India is a country under construction. Over 250 million people are estimated to be added to the country’s urban population over the next two decades.
This translates into a massive and sustained demand for building materials such as cement—an industrial sector with high carbon emissions. The Reserve Bank of India (RBI), in a recent report, has advocated for technological intervention to address these carbon emissions from the cement industry which in turn will help achieve India’s net-zero emission targets.
In November 2021, at the Glasgow Climate summit, India announced net-zero carbon emissions by 2070. The path to this goal, however, is not easy with India focusing on increasing per-capita energy consumption, ensuring energy security, and tackling rapid urbanisation.
In one of its recent bulletins, the RBI, which is India’s central bank, noted that with India aiming to reach half of its energy requirements from renewables and reduce the economy’s carbon intensity by 45% by 2030, it “necessitates a policy relook across sectors, especially where carbon emission is high” and “cement industry is one of them.” However, it said, recent developments in green technologies, particularly related to reverse calcination, offer “exciting opportunities” for the cement sector.
On a global level, cement production contributes around 8% of the anthropogenic CO2 (carbon dioxide) emissions. China is the largest cement producer, accounting for about 55% of global production. India is the world’s second-largest cement producer and consumer, accounting for over eight per cent of the global installed capacity which is only expected to grow.
The RBI report noted that India’s cement production is expected to reach 381 million tonnes by 2021-22 while the consumption may likely be around 379 million tonnes. It highlighted that a renewed focus on big infrastructure projects like the National Infrastructure Pipeline, low-cost housing (Pradhan Mantri Awas Yojana), and the government’s push for the SMART cities mission is likely to drive demand for the cement in future. “This commitment towards building high-quality infrastructure also poses a risk to India’s commitment to NZE (net-zero emission) norms,” it said.
The RBI’s analysis aligns with the India Energy Outlook 2021 which notes that most of the buildings that will exist in India in 2040 are yet to be built and said that an expanding economy, population, urbanisation and industrialisation mean that India sees the largest increase in energy demand of any country. The report highlighted that even at a relatively modest assumed urbanisation rate, India’s sheer size means that 270 million people are still set to be added to India’s urban population over the next two decades. This projection by the International Energy Agency noted that urbanisation underpins a massive increase in total residential floor space from less than 20 billion square metres, at present, to more than 50 billion in 20 years and this would translate into demand for cement becoming more than double by 2040. “There is less decoupling between activity and emissions in the industry sector. Cement production grows by 150% between 2019 and 2040, and emissions rise by 100 per cent,” it noted.
Given this future scenario, the RBI has recommended that there is a need to align India’s economic goal with its climate commitments by implementing emerging green tech solutions. It explained that a significant amount of CO2 emissions in cement making result from calcination, while the rest comes from burning coal and other fossil fuels.
“Studies suggest that capturing the CO2 emissions before it enters the atmosphere and storing it away through reverse calcination is the most effective approach to de-carbonise the cement industry…reverse calcination could sequester up to 5% of cement’s emissions at present, which could be extended to 30% with the improvement in technology. This process can be further enhanced by employing green energy instead of fossil fuels to perform the process of calcination,” noted the RBI.
The central bank said that “biomass such as municipal and industrial waste can be used as an alternative to fossil fuels” and “India can also look at fly ash, graphene, natural and synthetic fibres as a substitute for cement.”
According to the RBI, India’s domestic cement industry has made “remarkable progress in reducing CO2 emission levels by about 36 per cent from 1.12t/t to 0.719t/t of cement produced between 1996 and 2017.” To further reduce it by half and “achieve the target of 0.35t CO2/t of cement by 2050, the cement industry requires an investment of $29 billion to $50 billion,” it notes.
The Reserve Bank of India recommended an increase in finance towards green sustainable solutions through subsidised interest loans, proactive engagement with the leading research institutes and countries involved with green tech-related innovation in the cement industry. It also called for incentivising the cement industry to procure stubble from the northern states of Punjab, Haryana, Uttar Pradesh and Rajasthan as a biomass fuel to execute the process of reverse calcination and pure carbon capture.
Mahendra Singhi, who is the managing director and chief executive officer of Dalmia Cement (Bharat) and the former president of the Cement Manufacturers Association, emphasised that the Indian cement sector is “the most energy and carbon-efficient globally” (when compared to cement sectors in other countries) and has the “lowest carbon footprints on account of early and voluntary actions from within the sector.”
“Despite price sensitivity, we are the lowest carbon footprints producer globally. In my view, it is the only way forward. Our early actions have made the sector ready for bigger and deeper changes,” he said.
Asked if a government regulation will push the cement industry to take giant strides on the issue, Singhi emphasised that the “regulations on energy and sustainability are already advancing.”
“For example, SEBI has introduced the BRSR (Business Responsibility and Sustainability Reporting) disclosures for top-1,000 companies in India. At the same time, regulations may not be needed in a system where the industry itself is proactive and taking self-motivated actions and targets,” he said.
Talking about his own company, Singhi said they are committed to becoming net-zero. “Dalmia Cement was the first cement group to commit to becoming carbon negative on account of a circular economy, energy efficiency, non-fossil power generation, electric mobility, use of green hydrogen, sustainable biomass use as a fuel and carbon capture and utilisation,” he said while adding that they demonstrated that decarbonisation of the industry makes business sense. In 2018, Dalmia cement announced the target of becoming carbon negative by 2040.
“Positive push on decarbonisation policies on renewable energy, wasteland use for sustainable biomass and carbon capture and utilisation along with the international carbon market can be a big push to revive long payback projects in the industry and towards shorting of the whole long term decarbonisation timeline,” Singhi further said.
In 2021, another major cement player in India, ACC Limited, announced 2030 carbon emission reduction targets committing to reduce its CO2 intensity in cement operations from “511 kg in 2018 to 409 kg CO2 per ton of cementitious material by 2030.” It signed the “Business Ambition for 1.5°C pledge and joined the Race to Zero campaign of the United Nations Framework Convention on Climate Change.”
Karthik Ganesan, who is a research fellow at the Council on Energy, Environment and Water (CEEW), said that cement as a product has fundamentally remained unchanged since its discovery, in that it is dependent on emissions-intensive materials and processes.
“If we need to address the issue of carbon emissions in the cement manufacturing process, the emissions from the calcination stage (breaking down limestone to lime) have to be addressed and the only feasible solution today to completely remove it is carbon capture and storage or utilisation. India is yet to make headway in determining its storage potential and the cement sector can drive this imperative,” Ganesan told Mongabay-India.