Indian cement industry needs tech intervention

In a recent report, the Reserve Bank of India (RBI) has advocated for technological intervention to address carbon emissions from the cement industry, which, in turn, will help achieve India’s net-zero emission targets, as reported by Mongabay-India. Globally, cement production contributes around eight percent of the world’s anthropogenic CO2 emissions. India is the world’s second-largest cement producer and consumer, after China. The consumption of cement in India is only expected to grow in the coming years with over 250 million people estimated to be added to its urban population in the next 20 years.

As Mongabay-India states, 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, urbanization and industrialization mean that India sees the largest increase in energy demand of any country. The report highlighted that even at a relatively modest assumed urbanization rate, this means that 270 million people are still set to be added to India’s urban population over the next two decades.

The RBI report (Volume LXXV No. 12) points out that the Indian economy bounced back strongly in Q2:2021-22, with gross domestic product surpassing its pre-pandemic levels, and inflation broadly aligning with the target. A host of incoming high frequency indicators are looking upbeat and consumer confidence is gradually returning. As for the construction sector, activity has gathered pace backed by a spurt in cement production and demand for residential units gaining momentum. Demand for cement is likely to remain strong in the upcoming quarters due to the government’s push for infrastructure projects. Though the cement industry causes anthropogenic CO2 emissions, recent developments in green technologies, particularly related to reverse calcination, offer exciting opportunities for India. The Indian cement industry is among the most energy and carbon-efficient of cement industries globally and has the lowest carbon footprint on account of early and voluntary actions, according to industry representatives.

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 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 report advocates the adoption of technology, such as carbon capture, to contribute to India’s net-zero carbon emission target. It acknowledged that India’s cement sector has already made progress in reducing carbon emission targets and 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.”

A significant amount of CO2emissions 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 decarbonize the cement industry … reverse calcination could sequester up to five percent of cement’s emissions at present, which could be extended to 30 percent 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…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,” the central bank said.

According to the RBI, India’s domestic cement industry has made “remarkable progress of reducing CO2 emission levels by about 36 percent 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 US$ 29 billion to US$ 50 billion,” it notes.

The RBI policy recommendations include increasing the financing towards green sustainable solutions through subsidized interest loans; proactively engaging with the leading research institutes/countries involved with green tech-related innovation in the cement industry; and incentivizing the cement industry to procure stubble from the northern states as a biomass fuel to execute the process of reverse calcination and pure carbon capture.