ICRA Forecasts Cement Companies to Achieve 42% Green Power Usage by FY2025


Major players in India’s cement industry are embarking on an ambitious journey to reduce their emissions by 15-17% over the next 8-10 years. This reduction will be achieved by increasing the utilization of blended cement, which contains less clinker and, consequently, requires less fuel. In addition to this, the industry is actively boosting its consumption of green power through solar, wind, and waste heat recovery system (WHRS) capacities, as well as shifting towards alternative fuels.


Ms. Anupama Reddy, Vice President and Co-group Head at ICRA, provided further insights into these initiatives. She revealed that the capital investment for the expansion of green power capacities, totaling 537 MW (comprising solar and WHRS), is projected to reach approximately Rs. 5,500 crore in the next two years. This financial commitment is expected to yield significant annual savings of around Rs. 2,000 crore in power costs for these cement companies once the green power facilities become fully operational.

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The cement industry is known for its high energy consumption and ranks among the largest coal consumers, second only to the iron, steel, and thermal power sectors. Traditionally, electricity for cement production has been sourced from the state grid and coal-based captive thermal power plants. Cement production also involves substantial coal usage during the clinkerisation process, resulting in greenhouse gas emissions with adverse environmental impacts.


ICRA anticipates that the percentage of blended cement in the product portfolios of major cement companies will rise from 77-79% in FY2023 to 80-82% over the medium term. Furthermore, companies are focusing on increasing the proportion of Portland Slag Cement (PSC) due to its lower clinker factor resulting from higher slag usage, which contributes to reduced emissions.

The transition towards green power is expected to decrease the cement industry’s reliance on high-cost thermal power and the grid for its energy needs. This shift will not only reduce operational costs but also lead to a significant reduction in the industry’s carbon footprint. Ms. Reddy emphasized that replacing 25% of thermal power consumption with green power sources could yield cost savings of approximately 15-18% and enhance operating margins by 140-160 basis points for cement companies, while simultaneously contributing to environmental sustainability.

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The Indian cement industry’s commitment to reducing emissions through these measures reflects a broader industry trend towards environmental responsibility and sustainability.

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