Niti Aayog sees cement output at 660 million tonnes by 2030. Process emissions resist cuts. LC3 offers a path, but the market does not reward low carbon. UltraTech, Dalmia Bharat, Shree Cement face demand inertia risk.
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India's cement production is set to climb sharply. Niti Aayog projects output rising from 391 million tonnes in 2023 to around 660 million tonnes by 2030. Even with falling emissions per tonne, total carbon output will keep climbing because the chemistry of cement makes it one of the hardest sectors to clean.
More than half of the industry's emissions come from the chemical reaction that forms clinker, the binding ingredient. Switching to renewable electricity for heat cannot eliminate those process emissions. The industry has already cut energy use sharply over the past two decades through waste heat recovery and blended cements, the Global Cement and Concrete Association report notes. Efficiency gains are now reaching their limits.
India's most promising low-carbon alternative is limestone calcined clay cement, or LC3. Developed with IIT Delhi and IIT Madras, it replaces a large share of clinker with widely available calcined clay and limestone. UltraTech and Dalmia Bharat have started investing in lower-clinker products and renewable energy. Shree Cement has focused on improving energy efficiency and increasing renewables across its operations. These moves depend on a market that values lower carbon. At the moment, the cheapest upfront price wins most contracts, the report says.
The bigger risk lies in two trends. Carbon capture remains too expensive and commercially uncertain for India. The country lacks transport networks and storage infrastructure needed to deploy it at scale. And the industrial by-products that help reduce clinker today – fly ash from coal plants and slag from steel mills – could grow scarcer as those sectors decarbonize. That makes LC3 even more critical, the report argues.
Government procurement shapes the demand side. Public agencies are among the country's largest cement buyers for highways, railways and ports. They rarely specify low-carbon products in tenders. India's carbon credit trading scheme is an early step. Without procurement standards and clearer price signals, the scheme alone is unlikely to shift investment, the report says.
For investors in UltraTech, Dalmia Bharat and Shree Cement, the key variable is how fast the market starts rewarding cleaner production. Faster adoption of LC3 and a shift in public procurement would reduce the risk. Continued reliance on subcontractors who pick the cheapest cement would widen the gap between production growth and emissions targets. The financial risk of stranded assets or higher carbon costs would grow over time.
"India has the technology to decarbonize it by using cleaner cement," the report states. "Now, the country must create a market where producing it becomes a smart business decision."
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