Asok Kr. Dikshit, Richa Mazumder, Sanjeev Kr. Chaturvedi and Lok Pratap Singh, National Council for Cement and Building Materials (NCCBM), discuss the various tenets that are critical for sustainable development of India’s cement sector, in the first piece of a three-part series.
India is the second largest producer of cement in the world and accounts for approximately 8 per cent of global cement production (WBCSD 2019). The cement production in India will reach 1.360 billion tonnes annually by 2050 as estimated by the Cement Manufacturers Association (CMA) (WBCSD 2019). The Indian cement sector is the fifth-largest contributor to India’s economy and plays a fundamental role in the socio-economic growth of the nation as it directly provides essential support to the economy, employment and infrastructural development (Dasgupta and Das 2021). As per the WBCSD report (2019), four themes that are most critical towards India’s sustainable development in the cement sector are: i) energy and climate; ii) people and communities; iii) circular economy; and iv) natural resource management (Fig 1). The Indian cement sector is already facing sustainability issues due to a number of factors like energy and water consumption, material and resource management, reduction in GHG emissions, waste management etc. The viable solutions are energy efficiency, green power generation, reducing reliance on depleting fossil fuels and using alternative fuels and raw materials, enabling water conservation, environment biodiversity protection, reduction in CO2 emissions, setting targets of sustainability for future, etc. India has made the pledge to cut the CO2 emissions in the COP26 summit at Glasgow, UK, on the new climate action targets ‘Panchamrit’ as below: (i) A net zero target for India by the year 2070; (ii) installing non fossil fuel electricity of 500 GW by 2030; (iii) sourcing 50 per cent of energy requirement from renewables by 2030; (iv) reducing one billion tonnes of projected emission from now till 2030 and achieving carbon intensity reduction of 45 per cent over 2005 levels by 2030. The first theme i.e., energy and climate include the impact opportunities in the form of low-carbon transportation and logistics, resilient and sustainable built environment and energy efficiency and use of clean energy. The second theme, people and communities include skills enhancement, enhance diversity and inclusiveness and transport safety. The third theme which is circular economy mostly concentrates on using waste as resource and the fourth theme is natural resource management in terms of limestone, fuel, water, biodiversity etc. In this paper, the R&D work carried out in NCB under these themes has been discussed in detail.
ENERGY AND CLIMATE For sustainable cement production one of the key aspects is energy efficiency. To optimise processes and minimise energy consumption the cement sector has been actively investing in energy-efficient technologies. Cement production requires electrical energy at several stages, from crushing of raw materials over clinker production and cement grinding. In a cement plant, power for different operations is typically distributed as follows: 5 per cent for raw material extraction and blending, 24 per cent for raw material grinding, 6 per cent for raw material homogenisation, 22 per cent for clinker production, 38 per cent for cement production, 5 per cent for conveying, packing and loading (refer Fig 2).
As per Xu et al (2013) the savings from reduced use of coal are in general less cost effective compared to electricity savings, mainly due to much lower coal price. Morrow et al (2014) substantiates that for the Indian cement sector, the largest potential in electricity saving is from low temperature WHR power generation, which saves purchased electricity by generating electricity from the waste heat onsite and replacing a ball mill with a vertical roller mill in finish grinding. As per the CMA’s estimates, the WHR potential of the Indian cement sector is more than double the currently installed capacity (WBCSD 2019). To capture and utilise excess heat, upgradation of kilns and equipment, preheaters, cogeneration, optimising production processes and waste heat recovery systems are being deployed in plants so that less energy is needed to produce cement. These help in significantly reducing the energy consumption and associated greenhouse gas emissions. This will not only lead to reducing greenhouse gas emissions but also contribute to the overall energy efficiency of the plant. By improving energy efficiency and using renewable energy sources, the industry can reduce its dependence on fossil fuels and lower its operating costs. To address the barriers to energy efficiency within the industrial sector, the Indian Bureau of Energy Efficiency (BEE) has implemented the Performance, Achieve and Trade (PAT) scheme. It focuses on incentivising energy efficiency in the industrial sector which also includes the cement sector. The selected facilities or the Designated Consumers – DC represent the highest energy consumers within each of the selected sectors. They have their own assigned target for energy consumption (Marinelli 2022). This target is defined as a percentage reduction from the corresponding baseline and depends on the best per- forming plant within the sector on a proportional basis. Indian Bureau of Energy Efficiency would issue Energy Saving Certificates (ESCerts) to Designated Consumers on achievement of the targets established, based on respective savings. Designated Consumers that do not meet the targets will be required to either buy Energy Saving Certificates from entities that over achieve the targets and are issued excess certificates or pay penalties. The Energy Saving Certificates will be tradable and bankable in a market between the Designated Consumers, with their price being determined by the market. In its first cycle (2012–2015), PAT has mandated an energy reduction of 6.86 million metric tonnes of oil equivalent (Bhandari and Shrimali 2018). It is evident that the cement industry is an energy intensive industry and is predominantly reliant on conventional fuels and responsible for 6 to 9 per cent of global CO2 emissions due to which it has a huge impact on the environment. It has been estimated that out of the total CO2 emission caused due to anthropogenic activity, approximately 5 per cent is caused by the cement sector worldwide. These emissions are released in the course of activities like clinker production, fuel consumption in cement kilns, use of coal in captive power plants and supply chain operations. Apart from CO2 other GreenHouse Gases (GHGs) like sulphur dioxide and nitrogen dioxide are also amplifying the problem of emissions due to its ill effects like ozone depletion, global warming, acid rain, various health issues, etc. By adopting green technologies and practices, the cement sector not only can reduce its GHG emission but also help in protecting the environment while doing cost optimisation. Best Available Technology (BAT) is the way on which the Indian Cement industry has always relied to stay most efficient and sustainable. To achieve techno-economic viability and remain ahead, the cement sector is continuously performing R&D on green technology/products at scale. It is well noticeable that to reduce energy as well as process related greenhouse gases emission Indian cement sector has adopted decarbonisation levers as shown in Fig 3.
The study by IEA (2013) predominantly highlights the major levers for both direct and indirect reduction of emissions in the context of the Indian cement sector: (i) the use of fuels such as biomass and alternative materials like industrial or sorted municipal waste (e.g. waste tyres, sewage sludge, animal residue, waste oil, paper residue, plastic, textile), (ii) the substitution of limestone by other blending materials (e.g. slag or fly ash), (iii) the use of state-of-the-art technologies to increase thermal and electrical energy efficiency in cement plants, (iv) and the converting to waste heat recovery (WHR) technologies to convert thermal energy, otherwise lost in cement manufacture, to electricity.
People and Community NCB has been imparting the required skills for technical manpower for the cement and construction sectors since 1972. NCB’s Continuing Education Services Centre (CCE) with its experienced faculty and modern infrastructural facilities like lecture halls, auditorium, computer centre, hostel, canteen etc., is imparting training on cement, concrete and construction technologies through its various Training Programmes (Short Term courses in Cement and Concrete Technology, Long Term, Simulator Based, Contact and Special Group Training Programmes) to technical professionals of all levels in various organisations in India and abroad. NCB organises customised Special Group Training Programmes giving emphasis on specific topics related to cement and concrete. The training programmes include class room lecture, presentations, laboratory demonstrations and site visits wherever necessary. NCB organises international seminars on Cement, Concrete and Building Materials biennially since 1987. The 17th NCB International Seminar including the technical exhibition was successfully organised in December 2022 in the series of biennial seminars.
Circular Economy Circular economy aims towards maximisation of efficiency of resources and minimisation of waste/by-products generated by different industries. Cement industries are actively exploring ways to incorporate industrial waste and by-products as raw materials or fuel substitutes in cement production. This will not only help in reducing the consumption of natural resources (limestone, gypsum etc.) but also diverts waste from landfills and reduces environmental impact. Circularity in cement and concrete industries can be clustered in three technological categories: CO2 emissions, materials and minerals and energy. The cement sector is well positioned to create closed loops or circularity for carbon dioxide, materials, and energy. This necessitates circular economies, which are based on the principles of eliminating waste, by-products, pollution and maximisation of resources. (Fig.4) Circular Economy in cement sector helps in reducing GHG emissions in cement production because circular technologies follow the paradigm of three crucial decarbonisation strategies: redesign, reduce, and repurpose. (GCCA 2021) To start, addressing the total volume of materials needed or redesigning materials, buildings, and infrastructure can play a critical role. Second step is shifting from fossil to alternative fuels can help reduce emissions from materials. The last step i.e., repurposing, repairing, and refurbishing existing assets and infrastructure will help limit the need for new products by utilising captured carbon dioxide emissions and reinserting them into the value chain.1 Cement industry contribution to circular economy is primarily under two heads i.e. (i) Circular Supply Chain, (ii) Recovery and Recycling. Indian cement industry is playing a key role by enhancing the application of Renewable Energy for electrical power generation. The renewable energy installed capacity (wind and solar) in cement plants increased by more than 40 per cent to 276 MW from 2010 to 2017. Out of the total, 42 MW is solar power, while off-site wind installations account for 234 MW. A company has undertaken the target of switching over to renewable energy for 100 per cent of all electrical energy needs by 2030.2 Big players like UltraTech Cement are targeting 25 per cent share of their total power consumption by green energy technologies by 2021.3
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.
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.
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.