Spotlight on India: Cement companies accelerate towards a net-zero transition
We Mean Business coalition
The Indian cement industry is at the cutting edge of the emerging global trend towards low-carbon cement. As the second-largest cement producer in the world after China, a look at how Indian cement companies are working towards their climate commitments offers a great insight into the direction of travel of the global industry.
As the most widely used man-made substance, cement plays a critical role in the world. It is fundamental to meeting growing demand for housing, power and transport infrastructure across the globe. The government of India is strongly focused on infrastructure development to boost economic growth. The “100 Smart Cities Mission” initiated by the Union Government of India, under Prime Minister Shri Narendra Modi, aims to build 100 smart cities across the country by 2022, expanding the capacity of railways and upgrading road length by 1.25,000kms – as well as the facilities for handling and storing cement. These measures mean an increase in construction activity, thereby boosting cement demand.
Demand for cement is growing globally and will continue to grow as populations expand and continue to urbanise. However, both globally and in India, this growth rubs up against global consensus and ambition to reduce greenhouse gas emissions to meet the climate goals of the Paris Agreement.
The imperative to cut emissions in India is two-fold: to meet global climate targets and to combat the very serious and current problem of the high levels of air pollution, a major issue impacting the health of the population. As home to 15 of the 20 most polluted cities in the world, studies indicate that nearly 700 million people in India are exposed to unhealthy air. Air pollution has clear links to premature death and has also been found to increase risk among people infected with the COVID-19 virus.
Many of the solutions to cut air pollution are the same as those that will tackle climate change. India has the potential to significantly cut air pollution and take the global lead as a thriving, innovative net-zero carbon economy because it is already investing in clean power and has some of the largest solar power plants in the world.
However, according to the latest science, the built environment in India, and globally, now needs to fast-track to zero-carbon.
Emissions from the production of cement come mainly from the energy used for heating kilns to produce clinker (35% of emissions from overall cement production) and the chemical processes that convert limestone into calcium oxide. This presents the industry with a unique challenge that is not widely understood beyond the sector.
Despite these challenges the cement sector has been a pioneer in recognising the need to respond to climate change. It has already made substantial emissions reductions through increasing energy efficiency, fuel substitution and new production techniques. Four of India’s largest cement makers, UltraTech, Dalmia, Shree and Ambuja Cement are stepping up their ambition to tackle climate change by setting a science-based target (SBT) to cut greenhouse gas (GHG) emissions in line with the Paris Agreement.
Dalmia Cement committed to a SBT in August 2018 and committed to become a carbon negative cement group by 2040. Dalmia was the first company globally to commit to the Climate Group’s RE100 campaign (100% renewable electricity use by 2030) and EP100 (doubling the energy productivity by 2030).
The question is, how are companies like Dalmia working to meet these ambitious targets and overcome the sector’s challenges?
Mahendra Singhi, MD and CEO of Dalmia Cement Limited said: “Our first priority is to replace the fossil-fuel based electricity through zero-carbon electricity generation technologies such as waste heat recovery (WHR) power generation systems.”
“After joining RE100, we deployed a 9.2MW WHR system, generating electricity without fossil fuels. At present, our focus is to further develop our on-site fossil free electricity generation facilities as well as rooftop and ground-mounted solar energy plants and converting existing fossil-fuel based captive power plants to re-generation by use of renewable biomass as a fuel.”
WHR technology recovers heat from the cement plant flue gases which would otherwise be lost. Without any fossil fuel consumption, the heat is used to generate electricity. This way, the heat which had been wasted is utilized for generation of zero carbon, clean electricity.
“Two more WHR systems are at implementation stage in two other Dalmia cement plants. We have also deployed 8 MW captive solar power generation projects with more than 30 others in implementation stages,” said Mr Singhi.
Energy is the primary need of the cement industry and renewable electricity provides an opportunity to make infinite, clean and safe energy that is increasingly affordable for the cement industry.
Another way for cement companies to reduce their emissions is through switching the fuel they use for generating heat. In the short term this means switching from coal to gas. In the longer term cement companies can explore increasing the use of waste or biomass as a fuel (which requires only a modest retrofit to existing kilns); replacing fossil fuels with hydrogen (which requires furnace redesign) and switching to electricity as the heat source.
In India, and globally, progressive cement companies are increasingly harnessing the opportunities on offer in the transition to clean power while reducing their carbon footprint. Companies have a key role to play in driving up demand for renewable electricity.
According to the IEA, Indian solar power is now nearly 75% cheaper than power from coal. The sector attracted $3 billion (2.5 billion euros) in investments in 2019, with India securing four of the five largest renewable energy deals in the world. Leading Indian cement companies are recognising that their future competitiveness relies on being able to respond to the dual challenge of continuing to grow, whilst taking ambitious action to tackle climate change. Business as usual across the sector will come under increasing pressure as the global commitment to tackle climate change – across mature and emerging markets alike – becomes increasingly tangible in the political, regulatory, financial and reputational factors that shape the sector.
In Shree cement’s 2019 annual report, Mr. Prakash Narayan Chhangani, Whole Time Director said: “It is our constant endeavour and an ongoing pursuit to find ways and means towards sustainable development, optimal utilisation of resources and minimising our carbon footprint.”
With a cement production capacity of 35 million tons per annum across six states, Shree is among the top three producers in India and one of the country’s largest 100 companies in terms of market capital.
Most recently, UltraTech Cement co, the largest producer of cement in India, committed to an SBT. UltraTech is already a member of the Climate Group’s EP100 initiative, with a commitment to doubling its energy productivity by 2035 compared to its 2010 baseline.
In 2005, UltraTech Cement set the target to reduce emissions by 25% down from 2005-06 levels – a target that will be close to being reached in 2020, but Arvind Bodhankar, Chief Sustainability Officer at UltraTech says there are many environmental and economic motivators for the company to go further and faster. UltraTech is ‘now increasing its ambitions to reduce carbon emissions by up to 34% by 2030’, Mr Bodhankar says.
Ultratech’s climate leadership is keeping a powerful momentum for a notoriously challenging industry to decarbonise. To achieve the target, UltraTech will increasingly shift to integrate low-carbon strategies and scale up investments in the development of energy efficiency, renewable energy and innovative, low-carbon and circular products and materials.
On 1 September, 40 of the world’s leading cement and concrete companies unveiled a joint industry ‘2050 Climate Ambition’ in partnership with the Global Cement and Concrete Association (GCCA). The ambition statement demonstrates the commitment of the industry across the globe to drive down the CO2 footprint of the world’s most used man-made product, with an aspiration to deliver society with carbon-neutral concrete by 2050.
Maria Mendiluce, CEO of the We Mean Business coalition said: “Targeting carbon neutrality by 2050 is a major signal of ambition coming from a sector that will play a key role in building the zero-carbon economy of the future. We commend the commitment from the GCCA and its members and look forward to continuing working with them and others in the built environment system to help ensure this ambition delivers climate action.”
These commitments send a clear message to the sector that cutting greenhouse gas (GHG) emissions from the construction industry is possible and will ultimately help deliver the zero-carbon built environment of the future.
Setting a science-based target to reduce GHG emissions in line with climate science is vital to future-proof growth, increase innovation, strengthen investor confidence and increase profitability and resilience.
These strides signal the direction of travel not only for the Indian cement industry, but for the entire global built environment – ultimately helping to lay the foundations for the zero-carbon economy by mid-century.
Find out how your company can Take Action at wemeanbusinesscoalition.org/take-action/
This article originally featured in International Cement Review’s Nov edition.