Green Power Procurement

CEMENT
NAME – Anurag Tiwari
UID – 2024-3108-0001-0004
Section – CF-2
TABLE OF
CONTENT
1. Indian Cement Sector Overview
2. Cement Manufacturing Process Overview
3. Ways to Decarbonize the Cement sector
4. Key decarbonization policy initiatives
5. Decarbonization initiatives by leading players

6. Case Study- Shree Cement Ltd.

• Company Overview
• Manufacturing Process and Energy Consumption
• Sustainability Initiatives
• Renewable Energy Installations by Shree Cement
• Renewable Energy Generation and Consumption
• Renewable Energy Benefits
• Benefits accrued from other decarbonization measures
• Outlook for Shree Cement

7. Way Forward
INDIAN CEMENT The cement industry in India is one of the core industries essential for
the country's economic growth and development. Cement production

SECTOR began in India in 1914 in the state of Gujarat. After the industry was
delicensed in 1991, it has experienced significant growth and has

OVERVIEW become globally competitive. As of 2024, India is the world's

second-largest cement producer, accounting for approximately 10% of
the annual global cement production.

Table 1: Indian Cement Sector Overview

Parameters Description

India’s total installed cement capacity 632 Metric Million Tonne

(FY2024) (MMT)

Actual cement production (FY2024) 433 MMT

Limestone Reserves (as of 2020) 2,27,589 MMT

India’s share in global

Approximately 10%
cement production (2024)

Electricity consumption in cement

23.40 TWh
sector (FY2023)

Clinker Factor (FY2023) 75%

Thermal Substitution Rate (2023) 6%

CO2 emissions in cement sector (FY2022) 210.16 MtCO2

Contribution to India’s GDP 1.20%

Current Employment More than 1 million

_
Note: Clinker is defined as calcium silicate rock formed during the heating of raw materials in a cement
kiln. Clinker is grinded with other materials to form cement.
Thermal Substitution Rate (TSR) is defined as proportionate heat substitution of traditional fossil fuel
(coal) by using alternative fuels such as waste (like plastic) and biomass.
Clinker Factor, also known as clinker-to-cement ratio is defined as ratio of clinker to additives used in
final cement.

11
 CEMENT PRODUCTION Figure 2: Cement sector’s per capita consumption (FY2024)

TREND IN INDIA 1750-

China
From 2019 to 2024, India's installed cement capacity increased from 250- 1850
510 MMT to 632 MMT, with a Compound Annual Growth Rate (CAGR) India
270 310-
Japan
of 4.38%. Subsequently, cement production has also increased at a 330
320-
similar pace with a CAGR of 3.8%, rising from 337.3 MMT to 433 MMT in USA
the same period.
340 600-
Vietnam
650
Figure 1: India's Cement Sector: Installed Capacity, Production, and Capacity
Utilization

800
100
Installed Capacity Cement Production
700 90
Capacity Utilisation

Capacity Utilization (%)

80
Metric Million tonnes

600
70 500-550
500
60 Kg
400 50
Source: Shree Cement Corporate Presentation, JMK Research
300 40
China is the world's top cement producer, accounting for approximately
30
200 50% of global production. Apart from India (at 10%), other countries
20 contribute to the remaining 40% of cement production. This includes
100
10 Vietnam (approximately 2.5%), the United States (about 2.2%), and
0 Turkey (around 1.9%).2
FY2009 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 0
Although India is the second largest producer, its annual per capita
Source: PIB, Department for Promotion of Industry and Internal Trade (DIIPT), JMK Research
cement consumption (at 250 to 270 kilograms) remains significantly
Although lower than the global average (500 to 550 kilograms).3 This indicates a
capacity and production have increased, capacity utilization
substantial potential for sector growth in the near future. Indian
in the cement industry has been fluctuating. Over the years, it has
cement sector is likely to add 150-160 MMT bringing the total installed
declined from 81% in FY2009 to a low of 56% in FY2021 due to COVID-
capacity to about 782-792 MMT by FY2028.4
19, before rising to approximately 69% in FY2024. The decrease in
capacity utilization rate during the past decade was attributed to 1
International Cement Review | India is looking at recovery | January 2022
excessive capacity additions, which were not met with a 2
U. S. Geological Survey | Cement Statistics and Information | 2024
corresponding increase in demand, leading to a supply demand 3
Shree Cement | Corporate Presentation | July 2023
mismatch.1
4
Crisil | Cement makers to add 150-160 MTPA capacity by fiscal 2028 | January 23, 2024 2
1
 STATE-WISE Figure 4: Cement Installed Capacity in Top Ten States

SHARE
In terms of state-wise cement production, Rajasthan, Andhra Pradesh,
Karnataka, Madhya Pradesh, and Tamil Nadu are the top five states in Madhya Pradesh
terms of production capacity. Together, they contribute to more than >41 MMTPA
49% of the country's cement production.
The states leading in cement production also have the highest
Uttar Pradesh
limestone reserves. India holds a total of 227.58 billion tonnes of >27.5 MMTPA
limestone reserves. The top five states-Karnataka (25%), Andhra Pradesh
(13%), Rajasthan (13%), Meghalaya (10%), and Gujarat (10%) hold majority of
these reserves.

Figure 3: State-wise share of cement production capacity Rajasthan

>73 MMTPA

Rajasthan,
12%
Gujarat
>39 MMTPA

Chhattisgarh
Andhra
>27.3 MMTPA
Pradesh
10%
Others Maharashtra
, 100% >39.5 MMTPA Telangana
36%
= >30 MMTPA
Karnataka,
632 MMTPA 7% Andhra Pradesh
Karnataka >65 MMTPA

Madhya >47 MMTPA

Pradesh >50 MMTPA
7%
Uttar Pradesh, 4%
Tamil Nadu 30 - 50 MMTPA
Tamil
>40.8
Telangana, 5% Nadu,
MMTPA <30 MMTPA
7%
Gujarat, 6%
Maharashtra,
6%
S

13
ENERGY CONSUMPTION
Globally,
in year 2022, the cement sector was the third largest industrial consumer behind chemical sector and iron and steel sector, consuming 12
EJ (3333 TWh), thereby accounting for 7.18% of global industrial energy consumption.5
On the other hand, in India, the cement sector was the second largest industrial consumer behind iron and steel, consuming 0.76 EJ (211.1 TWh),
representing 8% of the total industrial energy consumption.

Figure 5: Energy consumption in cement sector Global vs. India (2022)

Global Industrial Energy Consumption Indian Industrial Energy Consumption

Electricity share in
Electricity share in energy
energy consumption = Electricity
consumption = 10% per
13% per tonne of cement Consumption Share
tonne of cement
28.70%
25.00%

16%

Electrical
Energy
Electrical 56%

0.26
Energy 5%

16 9.5
39.12% 0.37

2.86 GJ/tonne of Cement

2.57 GJ/tonne of Cement

Exajoules
5
7
8.00% 23%
(46389 TWh)

Thermal Energy
Coal based

2.31
Thermal
Energy captive
67.00% power plants
4.10% 2.49
20.90% Iron & Steel WHRS
7.18% Cement
Renewables
Chemical Iron & Steel Cement Others
Grid
Aluminium Others

Source: IEA, Industry Research papers, JMK Research, CII

In terms of energy intensity, the Indian cement industry is quite advanced and comparable to international standards. The specific thermal energy
consumption in India's cement sector stands at 0.73 GCal/tonne of clinker (848 kWh), while specific electrical energy consumption is 72 kWh/tonne of
cement. In contrast, the global cement sector's specific thermal energy consumption is 13% higher than India's average, i.e., 0.83 GCal/tonne of clinker
(965 kWh), and specific electricity consumption is 41.6% higher, i.e., 102 kWh/tonne of cement.

5
IEA | World Energy Outlook 2023 | 2023
14
EMISSION INTENSITY
In 2022, global industrial emissions totalled 8,998 MtCO2, with the cement industry emerging as the second largest contributor, accounting for 26.8%
of these emissions. The worldwide cement sector's emission intensity stands at 0.58 tCO2/tonne of cement produced.6 Since 2018, this emission
intensity has remained relatively stable despite a 9% increase in the clinker-to-cement ratio. Normally, an increase in clinker-to-cement ratio would
result in higher emissions. However, due to the increased usage of biomass and non-renewable waste (plastic, solid waste, etc.) in the fuel mix, the
emission intensity hasn't changed over the years.7
The Global Cement and Concrete Association (GCCA) is an international industry association that aims for a 20% reduction in emissions by
2030 (compared to 2020) and net zero emissions by 2050 for its member companies.8 Prominent global members of the GCCA include firms
such as LafargeHolcim (Switzerland), HeidelbergCement (Germany), and Cemex (Mexico). Leading Indian players like Ultratech Cement, Shree
Cement, and Dalmia Cement etc., members of the GCCA, hold over 65% of India’s installed cement capacity.

Figure 6: Emissions in cement sector Global vs. India (2022)

Total Global Industry

Cement Emission Intensity Total India’s Industry Cement Emission Intensity
Emissions = 8,998
0.58 tCO2/tonne of Cement Emissions = 841 0.583 tCO2/tonne of Cement
MtCO2
MtCO2

0.6
0.6
Others

Emission Intensity (tCO2/tonne of Cement)

Emission Intensity (tCO2/tonne of Cement)

Other 17%
26.26% 0.5
0.5

India
CO2 Emissions in
C02 Emissions (MtCO2)
Aluminium Chemicals
C02 Emissions (MtCO2)

2.94% 20%
0.4
0.4
Chemicals
14.78% Cement
Global CO2

25% 0.3
0.3
Emissions

Cement
26.87% 0.2
0.2
Iron
and Steel

Source: IEA, JMK Research

38% 0.1
Iron & Steel 0.1
29.15%

0.0
0.0

Indian CO2
Global Industrial CO2 Emission Emission Emission
Emissions Intensity Intensity

6 7 8
IEA | Cement | July 2023 WEF | Net-Zero Industry Tracker 2023 Edition | November 2023 GCCA | The GCCA 2050 Cement and Concrete Industry Roadmap for Net Zero Concrete 5
1
 In 2022, India's industrial CO 2 emissions stood at 841 Mt, with cement contributing 25% to the total industrial emissions. India's cement industry has
reduced its emissions intensity by 19.4%, from 0.72 tCO2 per tonne of cement in 2017 to 0.583 tCO2 per tonne of cement in 2022 with an annual
reduction of 4.23%.ª
This reduction is primarily attributed to the increased use of alternative materials like fly ash and slag to replace clinker, allowing for the production of
blended cement.¹º Depending upon the composition, there are various types of cement, namely Ordinary Portland Cement (OPC), Portland Pozzolana
Cement (PPC), and Portland Slag Cement (PSC). OPC is a non-blended cement, while PPC blends fly ash and PSC incorporates slag, making them
blended cement. The percentage of blended cement in the Indian cement industry has risen to 81% in 2023 from 68% in 2010,11 resulting in the
industry outperforming global players in specific emissions intensity. The graph below depicts the growth in the production share of blended cement in
India throughout the years.¹²

Figure 7: Rising share of blended cement in annual production throughout the years

80%
72%
70% 69%
65%
61%
Cement Production Share

60%

50%
45% 44%

40%

31%
30% 27%

Source: CMA, JMK Research

20% 19% 18%

11% 10%
10% 9%
7% 7%

1% 1% 1% 1% 1%
0%
1996 2003 2010 2017 2023

OPC (non-blended) PPC (blended) PSC (blended) Other

9 10
WEF | Net-Zero Industry Tracker 2023 Edition | November 2023 WEF | Surfacing Supply of Near-Zero Emission Fuels and Materials in India | July 2023
12
WBCSD | Low carbon Technology Roadmap | 2018 6
1
 CEMENT MANUFACTURING PROCESS OVERVIEW
Cement is made from raw materials such as limestone, clay, and shale, which undergo a chemical reaction at high temperatures. Cement
manufacturing is energy-intensive and results in high carbon emissions. It can be made using either the wet or dry process, with over 90% of
India's cement manufacturing capacity using the dry process due to its lower energy and water consumption.13
The production of cement involves the use of both electrical and thermal energy. The total energy consumption for producing one tonne of cement
ranges from 3.32GJ to 3.38GJ (922 kWh - 939 kWh), with thermal energy accounting for more than 90%, i.e. 0.74 GCal/tonne of clinker (860 kWh). In
comparison, electricity consumption varies from 65.9 kWh to 83 kWh/tonne of cement.

Figure 8: Cement Manufacturing Process

INTEGRATED UNIT Grinding Unit

Crushing Grinding Packaging

Clinkerisation

Limestone &
Raw Mix Clinker Cement Packaged Cement
Clay

20.25-24.5 kWh 22-30 kWh 22-27 kWh 0.65-1.5 kWh

0.74 Gcal (860 kWh)

0.014-0.015 tonnes CO2 0.55-0.56 tonnes CO2 0.016-0.017 tonnes CO2 0.005-0.009 tonnes CO2

Electricity Consumption (kWh/tonne of cement)

Thermal Energy Consumption (Gcal/tonne of clinker) Emissions (tonnes CO2/tonne of cement)
Source: Industry Research Papers 13
Cement Manufacturing Association| A Hallmark of Energy-Efficient Operations | 2021
17
The production process of cement relies on electrical energy to power most of the
equipment, while high temperatures needed for clinker production depend on
thermal energy primarily obtained from fossil fuels like pet coke and coal. The
above figure illustrates the specific electricity and thermal energy consumption
needed in integrated units at different stages of cement manufacturing using the
dry process.
An integrated unit is a complete facility that manufactures cement from limestone,
while a grinding unit is specifically designed to grind clinker along with necessary
additives to produce cement. Clinker for a grinding unit is generally supplied by its
associated clinkerization unit. Grinding units are generally established near major
cement consumption centres or transportation hubs.
Clinker production is the most energy-intensive stage in cement manufacturing,
accounting for 94-95% of the total energy consumption. This is due to the use of
thermal and electrical energy during the chemical reaction of limestone, known as
calcination, and the operation of auxiliary components such as cooler fans, kiln
drive systems, and kiln feed mechanisms.
Other processes such as raw material crushing and grinding, cement grinding, and
cement packaging primarily use electricity, contributing 5-6% of the total
energy consumption required to produce a tonne of cement.

The cement sector largely relies on captive power plants (CPP) for its
electricity needs, with a total installed capacity of ~6 GW. Of this installed
capacity, 60-65% are coal-based CPPs.

Clinkerization units depend heavily on coal-based captive power plants (CPP) due to
their enhanced reliability, lower power cost vis-à-vis grid and easy access to captive
coal mines.

18
 JMK Research & Analytics

WAYS TO DECARBONIZE THE CEMENT

SECTOR
The cement industry is considered hard-to-abate due to the fact that a large portion (about 60%) of its CO2 emissions come from the calcination
process of its primary raw material, limestone ore. Approximately 31% of the emissions stem from fuel combustion, such as pet coke or coal, while the
remaining 9% is from electricity consumption.

Figure 9: Process CO2 emissions & mitigation measures

Emissions from raw material

Emissions can be mitigated using: (calcination)
1. Adoption of RE for electricity generation Emissions from coal combustion
2. Waste Heat Recovery System Emissions from electricity
3. Carbon Capture and Storage (CCS)
4. Afforestation

9%

31%
0.583 60%
Emissions can be mitigated
using:
Emissions can be mitigated tonnes of CO,
using: per tonne of 1. Carbon Capture and Storage (CCS)
1. Kiln Electrification cement 2. Afforestation
2. Carbon Capture and Storage (CCS) 3. Clinker substitution
3. Using alternate fuels like biofuel and
Municipal solid waste (MSW)
4. Afforestation

Source: JMK Research

Emissions in the cement industry primarily originate from kilns, involving emissions from the calcination process of limestone and its associated fuel
(coal) combustion. At present, carbon capture, utilization, and storage (CCUS) and clinker substitution are the most effective measures with a
reduction potential of 56% and 18%, respectively to address emissions from raw material (calcination).
JMK Research & Analytics

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 JMK Research & Analytics

Other measures to mitigate emissions from coal combustion and electricity consumption include alternative fuel replacement (reduction potential of
5%), waste heat recovery systems (4%), RE adoption (4%), and kiln electrification (6%). These in-situ measures have certain technical constraints and
economic limitations such as CCUS has a peak capture efficiency of 85% and clinker substitution is permissible upto 65% due to quality constraints
which neccessitates additional carbon offset mechanisms, such as afforestation, are required to achieve net zero in the cement sector.

Figure 10: Decarbonizing potential share of various sustainability measures

Adoption of Alternate
RE sources Fuel Clinker Substitution

8% 4% 4% 5% 6% 18% 56%

Afforestation Waste Electrification Carbon Capture and Storage

heat of kiln
recovery

Source: JMK Research

Note: The baseline numbers are considered for the year 2022

Although CCUS has the highest potential for reducing carbon emissions among available technologies , its technical maturity and implementation,
along with higher capital expenditure costs, present significant barriers to adoption. According to Niti Aayog, the cost of capturing one tonne of CO 2
through CCUS can range from Rs. 1800-2600 (US$ 21.54-31.12).

Strategies for potentially eliminating coal combustion emissions in the kiln involve electrifying the kiln and using hydrogen as fuel. Kiln electrification
although entails high capital expenditure, its operational cost is lower than CCUS. Indian companies such as Ultratech Cement and JSW Cement have
partnered with Coolbrook to implement electrified kilns at their cement plants. Concurrently, Dalmia Cement has initiated a pilot project with SaltX,
scheduled to start operations in 2024.

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 JMK Research & Analytics

Table 2: Feasibility analysis of key decarbonization measures for cement sector

Technical Feasibility Economical feasibili

ty
Ways to Deployment Capex
decarbonize Definitio Maturit Payba
n y ck
Period

2024 2050 2024 2050 2024 2024

Mixing of fly ash and slag into

Clinker substitution the cement.
Evolving Matured Medium High Low Low

Flue gases from cement kilns can be

utilized in precalciners and preheaters to
Waste heat recovery heat and dry raw materials. Proven Matured Medium High Medium Medium

Exploration of alternate fuels like tyres,

biomass and Municipal solid waste. Evolving Matured Medium High Medium Medium
Alternate fuel
Transition from fossil fuel to Renewable
sources for electricity generation
Adoption of Proven Matured Medium High Medium Medium
Renewable Energy
Electrification of kilns can eliminate the
usage of coal as energy source Nascent Evolving Low Medium High High
Electrification of kilns
Process emissions can be Captured using
CCUS technology. Nascent Evolving Low Low High High
Carbon Capture
Utilization and
Storage Substitution of coal with hydrogen
Nascent Evolving Low Low High High

Hydrogen as fuel

Source: JMK Research

Further reduction in emissions in electricity generation can be achieved by using WHRS and incorporating renewable energy
sources. The cost of generating power using waste heat recovery technology is around Rs 1.3-1.5/kWh, including depreciation and
interest. This is much lower than the cost of captive thermal power, which is Rs 4.5-5/kWh, leading to significant cost savings.
Additionally, adopting renewable energy sources such as solar and wind could result in cost savings of Rs. 3 – 3.5 per unit.

11
JMK Research & Analytics

11
 KEY DECARBONIZATION POLICY INITIATIVES
The Indian cement industry operates under the purview of the Ministry of Commerce and Industry (MOCI) and Department for Promotion of Industry
and Internal Trade (DPIIT), which serve as the primary line ministries. Regulation is primarily conducted by the Ministry of Mines and the Central
Pollution Control Board (CPCB). Additionally, other key entities within the cement manufacturing ecosystem include the National Council for Cement
and Building Materials (NCBM) and the Cement Manufacturers' Association (CMA).
Currently, the Indian government has not developed a dedicated climate change abatement roadmap for the sector. However, industry-wide policies
such as the PAT Scheme and the Fly Ash Utilization Policy indirectly impact the cement sector.

Figure 11: Timeline of Initiatives for Decarbonization in Indian Cement Sector

2009

Low
Carbon
Technology
Roadmap
Fly Ash Utilization
Policy
Perform
Achieve and
Trade (PAT)
(LTCR) for
Indian Cement 2013
Ministry of Environment, Sector
Forest and Climate Bureau of Energy
Global Cement
Change Efficiency
and
Concrete
Association

Guidelines
Usage of
on
Refuse
2025
201
Derived Fuel in
*
201
various industries Carbon Credit
Ministry of Housing Trading Scheme

Source: JMK Research

2 8
and Urban Affairs (CCTS)
Ministry of Power India
Note*: Expected Launch
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 JMK Research & Analytics

Table 3: Decarbonization policies/initiatives related to Indian cement sector

Policy Name Year Description Impact

The Ministry of Environment, Forest and Climate Change • Since the policy's introduction, fly ash utilization in
(MoEFCC) mandated 100% fly ash utilization by all the cement sector has more than doubled.
Fly Ash
2009 thermal power plants, significantly increasing its use in • In FY2022, fly ash utilization in cement was 68.82 MMT,
Utilization
Policy the cement industry. Fly ash is used as a supplementary the highest among all industries, representing about 25%
cementitious material in clinker substitution. of total fly ash consumption
Perform Achieve and Trade (PAT), a regulatory instrument
by the Ministry of Power (MOP) and the Bureau of Energy
Efficiency (BEE), aims to reduce specific energy consumption Cumulative savings under PAT cycle I, II, III :
Perform Achieve
2012 in energy-intensive industries like cement and iron & steel, • Energy Savings: 3.196 Mtoe (37.16 MWh)
and Trade
Scheme etc. During PAT Cycles I, II, and III, the cement sector achieved • CO2 abatement: 10.12 MtCO2
energy savings that were 82%, 48%, and 65% above their
respective targeted energy savings for each cycle.

GCCA India partnered with WBCSD to promote sustainable

development in the cement sector. This agreement builds • CO2 emission intensity decreased by 0.620 tCO2/tonne of
upon the Low Carbon Technology Roadmap (LTCR) for the cement in 2010 to 0.588 tCO2/tonne of cement in 2017
Low carbon 2013 Indian Cement Sector, developed by WBCSD and the Cement • WHRS capacity increase by 3-folds from 110 MW (2010)
technology (transitioned Sustainability Initiative (CSI) in 2013. The roadmap in 2013 to 344 MW (2017). By 2023, this capacity has further
roadmap (LTCR) to GCCA in projected the Indian cement industry will decrease its direct
for Indian Cement 2019) grown to 1024 MW
Sector CO2 emissions intensity to 0.35 tCO2 per ton of cement by
• Specific Energy Consumption (Electrical) decreased from
2050. GCCA has now partnered with TERI to develop an 80 kWh/t of cement (2010) to 76.6 kWh/t of cement
updated roadmap for Indian cement sector decarbonization, (2023)
including its end use in concrete.

Ministry of Housing and Urban Affairs issued guidelines on

Guidelines on using Refuse Derived Fuel (RDF) across various industries, • India's average TSR increased from 0.6% (2010) to 6% (2023)
Usage of Refuse
2018 including cement. RDF is a fuel produced from multiple types • Currently all high TSR plants (14%-30%) like Dalmia Cement
Derived Fuel in
various industries of waste, including municipal solid waste, after removing use RDF technology
non- combustible materials.

The Ministry of Power (MoP) released a draft for the India is set to establish carbon emission intensity
Draft 2023 Carbon Credit Trading Scheme (CCTS) 2023, aimed at benchmarks and three-year reduction targets for key
Draft Carbon (Expected establishing a framework for the Indian carbon market sectors, including cement. These targets will be directly
Credit Trading launch
2025) (ICM). The draft proposes the creation of a governing body, aligned with the nation’s broader commitment to reducing
Scheme
the ICM Governing Board (ICMGB). emission intensity, as pledged to the United Nations.

Source: CEA, BEE, GCCA, WBCSD, JMK Research

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DECARBONIZATION INITIATIVES BY
LEADING PLAYERS
Private sector companies dominate the Indian cement industry,
Figure 12: Cement installed capacity share by key players, FY2024
accounting for approximately 98% of the total installed capacity, while
the public sector holds the remaining 2%.14 As of FY2024, the top five
players based on cement installed capacity are: Ultratech Cement
Ultratech Cement,
Limited (22.28%), Shree Cement Limited (8.92%), Dalmia Bharat Limited 146.2, 23%
(7.06%), Adani Cement - Ambuja Cement Limited & ACC Limited (11.08% Other
combined), Nuvoco Vistas Corporation Limited (3.96%) s (Orient
Cement, India
In September 2022, Adani Group acquired both Ambuja Cement Cement, Star
Limited and ACC Limited from the Swiss firm Holcim for Rs. 51,000 Cement etc.),
209, 33%
Crore (US$ 6.4 Billion), positioning Adani Group as the second largest
player in
100%
=
India, 632 MMTPA Shree Cement,
basis installed capacity.15 56.4, 9%
Leading companies in the cement sector in India, such as Ultratech
Cement, Shree Cement, Dalmia Cement, and Adani Cement (including JK Lakshmi Cement,
Ambuja Cement and ACC), have committed to reducing their 16.5, 3%
Dalmia Cement,
emissions and achieving net-zero goals. These companies are MP Birla Cement, 44.6, 7%
20, 3% ACC
members of the GCCA (Global Cement and Concrete Association) and ,
The Ramco
have adopted emission reduction goals through the Science-Based Cements,
Targets initiative
(SBTi), which helps companies set targets in line with the Paris 22, 3% 38.6, 6%
Agreement.
JK Cement, 22.3, 4% Ambuja Cement,
31.5, 5%
Nuvoco
Vistas
Corporation, 25,
4%

Source: Investor Presentation, JMK Research

 JMK Research & Analytics

14 15
Indian Cement Review | Milestone Trends in Indian Cement Industry | March 2023 Adani Group | Adani To Acquire Holcim’s Stake In Ambuja Cements And ACC Limited | 2022

114
As GCCA members, these companies have aligned their net-zero
targets with the GCCA’s 2050 objective. Dalmia Cement, one of the
lowest global carbon emitters, aims to achieve net zero by 2040.
Another company, Nuvoco Vistas, has planned for a 2% year-over-year
reduction in carbon emissions and aligned its net-zero goal with India’s
national target of 2070.

Figure 13: Emission Intensity roadmap of leading cement players

2021 2023 2030 2050 2070

Carbon Negative by 2040

0.492 0.459 0.373

0.596 0.556 ~0.481

Net Zero by 2050

0.528 0.559 0.488 Net Zero by 2050

0.488 0.513 0.465

Net Zero by 2050

Net Zero by 2050

0.533 0.512 ~0.498

Net Zero by 2050

0.589 0.520 0.465
Net Zero by 2070

~0.485 0.454 0.402

Emission Intensity in tCO2/ tonne of cement

Source: Company Annual reports, JMK Research

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The table below provides a detailed overview of the announcements, partnerships, and investments made by leading players for decarbonising cement
production process.

Table 4: Decarbonization Technology wise Initiatives, Investments and targets planned by leading players

Technology
Company Name
Renewable Energy (RE) including WHRS CCUS

To increase RE and WHRS installed capacity Exploring CCUS in collaboration with

MoU in 2022 with Coolbrook’s Roto
share from 22% currently to 85% by 2030, companies like CarbonOrO, Coomtech,
Dynamic Heater (RDH) to electrify cement
requiring an investment of about Rs. 14000 and Fortera to capture 2.5 MtCO2
annually kiln
Cr ( US$ 1.7 billion)
by 2025

Investment of Rs. 6000 Cr (US$ 720

million) for 850 MW solar & 150 MW Wind
Planning a pilot on CCUS in collaboration
by FY2026, leading to decrease in -
with GCCA
average power cost from Rs. 6.46/kWh to
Rs. 5.16/ kWh

Investment of Rs. 1000 Cr (US$ 121 million)

Launched a CCUS pilot project with a
for 112 MW solar, 36 MW Wind & 34 MW -
potential of capturing 1.2 MtCO2 annually
WHRS by FY2025

Partnered with Carbon Clean Solutions Partnered with Sweden based company-
Target of 100% renewable
Limited (CCSL) U.K. to use CDRMax SaltX to use their electric arc calciner
consumption by 2030
Technology to capture 0.5-1 MtCO2 per technology
year

Source: Company Annual reports, JMK Research

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RENEWABLE INSTALLATIONS
The cement sector is a significant consumer of open-access renewable energy in the country. It has become essential for cement companies to utilize
renewable energy and Waste Heat Recovery Systems (WHRS) due to lower electricity cost, lower greenhouse gas emissions, and optimize operational
costs.
Typically,
in a cement company, raw materials account for 16%-18%, freight contributes 28-30%, fuel and power account for 30-35% and other expenses
like labour, maintenance, etc., account for the remaining 17-26% of the total cost. With an increase in the share of renewable energy, cement
companies can save 15%-18% on power and fuel costs. This improves their operating margins and also contributes to a substantial reduction in their
carbon footprint.16
To transition its electrified processes to renewable energy, an integrated cement plant producing 1 MMTPA requires approximately 33 MW of
renewable energy capacity. Similarly, a grinding unit producing 1 MMTPA of cement needs a renewable energy capacity of 14 MW, supported by a 4
MW/15 MWh Energy Storage System (ESS). The ESS is crucial for grinding units to meet the base load demands of their round the clock operations,
primarily due to the lack of thermal CPP.
Leading players in the cement sector, such as Ultratech Cement, Dalmia Cement, and Shree Cement, have made significant strides in renewable
energy installations. As of FY2024, these companies have installed a total renewable energy capacity of 1831 MW, with 42% of it from WHRS and the
remaining 58% from solar or wind.

Figure 14: Renewable capacity by leading players, installed (FY2024) and proposed
By FY2030
By FY2025
10%
14%
17%
1,200 % 76%
18 65% By FY2030
31%

1,000 69%
As of 100%
Capacity (MW)

June
800 39% 8%
10%
2024
11% 22%
61%
19%
600 % 70% 90%
49% 47%
40 34%
32%
400 50%
68% 7% 3%
54% 17%
50%
200 76%
108 97%
46% 1,123
499 31.7 46.2 50
890 244 202 14 108 99 133
250 185 165

RE Ultratech Cement Shree Cement Dalmia Cement

100 Ambuja Cement ACC Cement Nuvoco Vistas

Capacity (FY2021) Capacity (FY2024)

 JMK Research & Analytics

Additional Capacity Planned Capacity

WHRS Wind Capacity Solar Capacity Renewable

16
ICRA Limited | Indian Cement Sector | September 2023
 JMK Research & Analytics

CASE STUDY- SHREE CEMENT LTD.

Company Overview
Shree Cement is a major player in the Indian cement industry, ranking among the top three cement groups in the country as of FY2024, with a market
share of approximately 8% in cement production capacity. The company was established in 1979 and inaugurated its first integrated facility in
Beawar, Rajasthan, initially capable of producing 0.6 metric million tonnes per annum (MMTPA).
At present, Shree Cement's cement production capacity stands at around 60.4 MMTPA, with 56.4 MMTPA based in India and 4 MMTPA in the United
Arab Emirates (UAE). Over the past decade, the company has achieved a Compound Annual Growth Rate (CAGR) of 11.8% in production capacity.
Shree Cement boasts one of the largest captive power capacities in the cement industry, with total installations surpassing 1 GW. Approximately half
of this capacity is derived from on-site thermal coal plants, while the remainder comes from renewable sources, including waste heat recovery
systems (WHRS).

Table 5: Shree Cement Company Overview

Parameters Details

Name Shree Cement Limited

Year of establishment 1979

Market Capitalisation (FY2024) Rs. 99890 Cr. (US$ 11.96 Billion)

Number of integrated plants in India 6

Number of grinding units in India 11

Total cement production capacity in India (FY2024) 56.4 MMT

Sales Volume (FY2024) 35.5 MMT (Year-on-Year (YOY) increase-8%)

Clinker/Cement Ratio (FY2024) 64.66%

Total Income (FY2024) Rs. 20146.6 Cr. (US$ 2.43 Billion)

Net Profit (FY2024) Rs. 2469 Cr. (US$ 296 Million)

Captive power Capacity (June 2024) 1002 MW (Thermal-50.2%, RE including solar, wind- 25.45% & WHRS – 24.35%)

Carbon Emission Intensity (FY2024) 0.542 tonnes CO2/ tonne of cement

Source: Shree Cement Annual Report, JMK Research

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CEMENT PRODUCTION TREND

Shree Cement's production volume has been steadily increasing, Figure 16: Integrated and Grinding facilities of Shree cement
rising from 25 MMT in FY2019 to 34 MMT in FY2024, with a CAGR of
6.3%. Additionally, clinker production has also risen from 17.65 million
tonnes in FY2019 to 23.11 million tonnes in FY2024, achieving a Grinding Units Capacity - 33.3
MMTPA Integrated Units Capacity -
compound annual growth rate (CAGR) of 5.5%.
23.1 MMTPA
Figure 15: Annual cement production trend of Shree cement

Khushkhera – 3.5 MMTPA

60 Panipat – 1.5 MMTPA
Bulandshahr – 2 MMTPA
Cement production
Metric Million Tonnes (MMT)

Nawalgarh – 3.5 MMTPA Laksar - 1.8 MMTPA

50 Clinker production
Suratgarh – 5.4 MMTPA Aurangabad -
5.6 MMTPA
40

Jobner – 1.5 MMTPA

30
Beawar – 3.6 MMTPA
20
Purulia -
2 MMTPA
Ras – 7 MMTPA
10 Burudih - 3 MMTPA
25.06

27.69
16.56

26.36
17.65

33.98
24.11

Atagarh - 3 MMTPA
17.13

31.21
17.7

23.11
20.2

58.4

0
FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2028e
Patas – 3 MMTPA
Baloda Bazaar - 3 MMTPA

Source: Shree Cement Annual Report

Kodla – 3 MMTPA
Guntur - 4 MMTPA
Shree Cement operates facilities across India, including integrated and
grinding units with capacities of 23.1 MMTPA and 33.3 MMTPA,
respectively. The company has strategically positioned its integrated
plants near limestone reserves to ensure easy extraction of raw
Grinding Units
materials, which are then transported to its facilities via railway
Integrated Units
sidings. The diagram below illustrates the distribution of integrated
and grinding units in India along with their respective cement
production
1
 JMK Research & Analytics

capacities. Source: Shree Cement Annual Report, JMK Research

19
MANUFACTURING Overall, Shree Cement consumes 2.32 GJ/tonne of cement (644 kWh),
which comprises thermal energy consumption of 0.734 Gcal/tonne of

PROCESS AND ENERGY clinker (853 kWh) and electrical energy of 65.4 kWh/per tonne of
cement. Over the three-year period from FY2021 to FY2023, the
company reduced its specific thermal energy consumption by 6.5%
CONSUMPTION from 2.44 GJ (677.7 kWh) to 2.28 GJ (633.3 kWh) per tonne of cement,
while keeping its specific electrical energy consumption constant at
69.4 kWh.
The company's cement manufacturing capacity is divided between its
integrated facilities and grinding units. Integrated facilities Figure 18: Shree Cement's energy and emission intensity
compared with Indian and Global Average
account for 40.96% (23.1 MMTPA) of the total production
capacity, while grinding units contribute 59.04% (33.3
MMTPA).

Figure 17: Shree Cement – Share of thermal consumption and 0.58

3.0 2.86 GJ 0.6 0.583
electricity consumption

Specific Energy Consumption (GJ/tonne of Cement)

0.37 0.542
2.57 GJ
Specific Energy 2.5 0.5

Carbon Intensity (tCO2/tonne of Cement)

0.26 2.32 GJ
Energy Consumptio 0.23
Consumption n 2.0 0.4
2.5
2.32 GJ/tonne of
9.66% Cement 1.5 2.49 0.3
Specific Energy Consumption (GJ)

2.0 0.23 2.31

1.0 0.2
2.09
100% 1.5
0.5 0.1
=
109.2 PJ
1.0
(30.33 TWh) 2.09 0.0 0.0
Global Shree Global Indian Shree
Average India Average Average Cement
Cement
0.5 Average
90.34% Electricity Thermal Carbon Intensity

0.0
Source: Shree Cement Annual Report, JMK Research
energy consumption, while electrical sources contributed the remaining
Electricity Consumption Thermal Consumption 10%.

Source: Shree Cement Annual Report, JMK Research

In FY2024, Shree Cement's total energy consumption reached 109.2

Peta Joules (30.33 TWh). Thermal sources accounted for 90% of this
Shree Cement’s specific energy consumption is lower than the Drives (VFDs), and high-efficiency blowers. Similarly, the company’s
Indian average of 2.57 GJ (714 kWh) and the global average of 2.86 carbon emission intensity of 0.542 tCO 2/tonne of cement is lower than
GJ per tonne (794 kWh). This is attributed to the adoption of corresponding Indian average of 0.583 tCO,/tonne of cement.
energy efficient technologies such as WHRS, Variable Frequency
20
1
 JMK Research & Analytics

SUSTAINABILITY INITIATIVES
In line with the GCCA, Shree Cement aims to achieve full
Clinker" of the Clean Development Mechanism (CDM) run by the United
decarbonization of its cement plants by 2050. Over the past few years,
Nations. Additionally, the company has two other projects registered
the company has increased its use of green power and implemented
with the CDM – Waste Heat Recovery System (WHRS) projects at Ras in
energy-efficient practices, such as higher rate of alternative fuel and
Rajasthan, and power generation through a wind power plant at Kodla,
increased thermal substitution rate.
Karnataka.
Figure 19: Sustainability Initiatives of Shree Cement
Figure 20: Sustainability Roadmap of Shree Cement

FY2024

• Green Power - 55.9%

FY2030
• Water positivity - >7
times
• Reduction in Scope FY2050
• Alternative fuel rate -
1 GHG emissions by
>10.95%
12.7% per tonne of
Shree Cement aims to
• Blended Cement - 73.19% cement. achieve net zero by
• Thermal Substitution 2050 aligned with
• Reduction in Scope 2
Rate - 2.37% GCCA.
GHG emissions by
27.1% per tonne of
cement.

Source: Shree Cement Annual Report, JMK Research

The production of blended cement has been a crucial strategy for
Shree Cement has also embraced circular economy practices by
the company to promote a circular economy and thereby reduce
producing synthetic gypsum, achieving a water positivity rate of 7x,
greenhouse gas (GHG) emissions. The company has reduced its
and undertaken afforestation initiatives such as bamboo plantation
clinker-to-cement ratio to 62% (as of FY2023) under the project
"Optimal Utilization of
JMK Research & Analytics

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 JMK Research & Analytics

RENEWABLE ENERGY INSTALLATIONS BY SHREE

CEMENT
The
company has a diverse electricity generation portfolio, including thermal captive power plants (CPP) and renewables such as solar, wind, and WHRS.
Between 2020 to 2024, Shree Cement has significantly increased the use of green power (at a CAGR of around 20%) in its manufacturing facilities. This
substantial increase is driven by the lower capital and operational cost of RE plants vis-à-vis thermal which ultimately translates to lesser levelized cost of
electricity (LCOE). In terms of LCOE, solar (INR 2.9/kWh) and wind (INR 4.39/kWh) is 43% and 14% lower LCOE than that of coal (INR 5.11/kWh), respectively.17

Figure 21: Renewable Energy Installation Trend for Shree Cement

1400 57.53% 60%

49.80% 92
1200
Installed Capacity (MW)

43.42% 50%

Green Power Share (%)

56
1000
50 311
32.45% 34.11% 199 40%
31.54%
800 124

234 244 263 244 278 30%

600 212

400 FY2022 20%

508 508 508 503 503 503
200 10%

0
0%
FY2020 FY2021 FY2023 June 2024 FY2025e

Thermal Power Plant

WHRS Solar Wind Green Power Share

Source: Shree Cement Annual Report, JMK Research

Currently, Shree Cement is ranked second in the cement industry in terms of renewable energy installations. As of June FY2024, the total installed
renewable capacity stands at 499 MW, financed and owned as captive assets by Shree Cement. Among Shree Cement’s renewable energy installed
capacity, waste heat recovery system (WHRS) contributes 49%, solar contributes 40%, and wind contributes the rest. WHRS is present at five
 JMK Research & Analytics

integrated cement units with a cumulative capacity of 244 MW.

17
IRENA | Renewable Power Generation Costs | 2022 22
1
 JMK Research & Analytics

Additionally, the company operates ten solar plants across India, Figure 22: Shree Cement’s thermal and RE installed capacity across India (June 2024)
including on-site and off-site projects. The integrated units have
installed a solar capacity of 96.5 MW, and the grinding units have
(WHRS), 24.35%
added
102.5 MW of solar capacity.

1,00 Thermal, 50.2%

Wind, 5.58%
Table 6: Cost economics of RE power procurement models 2
MW

Solar, 19.6%

RE power Electricit
y cost Capex
procureme Details Panipat - 7.95 MW
(Rs/kWh) (Rs
nt models
Crore/MW
Nawalgarh - 33 MW Laksar - 1 MW
)
Aurangabad -
On-site solar projects are Suratgarh - 19.5 MW
3.5 – 4 40 MW
set up within the premises
On-site solar of the manufacturing unit, 1 - 1.5* (US$ 0.42–0.48
usually on rooftops. million)
Jobner - 11 MW

In the captive model, the Beawar -

RE project is set up outside Thermal - 334
the consumer premises. Solar: 4 - 4.5 MW Solar - 20 MW
Here, the end consumer (US$ 0.48–0.54 WHRS – 21 MW
Off-site solar/ invests at least 26% upfront million)
2.5 – 3*
wind (Captive) capital, pays open access Wind: 7.5 – 8 Burudih - 12 MW
(US$ 0.9–0.96 Ras -
charges, and is exempt WHRS – 100 MW Atagarh - 11 MW
from the cross-subsidy and million) Thermal - 140 MW
additional surcharge.
Source: JMK Research Jath - 16.5 MW
Note*: For RE projects entirely funded by the end consumer
Kodla - 30 MW Baloda Bazaar -
Thermal - 19 MW
Solar - 57 MW
WHRS – 60 MW
Basavana Bagewadi - 8 MW

Kushtagi - 31.5 MW
Guntur - 19.5 MW

Solar
Wind
Waste Heat Recovery system

Thermal Energy Power Plant

 JMK Research & Analytics

Source: Shree Cement, JMK Research 23

1
RENEWABLE Figure 24: Total Electricity Consumption of Shree Cement

ENERGY Discom, 22%

GENERATION
AND
CONSUMPTION
100%
Waste Heat
As of FY2024, Shree Cement's total electricity consumption stands at Wind Power Plant, 4% = Recovery System,
2.35 TWh. There has been an about 12% year-on-year increase in 2.35 TWh 44%
electricity consumption from FY2023 to FY2024. About 56% of Shree
Solar Power Plant, 8%
Cement's electricity consumption is fulfilled through renewables.

Figure 23: Total Electricity Consumption trend of Shree Cement

Thermal Power Plant, 22%
2.5 2.35 100%
2.1 90%
Electricity Consumption (TWh)

2.0 1.97 1.94

80% Source: Shree Cement Annual Report, JMK Research

70% Green Power (%)

1.5
51.10%
55.89% 60% The integrated units have waste heat recovery systems (WHRS) that
48.20% 48.30%
50% enable them to meet a significant portion of their electricity needs
1.0 from renewable energy. For example, WHRS installed at facilities in
40%
30% Beawar & Ras in Rajasthan and Baloda Bazar in Chhattisgarh meet
0.5 about 60% of their electricity consumption.
20%
10% On an average, integrated units consume 68% of electricity from RE
0.0 (including WHRS) while grinding units use 23%. The remaining 77% of
0%
FY2021 FY2022 FY2023 FY2024 energy used by grinding units comes from Discoms, indicating
significant potential for these units to fully transition to renewable
energy and highlighting the potential of RE along with ESS providing
Total Electricity Consumption Share of Green power firm power for continuous operations.
Source: Shree Cement Annual Report, JMK Research

In terms of technology usage, WHRS account for 44% of Shree

Cement's total electricity consumption, followed by solar energy at
8%, wind energy at 4%, and the remaining 44% sourced from
thermal power-based CPPs and discoms.
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 JMK Research & Analytics

To fully transition its grinding units to renewable energy, 215 MW of renewable capacity, supported by 60 MW/238 MWh of energy storage, will be
required. This transition requires an investment of Rs 1,744 crores (US$ 200 million). Switching to renewable energy is projected to result in
savings of Rs 6 to 8 per kWh compared to purchasing power from the grid.

Figure 25: Share of various sources in electricity consumption across Shree Cement manufacturing units
100% =

Patas-Maharashtra 52.52% 47.48% 53 GWh

Athagarh-Orissa 41.15% 58.85% 21 GWh

Burudih-Jharkhand 20.50% 79.50% 75 GWh

Panipat-Haryana 24.63% 75.37% 39 GWh

Aurangabad-Bihar 40.95% 59.05% 114 GWh

Jobner-Rajasthan 29.67% 70.33% 43 GWh

Laksar-Uttarakhand 4.66% 95.34% 29 GWh

Suratgarh-Rajasthan 22.26% 77.74% 90 GWh

Kodla-Karnataka 2.14%
60.49% 37.37% 206 GWh

Baloda Bazar -
Chhattisgarh 26.53% 60.54% 7.65% 5.28% 420 GWh
Beawar & 0.79%
Ras - Rajasthan 36.67% 59.80% 2.74% 1049 GWh

0 20 40 60 80 100

Thermal WHRS Solar Wind Discoms

Source: Shree Cement, JMK Research

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 JMK Research & Analytics

RENEWABLE ENERGY Figure 26: Shree Cement’s annual energy cost savings and equivalent carbon
abatement

BENEFITS Annual Energy Savings - Rs. 483-488 Crores

Annual CO2 Abatement - 1.44 MtCO2

Shree Cement has achieved significant benefits by shifting from a
traditional power mix, which relied primarily on captive coal-based
Khushkhera – N/A
power plants and grid power, to a diversified renewable energy mix Panipat - 17-21%, 6,955
Bulandshahr - N/A
including WHRS, solar, and wind power. This transition has improved
energy efficiency, enabled cost savings, and reduced carbon Nawalgarh - N/A Laksar - 3-4%, 954
emissions. Aurangabad -
Suratgarh - 16-19%, 14,256
28-34%, 33,489
In FY2024, the use of renewable energy has enabled Shree
Cement to achieve annual savings of about Rs. 483-488 Crore
Jo bner - 21-25%, 9,067
(US$ 58.90-59.51 million) in electricity costs, as well as an
annual carbon abatement equivalent to 1.44 MtCO2. On per
tonne of cement basis, this translates to cost savings of Purulia -
approximately Rs.154-156 (US$ 1.84-1.87) and abatement of N/A
Beawar &
about 0.046 tonnes of CO2. Ras- 45-44%, Burudih - 13-17%, 11,031
8,31,027
For integrated units, the benefits accrued are in comparison to Atagarh - 24-33%, 6,261
coal-based captive power plants. However, an integrated unit at Kodla
in Karnataka is an exception, as it does not have a coal-based captive Baloda Bazaar - 47-49%, 3,63,036
Patas - 34-36%, 19,878
power plant. At this location the company has achieved the maximum
savings primarily due to its ~98% renewable energy penetration
(including WHRS). Meanwhile, for the grinding units, savings are Kodla - 68-72%, 1,44,035
Guntur - 33-36%, 1,27,186
relative to the grid due to the absence of a captive power plant.

Shree Cement's integrated plant at Guntur, Andhra Pradesh, has

commissioned a 19.5 MW solar plant as of June FY2024. This initiative
will reduce electricity costs by 33-36% and abate approximately 127
thousand tCO, annually.

Source: Shree Cement, JMK Research

Note: Estimated savings against coal based captive power plant or grid based on either integrated or
grinding unit
Plant Location - Energy Cost Savings (%), CO2 Abatement (tCO2)

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 JMK Research & Analytics

BENEFITS ACCRUED FROM OTHER

DECARBONIZATION MEASURES
Shree Cement focuses on four key decarbonization strategies: utilizing renewable energy, reducing/substituting clinker, using alternative fuels and
raw materials (AFR), and improving energy efficiency. The table below provides an overview of the current status, impact, and future outlook of Shree
Cement in relation to these strategies.

Table 7: Shree Cement status and outlook on other key cement decarbonization levers

Decarbonizatio
Status Impact Outlook
n Lever

Current clinker to cement ratio stands at • Plans to reduce clinker to cement ratio
Clinker Reduction 62.1% which is 1.1% lesser from preceding Annual CO2 abatement of 7330 tCO2 to about 50% with use of Limestone
financial year Calcined Clay Cement (LC3)

Alternative fuels • GCCA mandates all its member entities

Current TSR at 3.50% for FY2023, up
and raw material Annual CO2 abatement of 85,000 tCO2 to attain 30% TSR by 2030, which
from 2.41% in FY2022
(AFR) Shree Cement is a part of

Current electricity consumption per tonne of • Addition of at least 34 MW WHRS capacity

cement is 65.4 kWh, down from 67.15 kWh in Annual CO2 abatement of 59,000 tCO2 by FY2025
FY2022

Source: Shree Cement Annual Report, JMK Research

Shree Cement has saved approximately 556 Tera calories (646 GWh) in thermal savings and about 11 GWh in electrical savings, reducing 0.15 MtCO2
emissions through its decarbonization initiatives.
Additionall
y, the company is a member of the Zero Emission Vehicles Emerging Markets Initiative (ZEV-EMI) of WBCSD and the Indian government’s E-
FAST (Electric Freight Accelerator for Sustainable Transport) initiative. The company aims to transition its trucks towards electric truck fleets by
2030.18

18
WBCSD | Advance truck electrification in India for electric freight vehicles by 2030 | 2023
JMK Research & Analytics

27
1
 JMK Research & Analytics

OUTLOOK FOR SHREE CEMENT

Shree Cement has undertaken several initiatives to reduce its emission intensity. Through the Science Based Targets initiative
(SBTi), the company aims to lower its CO2 intensity by 8%, from 0.542 tCO2 per tonne of cement to 0.498 tCO2 per tonne of cement
by FY2030. This reduction is expected to mitigate 2.5 MtCO2 of emissions by 2030. However, despite these efforts, overall emissions are
projected to increase by 37%, rising from 21.53 MtCO2 in 2024 to 29.48 MtCO2 by 2030, due to an increase of 42% in the manufacturing capacity.

Shree Cement will need to invest more than US$27 billion to achieve full decarbonization by the year 2050. The company has begun a pilot CCS
project to capture and utilize up to 1.2 million tonnes of CO2 annually and is also looking to expand its renewable energy capacity significantly to 681
MW by FY2025. Additionally, the company aims to transition its fleet to fully electric vehicles by 2030 as part of its comprehensive decarbonization
strategy.

Expansion of Installed Renewable Energy Capacity including WHRS

Shree Cement is planning to expand its current installed renewable energy (RE) capacity. This expansion entails a capital expenditure of Rs. 1000 Cr
(US$ 121 million) for adding 132 MW of solar capacity across various locations including Jharkhand, Haryana, Rajasthan, Uttar Pradesh, and
Uttarakhand. Each new or existing manufacturing unit will include on-site RE capacity to meet a portion of its energy requirements. The company also
aims to increase its wind portfolio from 56 MW to 92 MW, with a 36 MW addition in Rajasthan. Additionally, Shree Cement plans to install 34 MW of
waste heat recovery units in Karnataka and Rajasthan.

Other decarbonisation efforts

Shree Cement plans to improve energy efficiency by increasing the use of TSR (thermal substitution rate) and clinker substitution methods. In line with
GCCA (Global Cement and Concrete Association) objectives, the company aims to boost the use of alternative fuels such as biomass, agrohusk, and
RDF (refuse-derived fuel). Under GCCA India all member entities, including Shree Cement, to achieve a 30% TSR by 2030, although this appears to be
challenging. Additionally, the company plans to focus on circular economy principles by increasing the utilization of municipal solid waste (MSW) as
RDF in all integrated locations and boosting the use of synthetic gypsum.

Green Logistics
Shree Cement has joined the ZEV-EMI initiative and the E-FAST platform, led by NITI Aayog and supported by the World Resources Institute (WRI)
India, in 2023. The initiative forecasts a demand for more than 5000 e-trucks in India by 2027, and around 7700 e-trucks by 2030. As part of this
initiative, Shree Cement has committed to reducing carbon emissions in its fleet operations by electrifying its logistics trucks by 2030.

128
 JMK Research & Analytics

WAY FORWARD
The Indian cement industry has witnessed a significant uptake of renewable energy, driven primarily by the potential of reducing power and fuel costs.
As of FY2024, the industry has installed over 1800 MW of renewable energy capacity. Looking ahead, cement sector companies aim to increase their
renewable energy capacity to more than 2.4 GW by the end of 2026. The increasing cost-effectiveness of solar and wind power compared to grid
power has facilitated these renewable installations. However, a complete transition to renewable energy requires ESS to ensure reliability. The solar +
storage cost of Rs. 5.1/kWh as of 2024 is already comparable to the cost of power from new coal plant with a cost of Rs. 5.6/kWh. By 2030, the price of
solar + storage will further decrease to approximately Rs. 4.5/kWh. With storage playing a crucial role, JMK Research has analysed three separate
scenarios to estimate the RE capacity of the cement sector by 2030.

Figure 27: Expected RE installations in Cement Industry in various scenarios by 2030

US$ 4 billion
5,000
Solar (MW) Energy Storage System (MWh) Investment (US$ billion)

Wind (MW) Energy Storage System (MW)

4,000
Capacity (MW/MWh)

US$ 2.2 billion

3,000
US$ 1.9 billion

2,000

1,000

0
Electricity Consumption in grinding units
Electricity import from discoms and coal based No new additional coal based power
are shifted to RE
captive power plants is transitioned to RE plant capacity commissioned
Source: JMK Research analysis

• Electricity Consumption in Grinding units is shifted to RE: Shifting the electricity requirements of standalone grinding units to renewable
energy represents a strategic low-hanging fruit opportunity for the cement industry. This transition would require 1.9 GW of renewable energy and
538 MW of ESS.
• Electricity imports from Grid, in cement sector is completely shifted to RE: Shifting the procurement of grid electricity to renewable
sources enables reduction of cement plant's carbon footprint and operational costs, as grid electricity is typically the most expensive energy
source. By 2030, this transition can lead to the integration of 2.3 GW of renewable energy and 633 MW of energy storage into the cement industry.
129
• No new additional thermal Captive Power Plant commissioned: To attain decarbonization goals, cement companies must shift from
their heavy reliance on thermal Captive Power Plants (CPPs). A strategic shift by forthcoming cement plants towards procuring green firm power,
rather than establishing new thermal CPPs, is projected to contribute significantly to renewable energy expansion, potentially adding 4 GW of
renewable energy capacity and around 1 GW of energy storage by 2030.

The analysis projects that by 2030, the Indian cement sector will integrate an additional 4-5 GW of renewable energy capacity (including energy
storage), necessitating an estimated investment of over US$ 4 billion. Electrification of the rotary kiln, an emerging solution currently being developed,
has the potential to increase this capacity multi fold. If even 10% of rotary kilns are electrified by 2030, the potential for renewable energy capacity
additions could exceed 10 GW. A rapid fall in storage cost and a conducive policy at the ground level will lead to mass adoption of ESS, which
facilitates the net zero commitments from the Industry.
The cement sector has been at the forefront of adopting energy-efficient technologies and renewable energy compared to other industrial sectors,
primarily due to having a dedicated roadmap mapped according to the Sustainable Development Goals (SDGs). Despite the lack of direct government 1

initiatives, the Indian cement industry matches or exceeds the global average in energy efficiency and carbon emissions, owing to this strategic
roadmap. Leading players in the cement industry are targeting net-zero by 2050, ahead of any other sector in the country. Consequently, the 1

decarbonization efforts within the Indian cement sector will serve as a benchmark for other energy-intensive industries, guiding the Indian economy
toward a net-zero and self

31
0