ICRA estimates every 5% increase in green power replacement to lead to savings of ~Rs. 15-16/MT. A 25% replacement can potentially reduce power and fuel costs by Rs. 75-80/MT and support OPBDITA margin expansion by 140-160 bps. The highly energy-intensive nature of cement manufacturing, coupled with elevated fuel cost volatility arising from the West Asia conflict, is accelerating investments in green power as a commercially viable decarbonisation and cost-mitigation strategy. Consequently, leading cement companies have outlined net-zero emission roadmaps over the next 15-20 years.

• The cement industry is pursuing multiple decarbonisation levers, including green power adoption, an increase in the share of blended cement, the use of alternative fuels and improvements in clinker efficiency.
  
• Green financing is emerging as an important enabler of cement sector decarbonisation, supporting investments in renewable energy, waste heat recovery systems (WHRS), alternative fuels and other sustainability initiatives.
  

Source: ICRA Research; The thermal substitution rate (TSR) is the percentage of total thermal energy in an industrial process (like cement manufacturing) supplied by alternative fuels (such as biomass and waste) instead of fossil fuels