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2015 Forging Ahead

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The expected higher government spending on infrastructure and a robust growth in housing sector will trigger the demand for cement in 2015, a year that is also expected to be another year of consolidation in the industry.
The Indian cement industry is the second largest market after China accounting for about eight per cent of the total global production. It had a total capacity of over 360 million tonne (mt) as of the financial year 2013-14. The industry grew at a rate in the previous decade, registering a compounded growth of about eight per cent. The housing sector is the biggest demand driver of cement, accounting for about 67 per cent of the total consumption, followed by infrastructure – 13 per cent; commercial construction – 11 per cent; and industrial construction – nine per cent. To meet the rise in demand, cement companies are expected to add 56 mt capacity over the next three years. The cement capacity in India may register a growth of eight per cent by end of next year to 395 mt from the current level of 366 mt. It may increase further to 421 mt by the end of 2017. The country?s per capita consumption stands at around 190 kg.

The market scenario
The cement production remained subdued during FY14 growing by a modest three per cent during April-March 2014 as against 7.7 per cent in the corresponding period of the previous year. The cement demand remained weak primarily due to weak demand from end-user industries. Delays in environmental clearances for industrial and infrastructure projects and unavailability of sand in some states contributed to slow growth. In fact, as against year-to-date growth of three per cent, cement production registered an even lower growth of two per cent during Q3 FY14 and 1.2 per cent in Q4 FY14 which are seasonally strong quarters for the cement industry, as per a recent ICRA report.

Companies are taking steps to optimise their overhead costs, improve efficiency and lower consumption norms. They have increasingly started using pet coke and lignite instead of expensive coal as a source of fuel and utilising waste heat gases to produce power. Steps are also being taken to optimise power consumption norms and reduce the power consumed per tonne of cement. Further, companies are focusing on using higher proportion of additives such as fly ash and cement to bring down their cost of production. As a result, the power and fuel cost as well as raw material cost has seen some easing.

Growth and demand outlook
Highlighting the industry scenario, Arvind Pathak, Chief Executive Officer, Reliance Cement Company, had this to say. ?With cement capacity touching ~390 million tonne and likely demand of 275 million tonne in 2015, there is expected to be a surplus capacity of ~115 million tonne during the year. Industry is projected to operate at a rate of 70-72 per cent of capacity utilisation in 2015.?

On the expected CAGR growth, Pathak says, ?With expected pick up in GDP growth rate and considering a multiplier of 1.2, cement demand is expected to grow at the rate of 7-8 per cent during FY15-16.? On the demand front he observes, ?Demand is mostly expected to come from government-backed projects in 2015. Concretisation of roads, dedicated freight corridors, development of smart cities, metro rail projects, construction of toilets under ?Swacch Bharat Abhiyan? are the major thrust areas the government is going to focus on which will drive cement consumption from 2015 onwards. Further, with new rules on funding for infrastructure projects under 5:25 rule, and revival of many stalled projects, the overall demand is expected to be high.? He adds, ?With easing of rules for FDI in real estate sector and the likely reduction of interest rates, commercial and real estate sector are also likely to drive cement consumption.? According to him, the likely demand mix in 2015 is expected to be housing (60 per cent), infrastructure ( 22 per cent) and commercial (18 per cent).

Vinod Juneja, Managing Director, Binani Group of Industries, ups the growth curve further. According to him, with various projects and expansion plans both by the state and central governments, the cement industry will grow by 10-11 per cent in the coming financial year. The demand will also grow high in the coming years. It is estimated that infrastructure will drive demand in the coming years from airports, highways and railway activities. Juneja adds, ?The National Highways Authority of India (NHAI) has sought to end all its pending issues and litigation regarding land acquisition, cost over-run etc; NHAI and Airports Authority of India (AAI) have got big expansion plans both in metro and non-metro sectors, hence cement market will grow minimum 10-11 per cent.? He further adds, ?The decrease in the housing loan interest rate and the increase in the tenure of the loans repayment will further boost the cement sector leading the cement industry to a sunshine industry.?

VP Sharma, Managing Director & Chief Executive Officer, ABG Cement, confidently avers, ?I am bullish about cement demand going high. The important sectors which will drive the cement demand are infrastructure and housing. The various initiatives taken by the present government, particularly in the areas of concrete roads, railways, ports, smart cities, and low-cost housing will drive the demand. Towards the end of 2015, demand for cement should be close to 8-9 per cent, which will become double-digit by the end of 2015.? Sharma adds, ?The year 2015 will see excess supply of cement to the tune of 50 to 60 million tonne. But consistent increase in demand will help us to absorb excess supplies going forward.?

Sharma cements the arguments, ?From the time the present government came to power, they have emphasised on building the infrastructure, i.e., concrete roads, railways, ports and low-cost housing. This will certainly increase cement demand. Recently, the Minister for Road Transport and Highways and Shipping, Nitin Gadkari quoted that all central road projects will be done by concrete. This would result in increase in cement demand.?

Zeroing on the demand scenario, Ashutosh Rampal, Vice President, Marketing, KJS Cement, Maihar, says, ?The cement demand in FY15-16 will be driven by government spending on public infrastructure, in spite of the newly elected government?s pressing need to curb fiscal deficit. This has been clearly stated policy line. Private enterprise has a low share in nation building and the much touted Public-Private-Partnership (PPP) has not gathered mass, thanks to the economic downturn and policy paralysis of the UPA government. Public infrastructure spending by the government is expected to lead the growth in cement consumption in FY15-16, till the PPP model becomes robust and the private companies start taking interest in the infra projects. Retail housing off take was sluggish last year due to high interest rates and fragile economic stability. This is expected to change for better in FY15-16 due to relaxation of land utilisation norms and easing interest rates. The ambitious NCR-Kandla industrial freight corridor is awaiting rejuvenation by Japanese funding who in turn are treading cautiously due to ambivalence of Indian Babudom. To conclude, the industry will do well subject to the government taking effective steps to rev up the system.?

Highlighting the ground reality, Rampal adds, ?The NDA government has promised government expenditure on building public infrastructure as a means to boost the income generation in the economy. In addition to this, the easing of land acquisition norms for key infrastructure projects and government focus on manufacturing and infra industry is expected to boost the demand scenario. Since no significant new capacity is coming up, the year is expected to be good for cement industry.PPP projects are stuck because of cost escalation and poor availability of long- term low-cost funds. Renegotiation of stalled PPP infra projects, especially those of NHAI and take off of Indo-Japanese NCR-Delhi-Kandla freight corridor require urgent attention to boost the cement and steel consumption across the country.? The demand outlook for FY15 remains relatively more favourable given the new government?s focus on revival of infrastructure and investment spending. The growth in FY15 will also be supported by a low base as cement production grew by merely three per cent in FY14. During April-May 2014, cement production has grown by 7.7 per cent YoY as against 3.9 per cent in the corresponding period last year. Pick-up of real estate and industrial activity, infrastructure projects and overall investment cycle will remain critical for the sector over the near-term.

As per ICRA report, the initiatives announced to promote infrastructure and housing investment in Union Budget are likely to have a positive impact on cement demand. Increased provision under Rural Housing Fund and interest deduction on housing loans will boost urban and rural housing demand and in turn, demand for cement. Further, government measures to promote investment in ports, roads, airports and other infrastructure projects are also likely to support cement demand. Cement companies are also likely to benefit from the increase in long term funding availability for infrastructure projects which is likely to facilitate more investment in these sectors.

2015: A year of further consolidation
According to Sharma, 2015 will be another year of more consolidation in the cement industry. He says, ?The bigger players will look for consolidation as we have seen in 2014 to have better price control. The prices may stabilise towards end of 2015. Our company will work towards increasing the capacity utilisation rather than any capacity addition in the present circumstances. However, based on market scenario, we may look towards end of 2015 for any capacity addition.?

Pathak also is on the same page. According to him, consolidation in cement industry will continue with non-serious and marginal players exiting the market and entry of large multinational cement players. He adds, ?Our current plan of capacity expansion of 10 million tonne is on track (5 million tonne in Maihar, Madhya Pradesh and another 5 million tonne in Yavatmal, Maharashtra). This will take our total installed capacity to 15.5 million tonne. However, immediately in 2015, there is not going to be any new capacity addition.? Pathak further adds, ?With increased focus of the government on infrastructure and real estate development, demand is expected to be better in 2015. This, coupled with slowdown in capacity additions, will enable industry to pass on cost increases and boost profitability.

Says Rampal, ?I clearly see consolidation of industry. The quality players will take over the smaller inefficient and high-cost players with weak cash flows. Ultratech Cement, Shree Cement and Bharat Dalmia Cement will straddle the space of mergers and acquisitions. Allocation of coal blocks and increased capacity utilisation of government undertakings will help reduce the manufacturing costs. FY15-16 will see a fillip in demand and the market prices. This in turn will create enterprise value and bolster balance sheets for cement companies.? He adds, ?We are planning to increase capacity to 5 mtpa shortly by adding another 2.10 mtpa clinkerisation unit at Maihar with forward grinding units in Bihar, Odisha and Uttar Pradesh. By this time, our own railway siding would be functional, thereby helping us in evacuation of cement.?

Pricing pressures
During the past two years the industry witnessed high operating costs, including all major cost heads such as raw materials, energy and freight. The steep depreciation of the rupee and hike in rail freight and diesel prices further aggravated the concerns. Cement manufacturers still continue to be under the pressure of rising input costs. According to ICRA report cement manufacturers witnessed significant increase in freight costs over the past two years, due to increase in freight rates by railways, consistent increase in diesel prices and increased dependence on costlier road transport due to shortage of railway wagons. Apart from this, the prices of key raw materials limestone and gypsum have also increased. Further, increase in domestic coal prices by CIL in May 2013, declining availability of low cost linkage coal have increased power and fuel costs. However, declining international coal and pet coke price have provided some benefits to Indian cement companies; but the extent of this benefit has partly been offset by rupee depreciation.

According to Rampal, cement prices directly depend upon three parameters: the capacity expansion that disturbs the equilibrium of demand-supply in a region; the quality of players; and the difference in variable cost of production of players. He says, ?Firm prices and the capacity utilisation of 85-90 per cent in FY15-16 is expected to stay for next 2-3 years.?

Pathak explains, ?With demand picking up and rate of new capacity additions slowing down, industry would be able to pass on the cost increase to consumers and cement prices are likely to grow in the range of 5-7 per cent in 2015.?

In many regions prices have gone over Rs. 300 per bag. Says Juneja, ?Cement prices have already reached above Rs 300 per bag which includes excise, octroi, sales tax, primary and secondary transportation and handling charges.? Sharma observes, ?There will be pressure on the prices as in the past. However, focus will be to keep the current price stable and increase volumes.?

From the dealers point of view, Rahul Gandhi, Director, Mahaveer Building Material, had this to say. ?Currently, the basic issue is the price, which has gone up drastically in the last couple of months. At the same time, there is no change in sales margins. The government has to introduce some policy initiative by setting a minimum earning margin for the dealer and the margin should be according to the price, if the price is increased, the margin should be revised accordingly. This will help the dealer stay in the business in difficult times. GST will be a good initiative as the anomalies in tax structure will go and it will be uniform.? Ravi Lunawat, Partner, Lunawat Agency, supports the view. According to him, from the government, GST is a major initiative everybody is waiting for. He says, ?Last year when LBT started, it reduced the business of dealers in cities because that time the market was closed for almost two months and the builders bought cement from other markets. Once the GST starts, the price will be uniform everywhere, which will be good for us.?

SR Agarwal, Proprietor, Kirtee Enterprises is also on the same page. ?The Central government?s initiative to introduce GST is a good move for dealers,? he says. He further explains, ?Before LBT, the rate of cement in the rural area was different from city areas, which makes a difference of Rs 10-20 per bag. And now after the authorities upgraded octroi to LBT, the transport system is very fast and the material handling is also very easy. And the material is distributed at the same rate in the rural and urban areas. GST will definitely make the difference as it will benefit the complete value chain of the company, trader, transporter and the end-user. The overall procedure will be transparent.?

According to ICRA report, cement prices in North India had seen a significant hike of Rs 50 per bag during Q4 FY14, driven by temporary supply side disruptions following closure of two cement plants of Binani Cement with a total capacity of 6 mtpa in Rajasthan. The average wholesale cement price in Delhi increased from Rs 275 per bag (50 kg) in January 2014 to Rs 323 per bag in March 2014. Similarly, the average wholesale cement price in Chandigarh increased by Rs 58 per bag between January-March 2014 to Rs 334 per bag. The prices in certain parts of Western India, particularly Gujarat, were also impacted by the aforementioned shutdown. Wholesale prices in Ahmedabad market increased by Rs 47 per bag to Rs 300 per bag between January-March 2014. However, cement prices in these regions came under pressure in April-May 2014, following resumption of cement supply from Binani. Wholesale prices declined by Rs 15-30 per bag in Delhi, Ahmedabad and Chandigarh between April-June 2014. Prices in Mumbai market continued to remain under pressure and declined by Rs 20 per bag during January-May 2014 due to transfer of cement from Southern markets. However, with rise in prices in South in June 2014, the wholesale prices in Mumbai also increased by Rs 5-10 per bag in June 2014. Cement prices in Eastern markets increased by Rs 20-25 per bag during January-June 2014 as cement companies raised prices in the busy season to recover the rising costs.

South India remained the only major region which saw consistent decline in prices by about Rs 10-30 per bag during January-May 2014 due to overcapacity, disruption of production discipline and low demand during April-May 2014. However, cement companies raised prices significantly by about Rs 70 per bag in June 2014 to pass on the rising costs. However, the real estate companies and builders association have protested against such a steep price hike. During April-June 2014, the average price in Delhi was higher by 10 per cent, 22 per cent higher in Ahmedabad, 7 per cent higher in Chandigarh as compared to prices in the corresponding period of the previous year. Prices in Mumbai are flat while those in South and certain parts of East India are lower on YoY basis.

Great expectations
Rampal spells out the expectation from the government. He says, ?NDA government is already sending out message that it wants to kickstart manufacturing to facilitate the growth of labour income. Simplifying land acquisition, labour reforms and simplifying federal taxation through implementation of GST across the nation are the steps industry has already welcomed. Specifically, for the cement industry, the government spending will directly increase the cement demand, followed by take-off of retail housing and PPP infra projects. Government must analyse and find cure as to why infra companies are exiting from the BOT to EPC models. Is the policy environment or the trust missing for the private capital to consider incubating in these projects?? He adds, ?The Railways can facilitate the industry through preferential allocation of cement rakes (at the factory head) and raw material rakes (at the ports).?

According to Pathak, for increasing demand curve post initiation of different initiatives, government should now focus on implementation of its dream projects like 100 smart cities, bullet train and metro rail projects, house for every citizen by 2022, concretisation of national highways, etc, which will drive cement consumption. He further points out, ?To attract investments in railway infrastructure, government need to review the ?Own your Wagon Scheme? and make it more attractive for the industry players. Enough focus should be given to develop inland waterways, which would reduce the burden on existing rail and road network and also bring down the logistics cost.? As far as availability of power is concerned, Pathak adds, ?The government needs to focus on resolving the issues being faced by power sector by bring in clarity on coal auctioning, land acquisition bill, etc. A lot of power projects that are stuck/stalled due to various issues should be revived.?

Tax issues
Speaking on the issues related to different tax and lack of uniform tax structure, Pathak says, ?Cement is one of the highest taxed commodities in India. The total taxes and levies include royalties and import duties on input materials, electricity duties, sales tax, and excise duties account for one-third of the overall price of cement. Taxation rates in India are almost double of China. Government needs to focus on resolving raw materials and logistics issues to help cement sector getting clarity on policies. Clear roadmap for improvement in infrastructure sector is needed to help generating cement consumption in the country. Implementation of GST should start with more clarity on tax structure. The government should also reduce some of the taxes by providing it a status of core infrastructure sector.?

Explains Rampal, ?Out of the market price of a bag of cement 35-40 per cent is taken away by VAT, excise and railway freight (cost of manufacturing and limestone being extra) putting a massive burden on the industry. In spite of being a priority sector for nation building, cement taxation in the country is at par with the prohibitive industries worldwide.? Rampal suggests, ?Reduction in excise duty by 3-4 per cent will be able to sustain the industry longer. Government should study the possibility of subsidising rail freight for food, cement and steel which will directly boost the movement and clear up all logistics bottlenecks in addition to keeping the inflation of essential commodities low.?

Juneja avers, ?Until and unless GST is implemented, there cannot be effective interstate movement due to cascading effect of multiple taxes. We are awaiting the Budget on 28 February 2015.? Sharma mirrors the observation. According to him India is one of the countries where there is higher tax structure in cement sector. Government has to rationalise excise duty, royalty and sales tax to help the sector to grow.

Raw material availability
According to Rampal, raw material availability of coal and gypsum is not a constraint. However he adds, ?The limestone availability is fast becoming a constraint as applications for mining lease for limestone are stuck either at the state level or at the central ministry level due to environmental or social impact assessment issues.

Government must speed these up through e-governance initiatives.? Says Sharma, ?I don?t see much action from the present government in this area; however, cement industry has to improve its raw material inventories, particularly limestone. Moreover, government has to speed up with coal block allotments.?

Sharma further adds, ?With increase in demand, pressure will be on logistics. We are yet to see action from the new government in this area.? As far as the availability of power is concerned, he says, ?Most of the cement plants are self-sufficient in power with captive power plants. We will require continuing import of coal due to the current uncertainties in the domestic coal supply. Cement industry is importing coal also due to favourable coal prices.

However, the industry has to focus more on alternative sources of power from waste heat etc to reduce energy cost.?

Moving forward
Cement demand is closely linked to the overall economic growth, particularly the housing and infrastructure sector. With the Government of India providing a boost to the infrastructure and various housing projects coming up in urban as well as rural areas, the cement sector has enough scope for development in the future. The weakness in the international crude oil prices and other commodities should help bring costs under control and improve profitability of the sector. If inflation comes under control, a likely lowering of interest rates would be a big positive for the cement sector. Despite the current challenges that dent the growth of the industry, the long term drivers for growth remain intact. Higher government spending on infrastructure, robust growth in rural housing and rising per capita incomes are likely to augur well for the cement sector.
Agith G Antony

2015 is expected to be another year of market consolidation. Cement companies expected to add 56 mt capacity over the next three years. The installed capacity may increase to 421 mt by the end of 2017. Demand is expected to grow at a rate of 7-8 per cent during FY15-16. The year 2015 will see excess supply of cement to the tune of 50-60 mt.

Government needs to review the ?Own your Wagon Scheme?.
Develop inland waterways, which would reduce the burden on existing rail and road network.
GST implementation should start with more clarity on tax structure. Government has to speed up with coal block allotments.

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Concrete

JK Cement Crosses 31 MTPA Capacity with Commissioning of Buxar Plant in Bihar

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JK Cement has commissioned a 3 MTPA Grey Cement plant in Buxar, Bihar, taking its total capacity to 31.26 MTPA and placing it among India’s top five grey cement producers. The ₹500 crore investment strengthens the company’s national footprint while supporting Bihar’s infrastructure growth and local economic development.

JK Cement Ltd., one of India’s leading cement manufacturers, has announced the commissioning of its new state-of-the-art Grey Cement plant in Buxar, Bihar, marking a significant milestone in the company’s growth trajectory. With the commissioning of this facility, JK Cement’s total production capacity has increased to 31.26 million tonnes per annum (MTPA), enabling the company to cross the 30 MTPA threshold.

This expansion positions JK Cement among the top five Grey Cement manufacturers in India, strengthening its national footprint and reinforcing its long-term growth strategy.

Commenting on the strategic achievement, Dr Raghavpat Singhania, Managing Director, JK Cement, said, “Crossing 31 MTPA is a significant turning point in JK Cement’s expansion and demonstrates the scale, resilience, and aspirations of our company. In addition to making a significant contribution to Bihar’s development vision, the commissioning of our Buxar plant represents a strategic step towards expanding our national footprint. We are committed to developing top-notch manufacturing capabilities that boost India’s infrastructure development and generate long-term benefits for local communities.”

The Buxar plant has a capacity of 3 MTPA and is spread across 100 acres. Strategically located on the Patna–Buxar highway, the facility enables faster and more efficient distribution across Bihar and adjoining regions. While JK Cement entered the Bihar market last year through supplies from its Prayagraj plant, the Buxar facility will now allow the company to serve the state locally, with deliveries possible within 24 hours across Bihar.

Sharing his views on the expansion, Madhavkrishna Singhania, Joint Managing Director & CEO, JK Cement, said, “JK Cement is now among India’s top five producers of grey cement after the Buxar plant commissioning. Our capacity to serve Bihar locally, more effectively, and on a larger scale is strengthened by this facility. Although we had already entered the Bihar market last year using Prayagraj supplies, local manufacturing now enables us to be nearer to our clients and significantly raise service standards throughout the state. Buxar places us at the center of this chance to promote sustainable growth for both the company and the region in Bihar, a high-growth market with strong infrastructure momentum.”

The new facility represents a strategic step in supporting Bihar’s development vision by ensuring faster access to superior quality cement for infrastructure, housing, and commercial projects. JK Cement has invested approximately ₹500 crore in the project. Construction began in March 2025, and commercial production commenced on January 29, 2026.

In addition to strengthening JK Cement’s regional presence, the Buxar plant is expected to generate significant direct and indirect employment opportunities and attract ancillary industries, thereby contributing to the local economy and the broader industrial ecosystem.

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Economy & Market

From Vision to Action: Fornnax Global Growth Strategy for 2026

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Jignesh Kundaria, Director & CEO, Fornnax Recycling Technology

As 2026 begins, Fornnax is accelerating its global growth through strategic expansion, large-scale export-led installations, and technology-driven innovation across multiple recycling streams. Backed by manufacturing scale-up and a strong people-first culture, the company aims to lead sustainable, high-capacity recycling solutions worldwide.

As 2026 begins, Fornnax stands at a pivotal stage in its growth journey. Over the past few years, the company has built a strong foundation rooted in engineering excellence, innovation, and a firm commitment to sustainable recycling. The focus ahead is clear: to grow faster, stronger, and on a truly global scale.

“Our 2026 strategy is driven by four key priorities,” explains Mr. Jignesh Kundaria, Director & CEO of Fornnax.

First, Global Expansion

We will strengthen our presence in major markets such as Europe, Australia, and the GCC, while continuing to grow across our existing regions. By aligning with local regulations and customer requirements, we aim to establish ourselves as a trusted global partner for advanced recycling solutions.

A major milestone in this journey will be export-led global installations. In 2026, we will commission Europe’s highest-capacity shredding line, reinforcing our leadership in high-capacity recycling solutions.

Second, Product Innovation and Technology Leadership

Innovation remains at the heart of our vision to become a global leader in recycling technology by 2030. Our focus is on developing solutions that are state-of-the-art, economical, efficient, reliable, and environmentally responsible.

Building on a decade-long legacy in tyre recycling, we have expanded our portfolio into new recycling applications, including municipal solid waste (MSW), e-waste, cable, and aluminium recycling. This diversification has already created strong momentum across the industry, marked by key milestones scheduled to become operational this year, such as:

  • Installation of India’s largest e-waste and cable recycling line.
  • Commissioning of a high-capacity MSW RDF recycling line.

“Sustainable growth must be scalable and profitable,” emphasizes Mr. Kundaria. In 2026, Fornnax will complete Phase One of our capacity expansion by establishing the world’s largest shredding equipment manufacturing facility. This 23-acre manufacturing unit, scheduled for completion in July 2026, will significantly enhance our production capability and global delivery capacity.

Alongside this, we will continue to improve efficiency across manufacturing, supply chain, and service operations, while strengthening our service network across India, Australia, and Europe to ensure faster and more reliable customer support.

Finally: People and Culture

“People remain the foundation of Fornnax’s success. We will continue to invest in talent, leadership development, and a culture built on ownership, collaboration, and continuous improvement,” states Mr. Kundaria.

With a strong commitment to sustainability in everything we do, our ambition is not only to grow our business, but also to actively support the circular economy and contribute to a cleaner, more sustainable future.

Guided by a shared vision and disciplined execution, 2026 is set to be a defining year for us, driven by innovation across diverse recycling applications, large-scale global installations, and manufacturing excellence.

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Concrete

Why Cement Needs CCUS

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Cement’s deep decarbonisation cannot be achieved through efficiency and fuel switching alone, making CCUS essential to address unavoidable process emissions from calcination. ICR explores if with the right mix of policy support, shared infrastructure, and phased scale-up from pilots to clusters, CCUS can enable India’s cement industry to align growth with its net-zero ambitions.

Cement underpins modern development—from housing and transport to renewable energy infrastructure—but it is also one of the world’s most carbon-intensive materials, with global production of around 4 billion tonnes per year accounting for 7 to 8 per cent of global CO2 emissions, according to the GCCA. What makes cement uniquely hard to abate is that 60 to 65 per cent of its emissions arise from limestone calcination, a chemical process that releases CO2 irrespective of the energy source used; the IPCC Sixth Assessment Report (AR6) therefore classifies cement as a hard-to-abate sector, noting that even fully renewable-powered kilns would continue to emit significant process emissions. While the industry has achieved substantial reductions over the past two decades through energy efficiency, alternative fuels and clinker substitution using fly ash, slag, and calcined clays, studies including the IEA Net Zero Roadmap and GCCA decarbonisation pathways show these levers can deliver only 50 to 60 per cent emissions reduction before reaching technical and material limits, leaving Carbon Capture, Utilisation and Storage (CCUS) as the only scalable and durable option to address remaining calcination emissions—an intervention the IPCC estimates will deliver nearly two-thirds of cumulative cement-sector emission reductions globally by mid-century, making CCUS a central pillar of any credible net-zero cement pathway.

Process emissions vs energy emissions
Cement’s carbon footprint is distinct from many other industries because it stems from two sources: energy emissions and process emissions. Energy emissions arise from burning fuels to heat kilns to around 1,450°C and account for roughly 35 to 40 per cent of total cement CO2 emissions, according to the International Energy Agency (IEA). These can be progressively reduced through efficiency improvements, alternative fuels such as biomass and RDF, and electrification supported by renewable power. Over the past two decades, such measures have delivered measurable gains, with global average thermal energy intensity in cement production falling by nearly 20 per cent since 2000, as reported by the IEA and GCCA.
The larger and more intractable challenge lies in process emissions, which make up approximately 60 per cent to 65 per cent of cement’s total CO2 output. These emissions are released during calcination, when limestone (CaCO3) is converted into lime (CaO), inherently emitting CO2 regardless of fuel choice or energy efficiency—a reality underscored by the IPCC Sixth Assessment Report (AR6). Even aggressive clinker substitution using fly ash, slag, or calcined clays is constrained by material availability and performance requirements, typically delivering 20 to 40 per cent emissions reduction at best, as outlined in the GCCA–TERI India Cement Roadmap and IEA Net Zero Scenario. This structural split explains why cement is classified as a hard-to-abate sector and why incremental improvements alone are insufficient; as energy emissions decline, process emissions will dominate, making Carbon Capture, Utilisation and Storage (CCUS) a critical intervention to intercept residual CO2 and keep the sector’s net-zero ambitions within reach.

Where CCUS stands today
Globally, CCUS in cement is moving from concept to early industrial reality, led by Europe and North America, with the IEA noting that cement accounts for nearly 40 per cent of planned CCUS projects in heavy industry, reflecting limited alternatives for deep decarbonisation; a flagship example is Heidelberg Materials’ Brevik CCS project in Norway, commissioned in 2025, designed to capture about 400,000 tonnes of CO2 annually—nearly half the plant’s emissions—with permanent offshore storage via the Northern Lights infrastructure (Reuters, Heidelberg Materials), alongside progress at projects in the UK, Belgium, and the US such as Padeswood, Lixhe (LEILAC), and Ste. Genevieve, all enabled by strong policy support, public funding, and shared transport-and-storage infrastructure.
These experiences show that CCUS scales fastest when policy support, infrastructure availability, and risk-sharing mechanisms align, with Europe bridging the viability gap through EU ETS allowances, Innovation Fund grants, and CO2 hubs despite capture costs remaining high at US$ 80-150 per tonne of CO2 (IEA, GCCA); India, by contrast, is at an early readiness stage but gaining momentum through five cement-sector CCU testbeds launched by the Department of Science and Technology (DST) under academia–industry public–private partnerships involving IITs and producers such as JSW Cement, Dalmia Cement, and JK Cement, targeting 1-2 tonnes of CO2 per day to validate performance under Indian conditions (ETInfra, DST), with the GCCA–TERI India Roadmap identifying the current phase as a foundation-building decade essential for achieving net-zero by 2070.
Amit Banka, Founder and CEO, WeNaturalists, says “Carbon literacy means more than understanding that CO2 harms the climate. It means cement professionals grasping why their specific plant’s emissions profile matters, how different CCUS technologies trade off between energy consumption and capture rates, where utilisation opportunities align with their operational reality, and what governance frameworks ensure verified, permanent carbon sequestration. Cement manufacturing contributes approximately 8 per cent of global carbon emissions. Addressing this requires professionals who understand CCUS deeply enough to make capital decisions, troubleshoot implementation challenges, and convince boards to invest substantial capital.”

Technology pathways for cement
Cement CCUS encompasses a range of technologies, from conventional post-combustion solvent-based systems to process-integrated solutions that directly target calcination, each with different energy requirements, retrofit complexity, and cost profiles. The most mature option remains amine-based post-combustion capture, already deployed at industrial scale and favoured for early cement projects because it can be retrofitted to existing flue-gas streams; however, capture costs typically range from US$ 60-120 per tonne of CO2, depending on CO2 concentration, plant layout, and energy integration.
Lovish Ahuja, Chief Sustainability Officer, Dalmia Cement (Bharat), says, “CCUS in Indian cement can be viewed through two complementary lenses. If technological innovation, enabling policies, and societal acceptance fail to translate ambition into action, CCUS risks becoming a significant and unavoidable compliance cost for hard-to-abate sectors such as cement, steel, and aluminium. However, if global commitments under the Paris Agreement and national targets—most notably India’s Net Zero 2070 pledge—are implemented at scale through sustained policy and industry action, CCUS shifts from a future liability to a strategic opportunity. In that scenario, it becomes a platform for technological leadership, long-term competitiveness, and systemic decarbonisation rather than merely a regulatory burden.”
“Accelerating CCUS adoption cannot hinge on a single policy lever; it demands a coordinated ecosystem approach. This includes mission-mode governance, alignment across ministries, and a mix of enabling instruments such as viability gap funding, concessional and ESG-linked finance, tax incentives, and support for R&D, infrastructure, and access to geological storage. Importantly, while cement is largely a regional commodity with limited exportability due to its low value-to-weight ratio, CCUS innovation itself can become a globally competitive export. By developing, piloting, and scaling cost-effective CCUS solutions domestically, India can not only decarbonise its own cement industry but also position itself as a supplier of affordable CCUS technologies and services to cement markets worldwide,” he adds.
Process-centric approaches seek to reduce the energy penalty associated with solvent regeneration by altering where and how CO2 is separated. Technologies such as LEILAC/Calix, which uses indirect calcination to produce a high-purity CO2 stream, are scaling toward a ~100,000 tCO2 per year demonstrator (LEILAC-2) following successful pilots, while calcium looping leverages limestone chemistry to achieve theoretical capture efficiencies above 90 per cent, albeit still at pilot and demonstration stages requiring careful integration. Other emerging routes—including oxy-fuel combustion, membrane separation, solid sorbents, and cryogenic or hybrid systems—offer varying trade-offs between purity, energy use, and retrofit complexity; taken together, recent studies suggest that no single technology fits all plants, making a multi-technology, site-specific approach the most realistic pathway for scaling CCUS across the cement sector.
Yash Agarwal, Co-Founder, Carbonetics Carbon Capture, says, “We are fully focused on CCUS, and for us, a running plant is a profitable plant. What we have done is created digital twins that allow operators to simulate and resolve specific problems in record time. In a conventional setup, when an issue arises, plants often have to shut down operations and bring in expert consultants. What we offer instead is on-the-fly consulting. As soon as a problem is detected, the system automatically provides a set of potential solutions that can be tested on a running plant. This approach ensures that plant shutdowns are avoided and production is not impacted.”

The economics of CCUS
Carbon Capture, Utilisation and Storage (CCUS) remains one of the toughest economic hurdles in cement decarbonisation, with the IEA estimating capture costs of US$ 80-150 per tonne of CO2, and full-system costs raising cement production by US$ 30-60 per tonne, potentially increasing prices by 20 to 40 per cent without policy support—an untenable burden for a low-margin, price-sensitive industry like India’s.
Global experience shows CCUS advances beyond pilots only when the viability gap is bridged through strong policy mechanisms such as EU ETS allowances, Innovation Fund grants, and carbon Contracts for Difference (CfDs), yet even in Europe few projects have reached final investment decision (GCCA); India’s lack of a dedicated CCUS financing framework leaves projects reliant on R&D grants and balance sheets, reinforcing the IEA Net Zero Roadmap conclusion that carbon markets, green public procurement, and viability gap funding are essential to spread costs across producers, policymakers, and end users and prevent CCUS from remaining confined to demonstrations well into the 2030s.

Utilisation or storage
Carbon utilisation pathways are often the first entry point for CCUS in cement because they offer near-term revenue potential and lower infrastructure complexity. The International Energy Agency (IEA) estimates that current utilisation routes—such as concrete curing, mineralisation into aggregates, precipitated calcium carbonate (PCC), and limited chemical conversion—can realistically absorb only 5 per cent to 10 per cent of captured CO2 at a typical cement plant. In India, utilisation is particularly attractive for early pilots as it avoids the immediate need for pipelines, injection wells, and long-term liability frameworks. Accordingly, Department of Science and Technology (DST)–supported cement CCU testbeds are already demonstrating mineralisation and CO2-cured concrete applications at 1–2 tonnes of CO2 per day, validating performance, durability, and operability under Indian conditions.
However, utilisation faces hard limits of scale and permanence. India’s cement sector emits over 200 million tonnes of CO2 annually (GCCA), far exceeding the absorptive capacity of domestic utilisation markets, while many pathways—especially fuels and chemicals—are energy-intensive and dependent on costly renewable power and green hydrogen. The IPCC Sixth Assessment Report (AR6) cautions that most CCU routes do not guarantee permanent storage unless CO2 is mineralised or locked into long-lived materials, making geological storage indispensable for deep decarbonisation. India has credible storage potential in deep saline aquifers, depleted oil and gas fields, and basalt formations such as the Deccan Traps (NITI Aayog, IEA), and hub-based models—where multiple plants share transport and storage infrastructure—can reduce costs and improve bankability, as seen in Norway’s Northern Lights project. The pragmatic pathway for India is therefore a dual-track approach: utilise CO2 where it is economical and store it where permanence and scale are unavoidable, enabling early learning while building the backbone for net-zero cement.

Policy, infrastructure and clusters
Scaling CCUS in the cement sector hinges on policy certainty, shared infrastructure, and coordinated cluster development, rather than isolated plant-level action. The IEA notes that over 70 per cent of advanced industrial CCUS projects globally rely on strong government intervention—through carbon pricing, capital grants, tax credits, and long-term offtake guarantees—with Europe’s EU ETS, Innovation Fund, and carbon Contracts for Difference (CfDs) proving decisive in advancing projects like Brevik CCS. In contrast, India lacks a dedicated CCUS policy framework, rendering capture costs of USD 80–150 per tonne of CO2 economically prohibitive without state support (IEA, GCCA), a gap the GCCA–TERI India Cement Roadmap highlights can be bridged through carbon markets, viability gap funding, and green public procurement.
Milan R Trivedi, Vice President, Shree Digvijay Cement, says, “CCUS represents both an unavoidable near-term compliance cost and a long-term strategic opportunity for Indian cement producers. While current capture costs of US$ 100-150 per tonne of CO2 strain margins and necessitate upfront retrofit investments driven by emerging mandates and NDCs, effective policy support—particularly a robust, long-term carbon pricing mechanism with tradable credits under frameworks like India’s Carbon Credit Trading Scheme (CCTS)—can de-risk capital deployment and convert CCUS into a competitive advantage. With such enablers in place, CCUS can unlock 10 per cent to 20 per cent green price premiums, strengthen ESG positioning, and allow Indian cement to compete in global low-carbon markets under regimes such as the EU CBAM, North America’s buy-clean policies, and Middle Eastern green procurement, transforming compliance into export-led leadership.”
Equally critical is cluster-based CO2 transport and storage infrastructure, which can reduce unit costs by 30 to 50 per cent compared to standalone projects (IEA, Clean Energy Ministerial); recognising this, the DST has launched five CCU testbeds under academia–industry public–private partnerships, while NITI Aayog works toward a national CCUS mission focused on hubs and regional planning. Global precedents—from Norway’s Northern Lights to the UK’s HyNet and East Coast clusters—demonstrate that CCUS scales fastest when governments plan infrastructure at a regional level, making cluster-led development, backed by early public investment, the decisive enabler for India to move CCUS from isolated pilots to a scalable industrial solution.
Paul Baruya, Director of Strategy and Sustainability, FutureCoal, says, “Cement is a foundational material with a fundamental climate challenge: process emissions that cannot be eliminated through clean energy alone. The IPCC is clear that in the absence of a near-term replacement of Portland cement chemistry, CCS is essential to address the majority of clinker-related emissions. With global cement production at around 4 gigatonnes (Gt) and still growing, cement decarbonisation is not a niche undertaking, it is a large-scale industrial transition.”

From pilots to practice
Moving CCUS in cement from pilots to practice requires a sequenced roadmap aligning technology maturity, infrastructure development, and policy support: the IEA estimates that achieving net zero will require CCUS to scale from less than 1 Mt of CO2 captured today to over 1.2 Gt annually by 2050, while the GCCA Net Zero Roadmap projects CCUS contributing 30 per cent to 40 per cent of total cement-sector emissions reductions by mid-century, alongside efficiency, alternative fuels, and clinker substitution.
MM Rathi, Joint President – Power Plants, Shree Cement, says, “The Indian cement sector is currently at a pilot to early demonstration stage of CCUS readiness. A few companies have initiated small-scale pilots focused on capturing CO2 from kiln flue gases and exploring utilisation routes such as mineralisation and concrete curing. CCUS has not yet reached commercial integration due to high capture costs (US$ 80-150 per tonne of CO2), lack of transport and storage infrastructure, limited access to storage sites, and absence of long-term policy incentives. While Europe and North America have begun early commercial deployment, large-scale CCUS adoption in India is more realistically expected post-2035, subject to enabling infrastructure and policy frameworks.”
Early pilots—such as India’s DST-backed CCU testbeds and Europe’s first commercial-scale plants—serve as learning platforms to validate integration, costs, and operational reliability, but large-scale deployment will depend on cluster-based scale-up, as emphasised by the IPCC AR6, which highlights the need for early CO2 transport and storage planning to avoid long-term emissions lock-in. For India, the GCCA–TERI India Roadmap identifies CCUS as indispensable for achieving net-zero by 2070, following a pragmatic pathway: pilot today to build confidence, cluster in the 2030s to reduce costs, and institutionalise CCUS by mid-century so that low-carbon cement becomes the default, not a niche, in the country’s infrastructure growth.

Conclusion
Cement will remain indispensable to India’s development, but its long-term viability hinges on addressing its hardest emissions challenge—process CO2 from calcination—which efficiency gains, alternative fuels, and clinker substitution alone cannot eliminate; global evidence from the IPCC, IEA, and GCCA confirms that Carbon Capture, Utilisation and Storage (CCUS) is the only scalable pathway capable of delivering the depth of reduction required for net zero. With early commercial projects emerging in Europe and structured pilots underway in India, CCUS has moved beyond theory into a decisive decade where learning, localisation, and integration will shape outcomes; however, success will depend less on technology availability and more on collective execution, including coordinated policy frameworks, shared transport and storage infrastructure, robust carbon markets, and carbon-literate capabilities.
For India, a deliberate transition from pilots to practice—anchored in cluster-based deployment, supported by public–private partnerships, and aligned with national development and climate goals—can transform CCUS from a high-cost intervention into a mainstream industrial solution, enabling the cement sector to keep building the nation while sharply reducing its climate footprint.

– Kanika Mathur

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