The continued rise in coal and petcoke prices has resulting in an increase in demand for alternative fuels (AF) from the Indian cement sector. Research by Antique Stock Broking (ASB) reports that imported coal and petcoke made up a 60 per cent share of fuel costs in 2021-22, while AF and captive coal is expected to rise to a 25-30 per cent share over the next three to four years from a current estimated market share of 10 per cent.

By growing the share of AF, Indian cement producers could recoup cost savings of INR100-150/t (US$122-182/t) of cement produced, says ASB. Costs are expected to fall by 25 per cent for cement manufacturer for those that can switch to AF usage compared to the current spot price of imported fuel. The surge in imported fuel prices has compelled Indian cement producers to turn to AF.

Geoclean and Bubble barrier
Indian cement manufacturers are also looking to manage consistent availability of AF by entering into medium-term contracts. Adani Cement intends to drive AF usage having launched Geoclean in December 2022, its new waste management arm that was formerly Geocycle. This business will emphasis circular economies and conserving natural resources.

Adani Cement subsidiaries' ACC Ltd and Ambuja Cements have targeted a 30 per cent AF share for fuel consumption by 2027 from six per cent previously, or approximately co-processing 3.7Mt of AF. Geoclean operates 14 co-processing facilities in India.

The company is also exploring new approaches to waste collection. It intends to remove 2400t of plastic waste annually from the Mantola canal in Agra, Uttar Pradesh, using its bubble barrier technology. The bubble barrier is generated using compressed air passing through tubes, which are placed at the bottom of the canal to trap the plastic waste. These tubes are connected with a compressor which is powered by renewable solar energy.

After the success of the first Bubble barrier project a second project has been commissioned in BBB Lake, Sunder Nagar, Himachal Pradesh. This second project will aim to remove 1500tpa of waste plastics which will then be sorted before being co-processed in ACC's kilns.

Meanwhile, JK Cement has targeted reaching 35 per cent thermal substitution for AF by 2030 from its current 12 per cent. Shree Cement and JK Lakshmi Cement have targeted 15 per cent thermal substitution rates for AF by 2024 from less than five per cent currently.

Renewables and WHR
A second noticeable trend is an increase investment in solar energy and waste heat recovery systems (WHRS). Green and renewable energy is forecast by ASB to rise to more than a 40 per cent market share, in the next three to four years, for the Indian cement sector, from less than 20 per cent currently.

Shree Cement leads the way with a 53 per cent share of green energy, while Dalmia (Bharat) Cement, JK Cement and UltraTech Cement aim to increase their share to 100, 75 and 50 per cent, respectively, by 2030 from 17, 43 and 18 per cent currently. ACC and Ambuja Cements are aiming for 40 per cent by 2027 from their current levels of seven and eight per cent.  In October 2022, ACC partially commissioned WHRS projects at Jamul and Kymore plantsand Chanda and Wadi are the locations of its next WHRS projects.

UltraTech Cement aims to reach a green energy mix of 34 per cent by 2024. At the start of 2023 it had 510MW of green energy capacity which included 191MW of WHRS and 319MW of contracted renewable energy.

Summary
While AF usage in India's cement sector is expected to rise it does not come without costs and challenges. Cement producers encounter equipment costs for segregation and processing of waste before they can turn to co-processing. AF together with renewable electricity (for meeting up to 30 per cent of electricity needs) and battery energy storage systems currently have an estimated cost of CO2 abatement of US$40/t according to research by the Climate Policy Initiative (CPI). Use of AF at a thermal substitution rate of 25 per cent also has a high cost of CO2 abatement per tonne of cement, because of extra storage costs and segregation costs. However, these options can cumulatively reduce CO2 emission intensity by around 15 per cent says the CPI and appear an attractive alternative to continued reliance on rising fossil fuels prices at present.