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Union Budget 2020-21 | Remedy fails to match malady

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As the Union Budget 2020-21 failed to enthuse different segments of investors and consumers, the question that remains is: How long to wait for economic revival?

The sum and substance of reactions to the Union Budget 2020-21 presented by the Finance Minister Nirmala Sitharaman was that it has belied the expectations that there will be some "big bang" measures to stimulate demand and investments in the sagging economy, and that this was a missed opportunity to push some major economic reforms.

This year’s budget has given thrust to agriculture, irrigation and rural development, infrastructure, skill development and the beleaguered financial sector. There were some measures to support MSME sector and affordable housing too. The idea was to touch upon every aspect that could help revive the economy, with an expectation that at least a few of them will click. However, those ideas were not backed by sufficient resources, ultimately due to existing funds crunch. Though the Finance minister claimed to have announced some personal tax concessions, they are unlikely to make big difference in their disposable incomes and overall consumer demand.

The budget has also proposed to tap global sovereign funds to finance infrastructure projects, mainly due to drying up of long term domestic sources and fiscal constraints. Taking a leaf from the US president Donald Trump, the budget has hiked customs duties to protect the domestic industry from external competition. "There is some support to growth, but nothing substantial in the short term. However, the government is still eyeing the long term and has, therefore, pushed capex (the government’s capital expenditure on infra etc.). The multiplier impact of this will be positive but lagged,"said leading rating firm Crisil, in its report on budget.

The economists and analysts argued for employing all means, including deviating from fiscal roadmap in the short term, to pump prime the economic activity, but that was not to be. Tough increasing the fiscal deficit target by 0.5 per cent to 3.5 per cent deviating from its roadmap, a recent study by former Economic Advisor to the Finance Ministry Dr Arvind Subramanian, estimates the fiscal deficit figure at 5.5 per cent, after including deals kept out of government accounting.

Recently, referring to such off-balance sheet expenses resorted to by the government, its auditor, Comptroller and Auditor General of India (CAG), advised the government to make thorough disclosure on such liabilities made by the government and public enterprises to the parliament, to impart more sanctity to its accounting practices.

The government had been in denial mode of economic slowdown for some time, the latest statistics baring the ominous state of the economy prove that it hs come to terms with the reality.

Infra push
Infrastructure push given by the budget is expected to provide support to Cement consumption, albeit not in a big way. "The demand for the commodity (cement) will pick up due to infrastructure, housing and rural development related announcements," said CARE Ratings in its report, while terming it a "Positive" impact of the budget.

Adding 100 more airports by 2024, Rs 1.7 lakh crore allocation for transport infrastructure in 2020-21, development of five new smart cities and continuation of incentives to affordable housing are some of the new proposals in the budget. In the previous budgets the government has already announced its grand infrastructure plans National Infrastructure Pipeline & Accelerated Development of Highways and increased focus on inland water ways.

However, Crisil has given "thumbs down"on the sector citing falling allocations for the sector in the coming fiscal and reduction in off-budget allocations. "For the first time in years, overall infrastructure capex has fallen to Rs 4.7 lakh crore for fiscal 2021 from Rs 5.1 lakh crore in fiscal 2020 RE (revised estimates). Moreover, a 16 per cent reduction in IEBR (Internal and Extra Budgetary Resources) implies a higher burden on budgetary support and strain on government finances. Lower spend on infrastructure would also lower chances of revival in allied sectors, particularly steel and cement."

The past implementation pace on the grand plans the government had announced in the past like National Infrastructure Pipeline and Accelerated Development of Highways, on the other hand, have nothing to boast about. The national infrastructure pipeline of Rs 103 lakh crore over fiscal 2020-25 includes investments in core and allied infrastructure sectors. Excluding allied sectors such as industrial, digital, and social infrastructure, the annual core infrastructure investment amounts to Rs 15 lakh crore, or Rs 90 lakh crore over the five-year period."Of this, Rs 4.7 lakh crore would come from the Centre and Rs 2.6 lakh crore from states, leaving ~52% to the private sector. However, considering the limited number of private players and low risk-appetite of banks, private participation is a key monitorable in achieving these targets,"Crisil added.

Allocation for railways has increased by a meagre three per cent to Rs 1.6 lakh crore. "But this falls way short of the Rs 3.8 lakh crore annual investment envisaged as part of Rs 50 lakh crore investment over fiscals 2018-30. A capex of Rs 6 lakh crore was incurred between fiscals 2016 and 2020, missing the Rs 8.5 lakh crore target set for this period," Crisil pointed out.

However, CARE Ratings billed the budget impact on railways as "positive", stating, "Stable Budget for Railways with similar capital expenditure allocation and opening up of private investment for railway infrastructure creation."Setting up large solar power capacity alongside rail track to optimise electrification cost and railway electrification of 27000 km track are also positives for the sector.

The government, in August 2014, had opened up few activities (comprising suburban corridor, high speed train project, railway electrification, passenger terminals etc.) of Indian Railway for FDI and the budget re-emphasises Government focus on same. The capital outlay allocated towards the Roads and Highway sector is Rs 0.77 lakh crore. "The allocation is not in lines with the NIP where the centre is involved in providing 25 per cent of the investment,"says CARE Ratings. The budget also proposed to monetise at least 12 lots of highway bundles of over 6,000 Km before 2024, but CARE Ratings says the timely fructification of this proposal holds the key for the sector.

Though Bullet Train project figured again in the budget, it has been a laggard in implementation. While it is envisaged to operate 15 passenger trains and re-development of four stations on PPP basis, the low rate of success in the past does not inspire confidence.

In line with the budget thrust to rural infrastructure, Prime Minister Gram Sadak Yojana (PMGSY) allocations were up 39 per cent to 19,000 crore, even as achievement ratio has fallen by 74 per cent in 2019-20 from 94 per cent in 2016-17, making the budgeted target for fiscal 2021 aggressive. Moreover, rural road construction targets over the next five years under PMGSY III are lower at 125,000 km, compared with 218,000 km constructed over the past five years.

Vimal Kejriwal, MD & CEO of KEC International says, "The budget’s infra focus is expected to provide a significant fillip to KEC. Allocation towards power and renewable energy, and transport infrastructure, upgradation of stations and developing solar in railways, setting up of 100 new airports, 5 new Smart cities and linking one lakh gram panchayats with BharatNet augurs well for our businesses."

CRISIL Research’s analysis of 106 airports already awarded under UDAN reveals that 62 of these remain non-operational due to lack of basic airport infrastructure. An estimated capex of Rs 4,500-5,000 crore is needed for their revival. Thus, plan for 100 more airports would be achieved only with a lag.

Overall, tax exemptions for sovereign funds to increase foreign investor participation across infrastructure sectors is a positive with investments already visible in roads, power and airports.

Power sector too has got some nudge in the budget. Sabyasachi Majumdar, Senior Vice President & Group Head, Corporate Ratings, ICRA Ltd., says, "Shutting down of old thermal power plants will shift generation to newer generation thermal projects and thus provide a moderate boost to their plant load factors (PLF). Abolition of dividend distribution tax and lower tax rates will encourage fresh investments in the power sector, especially renewable energy and transmission sectors."

Housing
Budgetary allocation for Pradhan Mantri Awas Yojana (PMAY) at Rs 27,500 crore is up by 9 per cent over the last fiscal’s RE. PMAY-Urban has an overall target of constructing 1.12 crore houses by 2022. Of these, 1.03 crore houses have been sanctioned as of January 2020. PMAY-Rural has an overall target of 2.95 crore, of which about 0.9 crore units stand completed as of December 2019.

From the affordable housing buyer’s point of view, the additional deduction of up to Rs 1.5 lakh for interest paid on loans taken has now been extended till March 31, 2021.

Hardik Agrawal, CEO of Radha Madhav Developers says, "This budget stimulates the supply of affordable houses a tax holiday is provided on the profits earned by developers of affordable housing project approved by 31st March, 2020. Even in order to minimize suffering in real-estate transactions and provide relief to the sector, FM proposed to increase the limit of transaction from 5% to 10% (of deviation from circle price for tax scrutiny). Overall this was a consoling budget."

Malady & remedy
What is it that made this budget special? It has come in the backdrop of growth deceleration for six consecutive quarters driven by low growth in consumption and investment. The burden of two failed budgets presented in 2019 – before and after the general elections – were also weighing on the Finance Minister. Pre-poll sops were targeted towards the poor and farmers, while the post-poll budget targeted at the companies and businesses.

A drop in private consumption growth played a big role in bringing down GDP growth to an 11-year low. Private consumption growth slowed to 5.8 per cent in fiscal 2020, from 7.2 per cent in fiscal 2019. A dent to incomes, declining household savings ratio and higher household leverage have kept the consumer’s risk aversion high.

Crisil in its analysis of demand side impact of the budget, projected that some support to rural demand was expected from higher allocation to schemes like PMGSY and PMAY, which will augment incomes. "PM Kisan spending for fiscal 2021 has been maintained at the previous fiscal’s budgetary level, but the focus should be on ensuring that part of the amount does not remain unspent," Crisil suggested. Investment growth dropped to one per cent in fiscal 2020 from 9.8 per cent in fiscal 2019. While private investments have been weak, the government’s ability to fund capex also remains constrained. The budget focus on infrastructure spending will support investment to an extent as central PSU investments are projected to decline, says Crisil. However, the rating agency did not exude the same kind of confidence in growth of private investments during in the next fiscal.

Government consumption spending, mostly on the social sector schemes, supported growth in fiscal 2020. "The government has continued to focus on social sector schemes (including those that augment rural incomes, such as PMGSY, PMAY, NREGA and PM Kisan)," Crisil added.

The budget’s support to MSMEs is a "mild positive" for exports going ahead, says Crisil. Decelerating global growth, falling trade intensity, and uncertainties from the US-China trade war are hurting India’s exports. India’s exports is estimated to fall 2 per cent in fiscal 2020, compared with a growth of 12 per cent in fiscal 2019.

However, the budget is a mixed bag for the current problem in the financial sector. While bringing some relief to the beleaguered non-banking finance companies (NBFCs) by expanding scope for recovery of their bad loans is positive, seeking to remove exemptions in personal income-tax is expected to reduce savings and insurance premiums. However, increasing the bank deposit insurance coverage from Rs one lakh to Rs 5 lakh is expected to increase the confidence of bank depositors, which touched its ebb with the recent failure of co-operative banks.

Worst is not closer than it appears
For cement industry to thrive the overall economy has to be robust. The budget has pulled some levers feebly, that may not be enough to spur the economic growth pace. When private sector is not forthcoming to make investment, it is incumbent on the government and the Reserve Bank of India (RBI) to take steps to revive the economy. Even as RBI had cut the repo rate cumulatively by 135 basis points (bps) through calendar 2019, banks have cut lending rates only by just 40-50 bps.

Crisil says, "In the absence of growth kickers, growth pick-up in fiscal 2021 is expected to be largely led by the base effect and supported by somewhat better farm income (led by a good rabi crop) and the delayed impact of monetary easing. Critical to this forecast is the assumption of a normal monsoon in calendar 2020 and benign global crude oil prices."

Kapil Gupta of Edelweiss Research says, "Overall, from a business cycle standpoint, aggregate fiscal push is missing. We think, given weak demand, consolidation could have waited. Thus, the economy, at best, will see a modest bounce aided by liquidity easing, normalisation in farm cash flows amid rising food inflation, and stabilisation in exports. But the virtuous economic cycle may still be distant."

This kind of consensus among analysts leave us with the question: How long we have to wait to see economic revival?

Infrastructure in Budget

  • 100 more airports to be developed by 2024 to support UDAAN Scheme
  • Rs 1.7 lakh crore allocated towards transport infrastructure
  • Development of 5 new smart cities
  • Further incentivising and boosting affordable housing
  • Increased focus on inland water ways
  • Allowing sovereign funds to invest in infrastructure 15 new passenger trains through PPP route

    Past announcements continued:

  • Grand plans announced in the past: National Infrastructure Pipeline (NIP) & Accelerated Development of Highways
  • Provision of Rs. 22,000 cr already provided to support the NIP, to cater to equity support to infra finance companies like IIFCL and a subsidiary of NIIF
  • Bullet train project between Mumbai and Ahmedabad
  • Taxation Measures
    For corporates/ cooperative societies

  • Concessional tax rate for cooperative societies proposed (from 30% to 22%)
  • Concessional tax rate of 15% to new domestic companies extended to electricity generation companies
  • Dividend distribution tax removed; dividend will now be taxed in the hands of individuals
  • Tax concession for sovereign wealth funds of foreign governments

  • – BS SRINIVASALU REDDY

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    Concrete

    Fornnax Unveils the World’s Largest NPD and Demo Centre to Accelerate Global Recycling Innovation

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    A 12-acre innovation campus enables Fornnax to design, test and validate high-performance recycling solutions at global standards in record time.

    Fornnax has launched one of the world’s largest New Product Development (NPD) centres and demo plants, spanning more than 12 acres, marking a major step toward its vision of becoming a global recycling technology leader by 2030. Designed to accelerate real-world innovation, the facility will enable faster product design cycles, large-scale performance validation, and more reliable equipment for high-demand recycling applications.

    At the core of the new campus is a live demo plant engineered to support application-specific testing. Fornnax will use this facility to upgrade its entire line of shredders and granulators—enhancing capacity, improving energy efficiency, and reducing downtime. With controlled test environments, machines can be validated for 3,000 to 15,000 hours of operation, ensuring real-world durability and high availability of 18–20 hours per day. This approach gives customers proven performance data before deployment.

    “Innovation in product development is the key to becoming a global leader,” said Jignesh Kundariya, Director and CEO of Fornnax. “With this facility, we can design, test and validate new technologies in 6–8 months, compared to 4–5 years in a customer’s plant. Every machine will undergo rigorous Engineering Build (EB) and Manufacturing Build (MB) testing in line with international standards.”

    Engineering Excellence Powered by Gate Review Methodology

    Fornnax’s NPD framework follows a structured Gate Review Process, ensuring precision and discipline at every step. Projects begin with market research and ideation led by Sales and Marketing, followed by strategic review from the Leadership Team. Detailed engineering is then developed by the Design Team and evaluated by Manufacturing, Service and Safety before approval. A functional prototype is built and tested for 6–8 months, after which the design is optimised for mass production and commercial rollout.

    Open-Door Customer Demonstration and Material Testing

    The facility features an open-door demonstration model, allowing customers to bring their actual materials and test multiple machines under varied operating conditions. Clients can evaluate performance parameters, compare configurations and make informed purchasing decisions without operational risk.

    The centre will also advance research into emerging sectors including E-waste, cables, lithium-ion batteries and niche heterogeneous waste streams. Highly qualified engineering and R&D teams will conduct feasibility studies and performance analysis to develop customised solutions for unfamiliar or challenging materials. This capability reinforces Fornnax’s reputation as a solution-oriented technology provider capable of solving real recycling problems.

    Developing Global Recycling Talent

    Beyond technology, the facility also houses a comprehensive OEM training centre. It will prepare operators and maintenance technicians for real-world plant conditions. Trainees will gain hands-on experience in assembly, disassembly and grinding operations before deployment at customer sites. Post-training, they will serve as skilled support professionals for Fornnax installations. The company will also deliver corporate training programs for international and domestic clients to enable optimal operation, swift troubleshooting and high-availability performance.

    A Roadmap to Capture Global Demand

    Fornnax plans to scale its offerings in response to high-growth verticals including Tyre recycling, Municipal Solid Waste (MSW), E-waste, Cable and Aluminium recycling. The company is also preparing solutions for new opportunities such as Auto Shredder Residue (ASR) and Lithium-Ion Battery recovery. With research, training, validation and customer engagement housed under one roof, Fornnax is laying the foundation for the next generation of recycling technologies.

    “Our goal is to empower customers with clarity and confidence before they invest,” added Kundariya. “This facility allows them to test their own materials, compare equipment and see real performance. It’s not just about selling machines—it’s about building trust through transparency and delivering solutions that work.”

    With this milestone, Fornnax reinforces its long-term commitment to enabling industries worldwide with proven, future-ready recycling solutions rooted in innovation, engineering discipline and customer collaboration.

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    Concrete

    Balancing Rapid Economic Growth and Climate Action

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    Dr Yogendra Kanitkar, VP R&D, and Dr Shirish Kumar Sharma, Assistant Manager R&D, Pi Green Innovations, look at India’s cement industry as it stands at the crossroads of infrastructure expansion and urgent decarbonisation.

    The cement industry plays an indispensable role in India’s infrastructure development and economic growth. As the world’s second-largest cement producer after China, India accounts for more than 8 per cent of global cement production, with an output of around 418 million tonnes in 2023–24. It contributes roughly 11 per cent to the input costs of the construction sector, sustains over one million direct jobs, and generates an estimated 20,000 additional downstream jobs for every million tonnes produced. This scale makes cement a critical backbone of the nation’s development. Yet, this vitality comes with a steep environmental price, as cement production contributes nearly 7 per cent of India’s total carbon dioxide (CO2) emissions.
    On a global scale, the sector accounts for 8 per cent of anthropogenic CO2 emissions, a figure that underscores the urgency of balancing rapid growth with climate responsibility. A unique challenge lies in the dual nature of cement-related emissions: about 60 per cent stem from calcination of limestone in kilns, while the remaining 40 per cent arise from the combustion of fossil fuels to generate the extreme heat of 1,450°C required for clinker production (TERI 2023; GCCA).
    This dilemma is compounded by India’s relatively low per capita consumption of cement at about 300kg per year, compared to the global average of 540kg. The data reveals substantial growth potential as India continues to urbanise and industrialise, yet this projected rise in consumption will inevitably add to greenhouse gas emissions unless urgent measures are taken. The sector is also uniquely constrained by being a high-volume, low-margin business with high capital intensity, leaving limited room to absorb additional costs for decarbonisation technologies.
    India has nonetheless made notable progress in improving the carbon efficiency of its cement industry. Between 1996 and 2010, the sector reduced its emissions intensity from 1.12 tonnes of CO2 per ton of cement to 0.719 tonnes—making it one of the most energy-efficient globally. Today, Indian cement plants reach thermal efficiency levels of around 725 kcal/kg of clinker and electrical consumption near 75 kWh per tonne of cement, broadly in line with best global practice (World Cement 2025). However, absolute emissions continue to rise with increasing demand, with the sector emitting around 177 MtCO2 in 2023, about 6 per cent of India’s total fossil fuel and industrial emissions. Without decisive interventions, projections suggest that cement manufacturing emissions in India could rise by 250–500 per cent by mid-century, depending on demand growth (Statista; CEEW).
    Recognising this threat, the Government of India has brought the sector under compliance obligations of the Carbon Credit Trading Scheme (CCTS). Cement is one of the designated obligated entities, tasked with meeting aggressive reduction targets over the next two financial years, effectively binding companies to measurable progress toward decarbonisation and creating compliance-driven demand for carbon reduction and trading credits (NITI 2025).
    The industry has responded by deploying incremental decarbonisation measures focused on energy efficiency, alternative fuels, and material substitutions. Process optimisation using AI-driven controls and waste heat recovery systems has made many plants among the most efficient worldwide, typically reducing fuel use by 3–8 per cent and cutting emissions by up to 9 per cent. Trials are exploring kiln firing with greener fuels such as hydrogen and natural gas. Limited blends of hydrogen up to 20 per cent are technically feasible, though economics remain unfavourable at present.
    Efforts to electrify kilns are gaining international attention. For instance, proprietary technologies have demonstrated the potential of electrified kilns that can reach 1,700°C using renewable electricity, a transformative technology still at the pilot stage. Meanwhile, given that cement manufacturing is also a highly power-intensive industry, several firms are shifting electric grinding operations to renewable energy.
    Material substitution represents another key decarbonisation pathway. Blended cements using industrial by-products like fly ash and ground granulated blast furnace slag (GGBS) can significantly reduce the clinker factor, which currently constitutes about 65 per cent in India. GGBS can replace up to 85 per cent of clinker in specific cement grades, though its future availability may fall as steel plants decarbonise and reduce slag generation. Fly ash from coal-fired power stations remains widely used as a low-carbon substitute, but its supply too will shrink as India expands renewable power. Alternative fuels—ranging from biomass to solid waste—further allow reductions in fossil energy dependency, abating up to 24 per cent of emissions according to pilot projects (TERI; CEEW).
    Beyond these, Carbon Capture, Utilisation, and Storage (CCUS) technologies are emerging as a critical lever for achieving deep emission cuts, particularly since process emissions are chemically unavoidable. Post-combustion amine scrubbing using solvents like monoethanolamine (MEA) remains the most mature option, with capture efficiencies between 90–99 per cent demonstrated at pilot scale. However, drawbacks include energy penalties that require 15–30 per cent of plant output for solvent regeneration, as well as costs for retrofitting and long-term corrosion management (Heidelberg Materials 2025). Oxyfuel combustion has been tested internationally, producing concentrated CO2-laden flue gas, though the high cost of pure oxygen production impedes deployment in India.
    Calcium looping offers another promising pathway, where calcium oxide sorbents absorb CO2 and can be regenerated, but challenges of sorbent degradation and high calcination energy requirements remain barriers (DNV 2024). Experimental approaches like membrane separation and mineral carbonation are advancing in India, with startups piloting systems to mineralise flue gas streams at captive power plants. Besides point-source capture, innovations such as CO2 curing of concrete blocks already show promise, enhancing strength and reducing lifecycle emissions.
    Despite progress, several systemic obstacles hinder the mass deployment of CCUS in India’s cement industry. Technology readiness remains a fundamental issue: apart from MEA-based capture, most technologies are not commercially mature in high-volume cement plants. Furthermore, CCUS is costly. Studies by CEEW estimate that achieving net-zero cement in India would require around US$ 334 billion in capital investments and US$ 3 billion annually in operating costs by 2050, potentially raising cement prices between 19–107 per cent. This is particularly problematic for an industry where companies frequently operate at capacity utilisations of only 65–70 per cent and remain locked in fierce price competition (SOIC; CEEW).
    Building out transport and storage infrastructure compounds the difficulty, since many cement plants lie far from suitable geological CO2 storage sites. Moreover, retrofitting capture plants onto operational cement production lines adds technical integration struggles, as capture systems must function reliably under the high-particulate and high-temperature environment of cement kilns.
    Overcoming these hurdles requires a multi-pronged approach rooted in policy, finance, and global cooperation. Policy support is vital to bridge the cost gap through instruments like production-linked incentives, preferential green cement procurement, tax credits, and carbon pricing mechanisms. Strategic planning to develop shared CO2 transport and storage infrastructure, ideally in industrial clusters, would significantly lower costs and risks. International coordination can also accelerate adoption.
    The Global Cement and Concrete Association’s net-zero roadmap provides a collaborative template, while North–South technology transfer offers developing countries access to proven technologies. Financing mechanisms such as blended finance, green bonds tailored for cement decarbonisation and multilateral risk guarantees will reduce capital barriers.
    An integrated value-chain approach will be critical. Coordinated development of industrial clusters allows multiple emitters—cement, steel, and chemicals—to share common CO2 infrastructure, enabling economies of scale and lowering unit capture costs. Public–private partnerships can further pool resources to build this ecosystem. Ultimately, decarbonisation is neither optional nor niche for Indian cement. It is an imperative driven by India’s growth trajectory, environmental sustainability commitments, and changing global markets where carbon intensity will define trade competitiveness.
    With compliance obligations already mandated under CCTS, the cement industry must accelerate decarbonisation rapidly over the next two years to meet binding reduction targets. The challenge is to balance industrial development with ambitious climate goals, securing both economic resilience and ecological sustainability. The pathway forward depends on decisive governmental support, cross-sectoral innovation, global solidarity, and forward-looking corporate action. The industry’s future lies in reframing decarbonisation not as a burden but as an investment in competitiveness, climate alignment and social responsibility.

    References

    • Infomerics, “Indian Cement Industry Outlook 2024,” Nov 2024.
    • TERI & GCCA India, “Decarbonisation Roadmap for the Indian Cement Industry,” 2023.
    • UN Press Release, GA/EF/3516, “Global Resource Efficiency and Cement.”
    • World Cement, “India in Focus: Energy Efficiency Gains,” 2025.
    • Statista, “CO2 Emissions from Cement Manufacturing 2023.”
    • Heidelberg Materials, Press Release, June 18, 2025.
    • CaptureMap, “Cement Carbon Capture Technologies,” 2024.
    • DNV, “Emerging Carbon Capture Techniques in Cement Plants,” 2024.
    • LEILAC Project, News Releases, 2024–25.
    • PMC (NCBI), “Membrane-Based CO2 Capture in Cement Plants,” 2024.
    • Nature, “Carbon Capture Utilization in Cement and Concrete,” 2024.
    • ACS Industrial Engineering & Chemistry Research, “CCUS Integration in Cement Plants,” 2024.
    • CEEW, “How Can India Decarbonise for a Net-Zero Cement Industry?” (2025).
    • SOIC, “India’s Cement Industry Growth Story,” 2025.
    • MDPI, “Processes: Challenges for CCUS Deployment in Cement,” 2024.
    • NITI Aayog, “CCUS in Indian Cement Sector: Policy Gaps & Way Forward,” 2025.

    ABOUT THE AUTHOR:
    Dr Yogendra Kanitkar, Vice President R&D, Pi Green Innovations, drives sustainable change through advanced CCUS technologies and its pioneering NetZero Machine, delivering real decarbonisation solutions for hard-to-abate sectors.

    Dr Shirish Kumar Sharma, Assitant Manager R&D, Pi Green Innovations, specialises in carbon capture, clean energy, and sustainable technologies to advance impactful CO2 reduction solutions.

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    Concrete

    Carbon Capture Systems

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    Nathan Ashcroft, Director, Strategic Growth, Business Development, and Low Carbon Solutions – Stantec, explores the challenges and strategic considerations for cement industry as it strides towards Net Zero goals.

    The cement industry does not need a reminder that it is among the most carbon-intensive sectors in the world. Roughly 7–8 per cent of global carbon dioxide (CO2) emissions are tied to cement production. And unlike many other heavy industries, a large share of these emissions come not from fuel but from the process itself: the calcination of limestone. Efficiency gains, fuel switching, and renewable energy integration can reduce part of the footprint. But they cannot eliminate process emissions.
    This is why carbon capture and storage (CCS) has become central to every serious discussion
    about cement’s pathway to Net Zero. The industry already understands and accepts this challenge.
    The debate is no longer whether CCS will be required—it is about how fast, affordable, and seamlessly it can be integrated into facilities that were never designed for it.

    In many ways, CCS represents the ‘last mile’of cement decarbonisation. Once the sector achieves effective capture at scale, the most difficult part of its emissions profile will have been addressed. But getting there requires navigating a complex mix of technical, operational, financial and regulatory considerations.

    A unique challenge for cement
    Cement plants are built for durability and efficiency, not for future retrofits. Most were not designed with spare land for absorbers, ducting or compression units. Nor with the energy integration needs of capture systems in mind. Retrofitting CCS into these existing layouts presents a series of non-trivial challenges.
    Reliability also weighs heavily in the discussion. Cement production runs continuously, and any disruption has significant economic consequences. A CCS retrofit typically requires tie-ins to stacks and gas flows that can only be completed during planned shutdowns. Even once operational, the capture system must demonstrate high availability. Otherwise, producers may face the dual cost of capture downtime and exposure to carbon taxes or penalties, depending on jurisdiction.
    Despite these hurdles, cement may actually be better positioned than some other sectors. Flue gas from cement kilns typically has higher CO2 concentrations than gas-fired power plants, which improves capture efficiency. Plants also generate significant waste heat, which can be harnessed to offset the energy requirements of capture units. These advantages give the industry reason to be optimistic, provided integration strategies are carefully planned.

    From acceptance to implementation
    The cement sector has already acknowledged the inevitability of CCS. The next step is to turn acceptance into a roadmap for action. This involves a shift from general alignment around ‘the need’ toward project-level decisions about technology, layout, partnerships and financing.
    The critical questions are no longer about chemistry or capture efficiency. They are about the following:

    • Space and footprint: Where can capture units be located? And how can ducting be routed in crowded plants?
    • Energy balance: How can capture loads be integrated without eroding plant efficiency?
    • Downtime and risk: How will retrofits be staged to avoid prolonged shutdowns?
    • Financing and incentives: How will capital-intensive projects be funded in a sector with
      tight margins?
    • Policy certainty: Will governments provide the clarity and support needed for long-term investment
    • Technology advancement: What are the latest developments?
    • All of these considerations are now shaping the global CCS conversation in cement.

    Economics: The central barrier
    No discussion of CCS in the cement industry is complete without addressing cost. Capture systems are capital-intensive, with absorbers, regenerators, compressors, and associated balance-of-plant representing a significant investment. Operational costs are dominated by energy consumption, which adds further pressure in competitive markets.
    For many producers, the economics may seem prohibitive. But the financial landscape is changing rapidly. Carbon pricing is becoming more widespread and will surely only increase in the future. This makes ‘doing nothing’ an increasingly expensive option. Government incentives—ranging from investment tax credits in North America to direct funding in Europe—are accelerating project viability. Some producers are exploring CO2 utilisation, whether in building materials, synthetic fuels, or industrial applications, as a way to offset costs. This is an area we will see significantly more work in the future.
    Perhaps most importantly, the cost of CCS itself is coming down. Advances in novel technologies, solvents, modular system design, and integration strategies are reducing both capital requirements
    and operating expenditures. What was once prohibitively expensive is now moving into the range of strategic possibility.
    The regulatory and social dimension
    CCS is not just a technical or financial challenge. It is also a regulatory and social one. Permitting requirements for capture units, pipelines, and storage sites are complex and vary by jurisdiction. Long-term monitoring obligations also add additional layers of responsibility.
    Public trust also matters. Communities near storage sites or pipelines must be confident in the safety and environmental integrity of the system. The cement industry has the advantage of being widely recognised as a provider of essential infrastructure. If producers take a proactive role in transparent engagement and communication, they can help build public acceptance for CCS
    more broadly.

    Why now is different
    The cement industry has seen waves of technology enthusiasm before. Some have matured, while others have faded. What makes CCS different today? The convergence of three forces:
    1. Policy pressure: Net Zero commitments and tightening regulations are making CCS less of an option and more of an imperative.
    2. Technology maturity: First-generation projects in power and chemicals have provided valuable lessons, reducing risks for new entrants.
    3. Cost trajectory: Capture units are becoming smaller, smarter, and more affordable, while infrastructure investment is beginning to scale.
    This convergence means CCS is shifting from concept to execution. Globally, projects are moving from pilot to commercial scale, and cement is poised to be among the beneficiaries of this momentum.

    A global perspective
    Our teams at Stantec recently completed a global scan of CCS technologies, and the findings are encouraging. Across solvents, membranes, and
    hybrid systems, innovation pipelines are robust. Modular systems with reduced footprints are
    emerging, specifically designed to make retrofits more practical.
    Equally important, CCS hubs—where multiple emitters can share transport and storage infrastructure—are beginning to take shape in key regions. These hubs reduce costs, de-risk storage, and provide cement producers with practical pathways to integration.

    The path forward
    The cement industry has already accepted the challenge of carbon capture. What remains is charting a clear path to implementation. The barriers—space, cost, downtime, policy—are real. But they are not insurmountable. With costs trending downward, technology footprints shrinking, and policy support expanding, CCS is no longer a distant aspiration.
    For cement producers, the decision is increasingly about timing and positioning. Those who move early can potentially secure advantages in incentives, stakeholder confidence, and long-term competitiveness. Those who delay may face higher costs and tighter compliance pressures.
    Ultimately, the message is clear: CCS is coming to cement. The question is not if but how soon. And once it is integrated, the industry’s biggest challenge—process emissions—will finally have a solution.

    ABOUT THE AUTHOR:
    Nathan Ashcroft, Director, Strategic Growth, Business Development, and Low Carbon Solutions – Stantec, holds expertise in project management, strategy, energy transition, and extensive international leadership experience.

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