Greening India’s cement sector

As a way to incentivise the transition, the federal government might think about introducing fiscal incentives by the use of tax rebates for producers and subsidies for shoppers of inexperienced cement.

By Diya Dasgupta

India is the second-largest producer of cement on this planet, with an general manufacturing capability of 500 MTPA that contributes to roughly 30% of the emissions accruing from the nation’s manufacturing sector. Because of rising inhabitants, urbanisation and infrastructural growth by the use of authorities targets and programmes such because the Sensible Cities Mission, Housing for All, highway growth tasks, and so forth, cement demand is anticipated to develop multi-fold within the coming years. With international locations throughout the globe setting their eyes on attaining their internet zero ambitions, the time is ripe for India to shift in the direction of inexperienced cement manufacturing thereby paving the way in which for decarbonising one among its hard-to-abate sectors.

Cement manufacturing generates emissions ensuing from chemical processes (60-70%) and fossil gasoline burning (30-40%). Thus, it turns into crucial to discover alternatives for minimising emissions and optimising power use. The initiatives undertaken by the Indian cement sector to this point to curb emissions have been restricted to operational advances comparable to power effectivity, different gasoline use, clinker substitution, and so forth. The sector was included below the PAT scheme in 2012 and, until date, a complete of 175 Designated Shoppers have been coated below the six cycles.

Outcomes of PAT II point out that the sector exceeded its power saving goal by 41.82 %. As per a WBCSD (2018) report, the share of blended cement within the Indian manufacturing combine has step by step elevated from 68% in 2010 to 73% in 2017. The general clinker issue has additionally decreased from 0.74 to 0.71 throughout the identical interval. Based mostly on estimates by CII, the thermal substitution charge with different gasoline use has elevated from lower than 1% to 4% between 2010 and 2016.

Unlocking additional emission discount potential requires adoption of technological improvements geared toward greening the trade. Whereas the speak of ‘inexperienced cement’ within the Indian context will not be new and the preliminary floor work has already been laid out by a couple of cement giants, at current, there exists no complete framework for certifying what makes cement a inexperienced product. Dalmia Cement had introduced in 2018 its ambition of turning into carbon-negative by 2040 and has since then undertaken a number of measures together with augmenting the share of renewable power used, conducting pilot tasks experimenting with CCU and so forth. Early this yr, ACC Restricted launched ‘ECOPact’ (initially launched by LafargeHolcim in 2020), a ready-to-use inexperienced concrete combine that includes 30-50% decrease embodied carbon content material as in comparison with the standard Bizarre Portland Cement.

What’s stopping the shift to inexperienced cement for the opposite cement producers? One apparent barrier is the potential excessive prices and the ensuing disruptions in worth chains, which maybe the bigger gamers can endure. Nonetheless, for the smaller gamers it might be cheaper to proceed producing utilizing typical strategies and uncooked supplies. As a way to incentivise the transition, the federal government might think about introducing fiscal incentives by the use of tax rebates for producers and subsidies for shoppers of inexperienced cement.

Additional, one solution to partly circumvent the demand-side constraint is by making certain minimal procurement of inexperienced cement below government-mandated infrastructure tasks and personal development tasks. This could be just like the Renewable Buy Obligation that requires discoms to obtain a share of their power from renewable sources. India might think about introducing grades of inexperienced cement that adjust primarily based on their “greenness”, CO2 discount potential and manufacturing prices. This could must be accompanied by standard-setting when it comes to product high quality to make sure comparability throughout variants, thereby easing within the transition in a phased method.

Thus, the nation ought to think about a tailor-made method for decarbonising its cement sector by pushing the envelope past choosing the low hanging fruits of power effectivity and gasoline switching. The Indian cement sector is among the many most energy-efficient industries on this planet, and unlocking additional decarbonisation potential would entail a shift to inexperienced cement.

Analysis assistant, ICRIER