Concrete

Cement Firms May Face 19 Per Cent Profit Hit Under Carbon Scheme

ICRA says scheme could raise costs for cement and aluminium

Published

5 months ago

April 27, 2026

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India’s Carbon Credit Trading Scheme (CCTS) is operational and an analysis by ICRA ESG Ratings covering 14 companies in cement and aluminium finds a limited near-term financial impact but rising costs over time. The report indicates initial compliance costs remain absorbable while continued reliance on credit purchases may escalate production costs as emission targets tighten. The assessment suggests the effect becomes more pronounced by FY27 if current trends persist.

At an assumed carbon price of $10 per t of CO2, ICRA ESG estimates profitability for some cement companies could decline by up to 19 per cent, while aluminium players could face a hit of around three per cent. The analysis highlights widening emission gaps, with the cement sector deficit rising from about 0.5 mn t of CO2 equivalent in FY26 to 1.3 mn t in FY27. Aluminium sector gaps are projected to increase from 0.5 mn t to 1.4 mn t over the same period.

Companies that undertake timely emission reductions through measures such as blended cement, alternative fuels and renewable energy could generate surplus credits and limit compliance costs, according to the report. In contrast, firms maintaining current emission intensity levels are likely to incur recurring credit requirements, especially under higher production growth scenarios. ICRA ESG characterises the scheme primarily as a transition signalling mechanism designed to nudge companies towards lowering emission intensity rather than create an immediate financial burden.

The report sets breakeven thresholds for emission reductions, noting cement firms would need to reduce emission intensity by around 0.7 per cent in FY26 and 2.7 per cent in FY27 from FY24 levels to avoid additional credit costs. For aluminium, the required reductions are about 1.6 per cent and 5.2 per cent respectively. ICRA ESG warns that early action will be critical as delayed adjustments could compound compliance costs as the carbon market evolves.

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Concrete

Cement Firms to Invest Rs. 130 bn in Green Energy by FY28

Cement companies plan to expand clean energy capacity to 6 GW by FY28

Published

2 days ago

September 17, 2026

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India’s major cement companies are set to raise their clean energy capacity to 6 GW by March 2028 from around 4 GW at the end of March 2026, according to ratings agency ICRA. The planned expansion is expected to involve investments of Rs. 130 bn over the next two years.

The additional capacity could generate annual savings of Rs. 62 bn to Rs. 67 bn, resulting in an estimated payback period of 1.8 to 2.2 years. Cement is an emission-intensive industry, and leading producers have established net-zero roadmaps covering the next 15 to 20 years.

The calcination process accounts for 57 to 60 per cent of the sector’s total emissions, while fuel combustion contributes 27 to 30 per cent and electricity consumption accounts for 10 to 13 per cent. ICRA said the figures highlighted the need for a broad decarbonisation strategy involving green power, blended cement, alternative fuels and improvements in clinker efficiency.

Green energy is considered one of the most commercially attractive decarbonisation options because it can reduce emissions while lowering operating costs. Every 5 per cent increase in green power replacement can reduce power and fuel costs by Rs. 15 to Rs. 16 per tonne. A 25 per cent replacement level could therefore save Rs. 75 to Rs. 80 per tonne and expand operating margins by 140 to 160 basis points.

Cement producers are also assessing carbon capture, utilisation and storage, although high implementation costs, energy requirements and limited transport and storage infrastructure are expected to slow commercial adoption. The government has proposed Rs. 200 bn over five years to support deployment across key sectors. Meanwhile, companies are targeting thermal substitution rates of 10 to 15 per cent over the next three to five years, compared with the current industry level of around 6 per cent.

Concrete

Centre Defers Clearance for Limestone Mine Near Bustard Habitat

Panel seeks revised mining plan and safeguards for pipelines and wildlife

Published

3 days ago

September 16, 2026

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The Centre has deferred environmental clearance for a proposed limestone mine near a Great Indian Bustard habitat in Ramgarh, Rajasthan’s Jaisalmer district. The critically endangered species has an estimated wild population of about 130 in India.

Concrete

Telangana to Supply Subsidised Cement for Indiramma Houses

Poor families allotted Indiramma houses to receive cement at Rs. 230 per bag

Published

3 days ago

September 16, 2026

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The Telangana government will supply cement at a subsidised price of Rs. 230 per 50-kg bag to poor and low-income families allotted Indiramma houses. The prevailing market price is between Rs. 310 and Rs. 320 per bag, the Assembly was informed on Thursday.