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Looking Beyond the Low Hanging Fruits

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With the Net Zero targets looming in the near future and an imminent problem of emissions to contend with, the Indian cement manufacturing sector should no longer be satisfied with doing the bare minimum. Looking at innovative solutions, breakthrough technologies, automation and artificial intelligence, and most importantly, a change in mindset, is the need of the hour.

There is no denying the fact that cement being the second most consumed material after water in the world in terms of quantity, and by virtue of its inherent conversion process from limestone to clinker, the amount of CO2 emission from cement alone (7 per cent of all emissions) is one quarter of all industry emissions put together. Even in dollar terms the maximum CO2 per dollar of revenue industry-wide shows cement taking the top spot at 6.9 kg of CO2 per dollar.
The process of cement making has majorly two areas – raw material resources and clinker and cement manufacturing, where the emission needs to be segregated into its constituent elements, both from the point of view of energy consumption and also in terms of CO2 emissions. While two-thirds of the emissions stem from the calcination process, which is where the bulk of the thermal energy is consumed, the raw material extraction to feed generates negligible amounts of emissions and the cement grinding from clinker and logistics makes the bulk of the remaining emissions. The total emissions of 925 kg per tonne of cement production leaves a staggering 4 billion tonnes of CO2 generation each year, as the world produces 4.2 billion tonnes of cement annually.


The pathways through which the industry has progressed so far can be seen in the following areas:

  • Energy Efficiency
  • Alternative Fuel
  • Clinker Substitutes
  • New Technologies
  • Alternative Building Materials

If one goes into the analysis of each of these levers that the cement industry is currently using, the first three have remained the low hanging fruits where most of the attention and energy had been diverted to. These top three levers have so far fetched about 25 per cent of the CO2 emission reduction possibility into 2050, with energy efficiency showing a possibility of 7.2 per cent, alternative fuel a possibility of 10.5 per cent and clinker substitution 7 per cent. However, the investments needed for these and the abatement cost per tonne of CO2 would look very different for each. For example, alternative fuel would still need disposal cost, carbon capture and storage as well and the investments for these would make this category the highest in terms of abatement cost. The following table gives this as follows among all the levers:

So far, the cement industry has focused on the low hanging fruits, mostly clinker substitution after working on efficiency improvement levers, where the abatement costs were negative, giving economic benefits to the cement makers. Driven by the country’s landfill laws and pollution control norms, some of the advanced countries have outright rejected use of coal and PetCoke in cement kilns, replacing that with alternative fuel and biomass. However, these have to go through the abatement cost of Carbon Capture and Storage, which has been so far very high. Let us go through each category and see what is the current stage of development of these areas of focus.
Efficiency Improvement: The last step change for cement kiln technology was in the case of dry process replacing the wet process, thereafter the recent advancement has happened in the use of electrical energy instead of thermal energy for the kiln conversion process. This has been put to commercial use but till we use renewable energy in kilns, this does not give any advantage in terms of overall gain in emission. The replacement cost of thermal to electrical could be very high as well, so the future electrification of kilns, depends on use of renewables that must be part of a stable grid power, which raises many actions to be taken.
Clinker Substitution: Maximum gains have happened so far in reduction of emission by adopting various means to replace clinker with fly ash, slag etc., but the future could actually have very little of this available as generation of electricity moves to the renewable mode and the steel companies adopt more of the green technology that would generate far less waste eventually from the process.
Alternative Fuel: The availability of alternative fuels depends largely on the development of local supply chains that must wade through a number of constituencies like the local municipalities for the municipal wastes and the development of logistics systems have a lot to be desired. The only hope remains the use of biomass, which is the highest growing segment. The investments here include not only the platforms but also avenues of de-chlorination, etc.
Carbon Capture Use and Storage (CCUS): This method isolates and collects CO2 from industrial emissions and either recycles it for further industrial use or safely stores it underground. Once captured, a wide variety of potential uses for CO2 could be possible, such as in the production of glass, plastics, or synthetic fuels. Though carbon-capture technologies do exist commercially, they are utilised in very few plants—one example being natural-gas plants. Therefore, the progress of extensive decarbonisation will not only depend on the economic viability of storing and sequestering the carbon but also on the availability of CO2 marketplaces, through which the captured CO2 can be sold.
Carbon-cured Cement: This technology injects CO2 captured during cement production to accelerate the curing process and ‘lock in’ CO2 in the end product. Current low-carbon cement technologies can sequester up to 5 per cent of CO2, with the potential of 30 per cent. In fact, 60 million tonnes of CO2 per year are projected to be stored via carbon-cured concrete in 2050.
Alternative Building Materials: In the years to come, alternative building materials could shift demand away from cement. To date, cross-laminated timber (CLT) has attracted the most attention. Made by gluing wooden panels and boards together, CLT is an adequately fire-resistant building material that can reach large dimensions. Its application has recently increased and includes projects in Canada, Japan, and Sweden. Assuming a 10 per cent replacement of concrete—and considering the CO2 captured in the wood has been abated—would reduce the overall cement footprint by 25 per cent, as even more
CO2 is captured than avoided by reducing the cement production.
Recycled Concrete: Use of recycled concrete and demolition waste is the new development especially in Europe with the sources of limestone becoming limited in the future.
The potential reduction of 50 per cent of the CO2 emissions by 2050 depends on the progress of carbon capture and storage systems and technologies, where we have a few start-ups who have come up with very different processes. For example, one start-up uses a lower proportion of limestone in its cement, which results in fewer process and fuel emissions; this company’s process also locks in additional CO2, which is added before the concrete cures. Adding CO2 makes the concrete stronger and reduces the amount of cement needed. Carbon-cured concrete could also use CO2 captured during cement production. Today’s methods could sequester up to 5 per cent of the CO2 produced during production, but newer technologies could sequester 25 to 30 per cent. Products such as carbon-cured concrete, positioned differently, could earn a ‘green premium,’ potentially giving companies an edge among environmentally conscious buyers and greater pricing power.
The Indian cement industry must move steadily to these new innovations, after making the maximum gains from the low hanging fruits. Innovation remains the key word and investments in innovation, including the mindset, for cement is the first step in this journey.

-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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