The decarbonisation of the cement industry is key for India to meet its climate targets. Accounting for nearly 5 per cent of the country’s greenhouse gas emissions, the sector is among the most challenging to decarbonise. This forum discusses several solutions that can help decarbonise the cement industry, including clinker substitution, the uptake of alternative fuels, a shift from roads to railway transport and the adoption of decentralised green hydrogen solutions for cement manufacturing…
M.M. Rathi
The narrative of the cement industry in India is being rewritten. Long synonymous with nation-building, the industry now faces a dual mandate: to drive the country’s infrastructure ambitions while spearheading its climate transition. This is not a contradiction; it is the defining strategy for a hard-to-abate sector. With approximately 60 per cent of emissions from clinker production and 30 per cent from logistics, the cement industry’s path to net zero requires a clear-eyed strategy that balances immediate, viable interventions with long-term technological bets.
Rethinking the molecule
The heart of the cement industry’s emissions challenge lies in clinker, the essential binding agent in cement. The high-temperature chemical process involved in creating it is inherently carbon-intensive. While the direct electrification of kilns remains impractical, we have two powerful levers at our disposal: clinker substitution and fuel transition.
The most effective immediate strategy is reducing the clinker-to-cement ratio using supplementary cementitious materials like fly ash, slag and calcined clay. At Shree Cement, this philosophy is central to our product strategy – we are re-engineering our blended cements to deliver superior durability with a lower carbon footprint, aligning environmental responsibility with market demand.
Simultaneously, we are moving from coal to alternative fuels, including refuse-derived fuel and biomass – a critical step towards circularity. While government support is encouraging, scaling this requires robust supply chains and significant capital for kiln upgrades. Alongside this, investments in waste heat recovery systems have become a necessity, offering dual benefits for emissions and operating expenditure. We continue to monitor global advancements in carbon capture and storage, but pragmatically view it as a long-term technology, not an immediate solution, due to its prohibitive cost.
Bridging the last mile: Reinventing our logistics
Beyond the factory gates, our supply chain is the second frontier of decarbonisation, with a heavy reliance on road transport. The most impactful shift we can make is from road to rail, which emits up to 75 per cent less carbon per tonne-km. At Shree Cement, we are investing in integrated rail infrastructure, including sidings, to connect our plants directly to India’s expanding freight corridors.
For shorter distances, fleet electrification is becoming a viable reality, and we are strategically evaluating its deployment as battery technology and charging infrastructure mature. In the interim, digital platforms for route optimisation and intelligent load planning are making our supply chain more efficient and less fuel-intensive today.
Catalysts for change: Policy and smart capital
Technology and operational shifts are insufficient without a supportive ecosystem. Forward-thinking policy and strategic finance are the true catalysts for accelerating the energy transition. India’s emerging carbon market, production-linked incentive schemes for green technology and renewable energy mandates provide clear, positive signals for investment.
However, decarbonisation demands immense capital. While environmental, social and governance-focused financing is giving sustainability a competitive advantage, the business case for large-scale projects like green hydrogen or comprehensive fleet overhauls must continue to be strengthened. Unlocking new pools of capital through green bonds and concessional financing is crucial for de-risking these vital investments.
A call for collaborative action
Decarbonising India’s cement sector is a multi-decade journey. Our immediate priorities are clear: maximise clinker substitution, accelerate the alternative fuel transition and build intelligent, rail-centric logistics. The emissions from power consumption within the cement industry may seem modest, but its importance lies in its solvability. Cement manufacturers in India are well placed to leverage the latest technology to reduce their electricity-related emissions. This is about more than meeting regulatory demands; it is about securing the industry’s future in a world that increasingly values sustainability. By adopting renewables, optimising efficiency and leveraging policy support, the cement sector can transform into a story of progress. With solutions at hand and global expectations rising, the moment to power a cleaner cement industry is here.
This systemic transformation demands collaboration between manufacturers, policymakers, technology providers and financial institutions. By working together, we can ensure that the cement that builds a stronger India also builds a greener planet.
Dr Debajit Palit and Ankusman Saikia
The recently released Annual SDG Performance Report by the United Nations’ Sustainable Development Solutions Network shows that, for the first time, India has entered the top 100 countries in the annual Sustainable Development Report, which assesses progress on the 17 Sustainable Development Goals (SDGs). India ranked 99th out of 167 nations in the 2025 report, up from 109 in 2024 and 112 in 2023. However, the country’s performance on SDG 13 (Climate Action) has declined, particularly because of its poor rating in the fossil fuel combustion and cement production sectors. India’s per capita carbon dioxide (CO2) emissions from fossil fuel combustion and cement production remain substantial, underscoring the importance of decarbonising the cement industry.
Cement industry’s decarbonisation challenge
The Indian cement industry, responsible for nearly 5 per cent of the country’s greenhouse gas emissions, relies heavily on high-temperature thermal processes, especially in clinker production. India is the second largest cement producing country in the world, accounting for roughly 8 per cent of the total installed capacity, which is almost entirely privately owned. As per a recent market study by the India Brand Equity Foundation, the country’s cement demand is projected to grow at a rate of 7-8 per cent in FY 2025, with total consumption expected to reach 450.78 million tonnes (mt) by FY 2027. The industry is also targeting a long-term installed capacity of 850 mt per annum by 2030, driven by infrastructure investments and housing demand. As both global and domestic pressure increases to decarbonise the hard-to-abate sectors, the cement industry must transition to clean and sustainable energy sources. Among the emerging alternatives, decentralised green hydrogen offers a technically viable and strategically aligned solution to replace fossil fuels in the thermal operations of cement manufacturing. A recent study by The Energy and Resources Institute also suggests that green hydrogen could account for nearly 50 per cent of the fuel mix in the sector by 2070.
Presently, coal and petroleum coke remain the primary fuels used across most cement plants, accounting for most of the energy input due to their high calorific value and established supply chains. Traditional alternatives, such as electric heating, fall short of delivering the ultra-high temperatures (~1,400-1,500 °C) required in clinker kilns, while biomass suffers from feedstock inconsistency, land use conflicts and ash disposal issues. In contrast, hydrogen allows for precise thermal control, helping optimise specific energy consumption (SEC). When produced from co-located renewable energy, it minimises transmission losses and offers significant operational flexibility, giving it an edge over grid-based electric heating systems.
The application of decentralised green hydrogen in cement processes offers several thermodynamic and operational advantages. Hydrogen combustion provides high-grade heat suitable for kilns and pre-calciners, eliminating direct CO2 emissions from fossil fuel use and supporting the broader decarbonisation of the cement industry. In fact, calcination alone accounts for over 60 per cent of the total emissions. Green hydrogen-based heating can lead to reductions in SEC through cleaner, more controlled thermal profiles. These benefits can translate to long-term cost savings and resilience against fossil fuel price volatility.
Potential for green hydrogen
To understand where decentralised green hydrogen deployment for the cement industry is most viable in India, we undertook a study applying the weighted potential method (WPM) to evaluate wind-solar hybrid (WSH) potential across different Indian states. WPM is a structured, scoring-based technique that integrates multiple resource criteria into a single composite index, enabling the relative comparison of alternatives based on their suitability. Each input parameter is assigned a weight proportional to its significance in achieving the overall objective, allowing for a nuanced assessment that reflects varying degrees of influence.
Solar irradiance and wind speed were considered the primary inputs for the study, weighted in a 60:40 solar-to-wind ratio aligned with the frameworks considered by the Solar Energy Corporation of India for its tenders, aimed at maximising the capacity utilisation factors. The preference for WSH over standalone solar or wind stems from the requirement for a consistent, round-the-clock electricity supply to electrolysers, which perform optimally under stable input conditions. Given the diurnal and seasonal variability of solar and wind resources, respectively, their combination enhances temporal complementarity and operational reliability. This hybrid configuration allows for more efficient utilisation of renewables, providing a stable and predictable power profile well suited to decentralised green hydrogen production. Battery storage, which is typically used alongside WSH systems, was not considered because green hydrogen itself serves as a storable energy vector. Once produced, hydrogen can be stored and used on demand, making it more suitable and cost-effective for continuous thermal applications.
Among Indian states, the analysis identifies Gujarat, Rajasthan, Karnataka, Andhra Pradesh, Maharashtra, Tamil Nadu and Telangana as high-potential states. These states combine strong solar irradiance with consistent wind patterns, ideal for longer duration electrolyser operation. Significantly, many leading cement manufacturing clusters are also situated in these states, making them strong candidates for decentralised green hydrogen adoption. In contrast, states such as Chhattisgarh, Jharkhand and Odisha, despite their industrial activity, face limitations due to low wind potential and seasonal solar variability.
India’s evolving policy landscape further supports the integration of green hydrogen into industrial processes. Green hydrogen adoption complements compliance under the Perform, Achieve, Trade scheme by reducing SEC and aiding in meeting energy efficiency targets. It also strengthens India’s industrial competitiveness, considering the European Union’s Carbon Border Adjustment Mechanism, which may penalise carbon-intensive exports. Moreover, the forthcoming Carbon Credit Trading Scheme is expected to incentivise early emission reductions through financial returns.
Challenges in adoption
Despite its potential, green hydrogen deployment in India faces significant economic and logistical challenges. The current levellised cost of green hydrogen stands at approximately $3.5-$5 per kg. India’s recent green hydrogen price discovery through a reverse auction conducted by Indian Oil Corporation Limited at Rs 397 per kg (about $4.67 per kg) is being seen as a turning point. Although this price is competitive, given the nascent stage of the industry, various reports indicate that achieving cost parity with conventional fuels may require a 35-40 per cent reduction in electrolyser capital cost, along with a 12-14 per cent improvement in conversion efficiency. On the positive side, a recent report by the Institute for Energy Economics and Financial Analysis indicates that the cost of green hydrogen could fall by up to 40 per cent with the support and incentives being provided by the Indian government. For widespread adoption, the cost curve for green hydrogen production must also decline, like the trends observed in the solar and wind sectors.
Additionally, water availability presents a critical challenge. Roughly, 9 litres of water are needed to produce a kg of hydrogen. This becomes particularly concerning in arid regions such as western Rajasthan, where renewable energy potential is high but freshwater resources are scarce. To mitigate this, wastewater recycling and reuse must be explored.
Furthermore, to achieve the energy transition, cement manufacturers will need to invest in electrolyser systems, hydrogen-compatible burners, storage facilities and safety infrastructure. Site-specific feasibility studies must include water resource assessments to ensure sustainable hydrogen production.
The demand-side gap will also have to be addressed. While recent policies such as the National Green Hydrogen Mission have focused primarily on production-linked incentives and supply-side readiness, there is limited clarity on mechanisms to drive industrial demand, especially in hard-to-abate sectors like cement. The absence of assured offtake frameworks, purchase obligations and clear market signals continues to deter large-scale private sector investment. This lack of demand visibility creates uncertainty around long-term commercial viability, slowing the momentum needed for early deployment of decentralised green hydrogen solutions in energy-intensive industries.
A strategic way forward
A phased and spatially optimised approach is recommended. Pilot projects in Gujarat, Maharashtra and Tamil Nadu – regions that offer both high WSH potential and sufficient water access – can serve as technological and financial test beds. Over time, as electrolyser costs decline and innovations such as seawater electrolysis mature, the viability of decentralised green hydrogen may expand to resource-constrained states as well.
Decentralised green hydrogen presents a realistic and future-aligned solution for decarbonising the cement industry’s thermal energy demands in India. Given the continued drop in the cost of solar power, the marginal cost of green power is headed to “zero”. The ability of this “zero” cost electron to economically split a water molecule and create green hydrogen in the future is just a matter of time. The combination of solar and wind power, coupled with green hydrogen, thus opens unprecedented possibilities for India. By strategically aligning hydrogen production with regional renewable potential and embedding supportive policies, India’s cement sector can reduce fossil fuel dependency, enhance energy efficiency and contribute meaningfully to achieving the SDGs, moving decisively towards the vision of Viksit Bharat by 2047. n
(The views of Dr. Debajit Palit and Mr. Ankusman Saikia are personal.)
