Decarbonizing Cement: Opportunities for Startups

Decarbonizing Cement: Opportunities for Startups

Decarbonizing Cement: Opportunities for Startups

Cement production accounts for nearly 6% of India’s carbon emissions. India’s demand for cement will only grow, driven by rising infrastructure projects and housing needs.  Cement companies have set sustainability targets—and meeting these green goals requires innovative solutions.

For startups, this presents significant opportunities. However, bold sustainability announcements don’t always translate into clear openings.  Understanding industry priorities and targeting gaps where viable solutions are missing is crucial for success.

We analysed the annual reports and public documents of India’s top five cement companies (UltraTech Cement Limited, Adani Group (Ambuja cement and ACC), Shree Cement Limited, Dalmia Cement (Bharat) Limited to uncover their sustainability strategies, progress, and the opportunities ripe for climate-focused innovation. Here are the key takeaways:

Sustainability targets of top five cement companies

  1. Cement industry is consolidating with large players acquiring small capacities to improve their market share and cost structures.  The top five cement companies control nearly 50% market share. With deeper pockets, these companies are better equipped to invest in green technologies—but they are not in a rush to adopt these technologies.
  2. Cement companies are targeting net-zero emissions over the next two decades, giving them ample time to pace their sustainability initiatives. Their proposed emission reduction in the next 5 years is only 20%, which can come from solutions such as renewable energy deployment, reduction in clinker factor and substituting coal with alternate sources. More expensive technologies such as carbon capture and hydrogen adoption are not currently prioritized.

This blog explores the environmental challenges of the cement industry, the targets set by major players, and the opportunities for climate-focused startups to make an impact.

Where are cement’s environment footprints coming from?

Cement production involves heating limestone (CaCO₃), which releases carbon dioxide (CO₂) as it breaks down into calcium oxide (CaO). This calcium oxide is mixed with other materials like bauxite and clay to produce clinker, the primary ingredient in cement. The process uses a lot of coal for heating and also significant amount of water. The major environmental impacts of cement production include:

  • Clinker production: The largest source of CO₂ emissions, lower clinker in cement reduces energy requirements as well as emissions
  • Coal usage: A primary energy source, lower coal means lower emissions
  • Water consumption: Essential for cooling, dust suppression, recycling and monitoring water consumption can reduce water risk

Industry’s decarbonization priorities can be seen from the picture below, which captures Ultratech cement’s short term and long-term plans. As can be seen, short-term targets include a reduction in clinker usage and increasing alternate fuels. Carbon Capture and utilization (CCUS), kiln electrification and use of Hydrogen feature in the long-term plans.

Where are the opportunities for climate startups?

Given the priorities of cement companies, here are a few opportunities that may see traction.

1. Biomass and alternate fuels to Increase Thermal substitution ratio

Thermal substitution refers to replacing coal with environment-friendly fuels such as biomass and municipal solid waste. Cement companies are targeting to increase the use of alternate fuel by five times; however, they currently face several challenges in handling such fuels including

  • Getting alternative fuels at a price that competes with coal.
  • Managing the moisture content of such fuels.
  • Building material handling systems for pre-processing and homogenization of fuels.
  • Improving combustion efficiency.

While a few startups like Biofuels Junction and Biofuels Circle are tackling supply chains of Agri based biofuels, fewer players streamline MSW-based fuels. Any innovation towards increasing the usage of alternate fuels should find acceptance.

2. Digitalisation to monitor water, supply chain and carbon footprints

Cement production is water-intensive, requiring nearly 200 Liters of water per ton for dust suppression, cooling. Historically, water shortages were not an issue, so water maintenance and monitoring systems remained basic. However, with depleting water tables and the industry’s commitment to becoming water positive, there is significant potential for digital water monitoring and reporting systems to help reduce water usage. 

Another interesting opportunity lies in monitoring carbon emissions across processes, equipment, and plant levels. Such systems could help companies earn carbon credits and participate in domestic carbon markets that are likely to be created soon. The industry already has a track record of having participated in PAT scheme (earlier version of carbon trading scheme, perform, achieve and trade scheme), when it set up waste heat recovery plant to avail credits under PAT. Cement companies are also looking to digitise their raw material procurement and transport of cement and clinker to reduce their carbon footprints.

3. Solutions to lower clinker factor

Lowering clinker factor is the strongest lever to reduce carbon emissions.  Clinker usage can be reduced by adding different materials such as limestone, and slag and such cement is called blended cement.  While, most large Indian companies have already reduced clinker ratios significantly, there could still be avenues for developing grinding aids—chemicals that enhance cement performance while allowing manufacturers increase the use of alternate materials like fly ash, and slag. For instance, UNISOL has been supplying grinding aids to cement producers for over a decade.

Other area could be developing additives that help in making reducing cement proportion in concrete. A few material science startups, such as Nanospan, are already creating additives for AAC blocks and concrete.

Cement decarbonization offers numerous opportunities, which will increase significantly as domestic carbon markets develop further. Startups that can reduce costs for the industry and navigate long approval processes are best positioned to succeed in this sector.

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