Cement Industry Carbon Footprint: Sources, Challenges, and Decarbonisation Pathways

India's cement sector is the world's second largest by production volume and one of its most carbon-intensive industries. Cement manufacturing accounts for approximately 7–8% of India's total CO2 emissions, and the sector is one of the first to face binding emission intensity targets under India's Carbon Credit Trading Scheme (CCTS). For Indian cement companies, the combination of CCTS compliance, CBAM exposure for any future exports to the EU, and investor and buyer pressure on ESG performance makes decarbonisation strategy an urgent business priority.

Where Cement Emissions Come From

Cement emissions have two distinct sources. Process emissions account for approximately 60% of a cement plant's CO2 output: they come from the calcination of limestone (CaCO3) to produce clinker, which releases CO2 as a chemical byproduct regardless of what fuel is used. Energy emissions account for the remaining 40% and come from burning fuels (coal, petcoke, natural gas, alternative fuels) to reach the kiln temperatures required for clinker production. Because process emissions are inherent to the chemistry, not the fuel, cement is considered one of the 'hard to abate' sectors where decarbonisation requires either clinker substitution, carbon capture, or a fundamental change in chemistry.

Practical Decarbonisation Levers for Indian Cement

The most practical near-term decarbonisation levers for Indian cement companies are: clinker-to-cement ratio reduction (using supplementary cementitious materials like fly ash, slag, and calcined clay to replace clinker — India's use of blended cements already gives it a lower average emission intensity than global peers), fuel switching to alternative fuels and waste-derived fuels, energy efficiency improvements in grinding and thermal processes, and renewable electricity procurement for electrical processes. Carbon capture and storage (CCS) is the long-term solution for process emissions but remains commercially unproven at scale in India.

Carbon Credits in Cement's CCTS Strategy

Under CCTS, cement plants that beat their emission intensity target can earn Carbon Credit Certificates. Those that fall short must purchase them. Given the wide range of emission intensities across India's cement fleet — from modern integrated plants with high blended cement ratios to older wet process plants — there will be both significant credit generators and significant credit buyers in the sector. Developing a CCTS compliance strategy that accounts for this variability across a multi-plant portfolio is one of the most common advisory engagements Csquare undertakes for Indian cement companies.