached scientifically to make the process economical, which is where the current focus is. But more than the laboratories where this progress is well grounded, we need the cement corporations to set aside funds for investments that need to be made for all future kilns that have the provisions for carbon capture.
The next question is to look at how the stored carbon can be put to use in production of concrete? This requires more than the usual scientific research, as the supply chain of concrete making must factor in ways and means of finding pathways for using stored carbon in the concrete making. The Economist reports that companies like CarbonCure, a Canadian firm, are doing this. They have fitted equipment, which injects CO2 into ready-mixed concrete to more than 400 plants around the world. Its system has been used to construct buildings that include a new campus in Arlington, Virginia, for Amazon, an online retailer (and also a shareholder in CarbonCure), and an assembly plant for electric vehicles, for General Motors in Spring Hill, Tennessee.

Piloting new technologies
One of the other areas of focus has been to find an alternative route to clinkerisation that is based on electricity.
Calix, based in Sydney, Australia, is working on an electrically powered system, which heats the limestone indirectly, from the outside of the kiln rather than the inside. That enables pure CO2 to be captured without having to clean up combustion gases from fuel burnt inside the kiln—so, if the electricity itself came from green sources, the resulting cement would be completely green.
A pilot plant using this technology has run successfully as part of a European Union research project on a site in Belgium operated by Heidelberg Cement, a German firm that is one of the world’s biggest cement-makers. A larger demonstration plant is due to open in 2023, in Hanover, to help scale up the technology.
Almost all of this would need sacrifice from many stakeholders, as the cost of making cement and concrete will rise as investments have to be made in new technology. Bill Gates’ book, ‘How to Avoid a Climate Disaster,’ projected an increase of the cement making cost from the current $125 per tonne to a range of $219 to $300 if the CO2 emissions have to be taken care of for achieving Net Zero. However, the price of cement is already much above $125 per tonne even without factoring any of the carbon capture and sequestration measures, so the real rise could be much more.
A community of stakeholders, starting with the corporation making cement, the community near the cement kilns, the customers, the suppliers and the government, all have a role to play to find a solution how this increase in costs would have to be borne and distributed. Carbon taxes have always been the time-tested path to decarbonisation. Stringent use of taxes as a potent tool has seen better progress, especially in Europe, where some serious progress has happened. Recycling of cement from the demolition waste is one great example.
The best example of coordination and collaboration is captured in the initiatives of the world’s largest kiln near Wuhan, where one would witness how the city municipality came forward to proactively recycle the entire city municipal waste into the kiln of the cement unit situated on the Yangtze river. The waste is transported by barges and through a pipeline taken directly into the cement kiln. Such collaboration could replace the hard stand of putting penalties, which after all could be regressive at times.

-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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