Rakesh BhargavaChief Climate & Sustainability OfficerShree Cement Ltd.

Sustainability in Cement Industry

Indian Cement Industry - A Snap Shot

Introduction

• World’s largest producer after China

• Installed Capacity: Mar’13~ 336 Mn Ton

• Capacity grew at a CAGR of 11.5% from

179 Mn Ton FY07 to 336 Mn Ton in FY13

• Employs more than 1.2 lakh people

• Produces more than 3000 MW of Captive Power

• Low Per Capita Consumption 190 kg vs 514 kg for World.

World Cement Production 2012

3.6 Billion Tonnes

Source: IMF World Economic Outlook 2013, April 2013

India 6.6% of World

production

Growth of Indian Cement Industry

*Estimated

Source: CMA

Production Capacity Share : Major Groups

Suppliers Manufacturers & Distributors Customers

Raw Materials Logistics Manufacturing Storage Mktg &

Sales Usage Disposal

Energy Consumption

Water Consumption

Material & Resource

Management

GHG & other emissions

Waste management

& Reuse

Collaborative Agenda Across the Value Chain

Self driven agenda within Cement Sector: To Promote Sustainable and Responsible Manufacturing

Efficiency Matrices across the

value chain

Continually working towards sustainable cost advantage

Sustainability in Cement Industry

• Generating Green Power G• Reducing reliance on Fossil FuelR• Enhancing share of Alternate Raw MaterialE• Enabling Water ConservationE• New Benchmarks in Energy EfficiencyN

• Contributing to Social DevelopmentC• Effective Transparent ReportingE• Membership of Global Sustainability InitiativesM• Environment/Biodiversity Protection, R&D InitiativesE• Negating Impact of Global EmissionsN• Targets of Sustainability for 2050T

Presentation SequenceSustainability in Cement Industry

8 Contd.

Green Power (Waste Heat Recovery Power Plant)

Sustainability Initiative

Clinker process generates waste heat.

Using waste heat Waste Heat Recovery power plants (WHRP) can• Generate green power without fuel• Conserve fossil fuels and water• Reduces CO2 emissions

WHRP are highly capital intensive: Rs 9-10 Cr/MW

Indian Cement industry committed to low carbon economy • Installed 140 MW WHRPs• Achieved CO2 reduction: 385000 Ton• Potential to generate 1000 MW power

Shree has installed largest WHR based Power plant, in World Cement Industry after China

Alternative Fuels

Sustainability Initiative

Cement production an energy intensive process.

Reliant on coal from Coal India, no new coal linkage

post 2007.

Alternate Source : Use of AFR, Petcoke, Coal Import.

R&D : On compatibility of AFR material.

Successfully developed Petcoke- A refinery waste as a

strong alternative of Coal.

Results: Conservation of fossil fuels and overcome

disposal problem of petcoke.

Shree was first to pioneer the use the Pet-coke in Kilns

Cement Industry: Best option for Co-processing wastes

Sustainability Initiative

About 7.66 million tonnes per annum hazardous waste generated from about 40,722 industries of which

Landfillable – 3.39 Mn TA

Recyclable – 3.61 Mn TA

Incinerable – 0.65 Mn TA

Hazardous waste are Paint Sludge, Refinery waste , ETP sludge, Tar, Refused derived fuel etc

Source: CPCB

Alternative Fuels: Energy from any Waste

Sustainability Initiative

Kilns are the best sustainable solution for disposal of

hazardous waste.

Use of Hazardous waste for co-processing can potentially

save 0.43 Mn tonne of Coal yearly.

Municipal Waste alone can generate 9 Mn Tonne of Residue

Derived Fuel (RDF) to replace 4.5 Mn Tonne of coal for

cement plant operation.

Pioneers in AFR utilization: Holcim & Utratech

Alternative Raw Material

Sustainability Initiative

Indian Cement Industry a major consumer of fly ash. Out of 160 Mn T fly ash

generated annually, only 92 Mn T (57.5%) is recycled, and cement industry

consumes nearly 50 Mn. T (31% of the generated) fly ash annually.

Consumes the entire quantity of granulated BF Slag generated – More than 10

MnT annually.

Increased use of Blended Cements (PPC & PSC) over the years.

• From 18% of Total Production in 1989 to 70% in 2011-12

Consumes 90% fluro and phospho- gypsum waste from fertilizer industry

exceeding 3.5 Mt.

Uses waste materials as fuel including those from other industry – eg.

Petcoke, rice husk, bagasse, cut tyres & MSW

Alternative Raw Material : Resource Conservation

Source: CMA

Sustainability Benefits

Alternative Raw Material : Synthetic Gypsum

Sustainability Initiative

Industry dependent on Natural Gypsum

Flue Gas Desulphurization plants in CPP

captures SOx Emissions and produces

Synthetic Gypsum.

Conserves Natural Gypsum

Provides consistency in quality & process

Sustainability Initiative

Water Conservation- Air Cooled Condensers

Innovation: Replacing Water Cooled Condenser

(WCC) of Captive Power Plants with Air Cooled

Condensers (ACC).

Achieved: Similar performance efficiency as

WCC’s.

Water Conservation: Reduced water consumption

to 1/10th of WCC plants.

Shree has installed largest Air Cooled Condensers in India

Sustainability Initiative

Energy Efficiency- Using Best Available Technology

MinesCross belt analyzer, Multi stage crushers and wobblers, Mine planning software, Radio controlled mines machinery monitoring system, Operator Independent Truck Dispatch System (OITDS)

MillingVertical Roller Mills, Mechanical recirculation system, Adaptive predictive control for mill operation, Gravimetric feeding system

PreheaterSix stage preheater, Low NOx calciner with adequate residence time, Cyclones with high efficiency and low pressure drop

KilnMulti-channel burner, High strength insulation bricks, high peripheral speed (up to 6 – 7 RPM), VFD control for shell cooling fans

Cooler High efficiency aerofoil bladed cooler fans with VFD, Latest generation coolers with a total loss of less than 100 kcal/kg clinker

Dust Control Equipment Pulse-jet bag houses with membrane bags for all process applications

Control System

Adaptive predictive control system, Online NOx control, Online flame control, Online free-lime (CaO) control, Flow measurement with advanced techniques

Sustainability Initiative Energy Efficiency- Global Comparison

CountrySpecific Electrical Energy

ConsumptionkWh / t of Cement

Specific thermal energy Consumption

Kcal/Kg clinker

India 82 725

Spain 92 836

Germany 100 836

Japan 100 836

Brazil 110 884

Italy 112 908

China 118 956

Mexico 118 1003

Canada 140 1075

USA 141 1099

World Average 100-110 850-860

Comparison of Energy Consumption with selected countries

Source: Indian Cement Review ,Sep ‘13

EnergyIntensiveSectors

PAT- A market-based mechanism to enhance cost effectiveness of improvements in energy efficiency among Designated Consumers through certification of tradable energy savings

Energy Efficiency- Setting New Benchmarks

Cement-Baseline Energy Consumption : 15 Million tonnes of oil equivalent (mtoe)No. of Designated Consumers as of date : 85Reduction target for DC's : 3.99-6.88%Targeted reduction for cement sector : 0.815 mtoe (Tentative)

Sustainability Initiative

Employee Engagement

Text

Community Development

Text

Construction Skills Training

Institute

Mother & Child Health

Community Health Centre

Employee Volunteering

Working on Wellness

Education & Vocational Training

Employee Bonding

Training & Awareness

Social DevelopmentTotal community prosperity

Sustainability Initiative

Transparency in Reporting- CSR Reports

Sustainability Initiative

GRI A+ rated reports by leading

players

► G4 is the fourth generation of Sustainability Reporting Guidelines developed by GRI

► It was developed through a global multi-stakeholder process involving representatives from all sectors.

► It consists of two parts:

Part A: Reporting Principles and Standard DisclosuresPart B: Implementation Manual

► GRI requires that all reports published after 31 December 2015 should be prepared in accordance with the G4 Guidelines

The Supply Chain Focus

The G4 Guidelines places an emphasis on disclosure related to the supply chain of the organization, including:►Description of the supply chain►Significant changes in the

supply chain since last reporting.

►Actual and potential negative impacts on environmental, labor aspects, human rights, society in the supply chain.

Many aspects of the supply chain feature in Standard Disclosures guidance.

GRI G4 Guidelines and Supply Chain Focus

Sustainability Initiative

Manufacturing organizations often have a symbiotic relationship with their suppliers.

Large responsible organizations can potentially play an active role in ensuring the sustainability of their

supply chain.

Engaging with suppliers on issues such as energy, environment, and social aspects, pays off in the long term, by ensuring efficiency and quality are

percolated down the supply chain.

Supply chain sustainability criteria which may be evaluated

►Resource efficiency of suppliers►Social Impact of supply chain►Environmental impact of supply chain

Identification of key supply chain sustainability criteria to evaluate

Stakeholder consultation with supply chain representatives

Development of detailed data collection and audit plan

Data collection and gap analysis

Recommendations for improvement of supply chain sustainability performance

and development of supply chain sustainability strategy

Identification of financing options and/or incentives for implementation of strategy

Development of monitoring framework

Implementing a supply chain sustainability strategy

Adopting Sustainability Strategy for Supply Chain

Sustainability Initiative

Membership of Global Sustainability Initiatives- CSI

60% of production

Sustainability Initiative

Cement Sustainability Initiative (CSI) Members in India

Environment & Biodiversity Protection

Installed state of art ESP / bag house for dust control

Environmentally sound technologies for minimizing NOx ,SO2 and CO2 emissions

Adopted ISO 14001 Environmental Management System

Significant progress achieved on restoration plans for quarries

Installation of Continuous Emission Monitoring System

Sustainability Initiative

Occupational health & safety

Implementation of best practices through sharing and learning.

Companies are implementing OHSAS 18001

CSI member companies are implementing CSI Driving/Contractor Safety Guidelines

Monitoring of worker health and safety conditions, including noise levels.

Impart regular trainings

Performs Safety Audits

Improved methods to measure and ensure worker safety, including the handling of wastes.

Adoption of 5 S concept.

Sustainability Initiative

Clean Development Mechanism (CDM) Projects

Sustainability Initiative

So far 21 CDM project has been registered in Indian Cement Industry, resulting in annual CO2

emissions reduction of 21,02,656 tonnes

• Total number of registered CDM projects in cement industry around the world: 171• For clinker substitution projects (fly ash / slag blending), India leads with highest number of

registered CDM projects.• India lags behind China in CDM registration of WHR projects for the following reasons:

• High cost of grid power (and escalating grid import prices) make it difficult to prove additionality in India, despite high capital investment required for WHR

• Grid power is relatively cheaper in China.

Targets of Sustainability for 2050

AFR Usage Source: WBSCD / CSI Low-Carbon Technology Roadmap for Cement Industry

Targets of Sustainability for 2050

Electrical Energy Source: WBSCD / CSI Low-Carbon Technology Roadmap for Cement Industry

Targets of Sustainability for 2050

Thermal EnergySource: WBSCD / CSI Low-Carbon Technology Roadmap for Cement Industry

Targets of Sustainability for 2050

Clinker FactorSource: WBSCD / CSI Low-Carbon Technology Roadmap for Cement Industry

Low Demand Case

Parameter 2010 2020 2030 2040 2050

Clinker Production 161 290 382 429 449

Cement-to- clinker ratio 0.74 0.70 0.64 0.60 0.58

Electric intensity (KWh/kg cement) 80 76 73 72 71

Thermal intensity (Kcal/ Kg clinker) 725 709 694 685 680

Alternative Fuels use (as a share of thermal energy consumption (%)

0.6 5 19 24 25

% carbon capture 0 1 9 17 25

Targets of Sustainability for 2050

High Demand Case

Parameter 2020 2030 2040 2050

Clinker Production 342 544 713 794

Cement-to- clinker ratio 0.70 0.64 0.60 0.58

Electric intensity (KWh/kg cement) 75 72 71 70

Thermal intensity (Kcal/ Kg clinker) 703 690 682 678

Alternative Fuels use (as a share of thermal energy consumption (%)

5 19 24 25

% carbon capture 2 10 20 28

*Source: CSI Low – Carbon Technology for the India Cement Industry

Targets of Sustainability for 2050

The cement industry needs an environment that incentivizes companies to adopt mature sustainability strategies, and facilitate transition of cement companies towards becoming architects of sustainable business solutions.

• Fiscal incentives for investment in low-carbon technologies and products

• Amending policies for trans-boundary movement of industrial waste

• Enforcement of RPO for promoting renewable energy

• Government support for R&D initiatives• Revision of product standards to allow for

additional utilization of alternative raw materials

Sustainable Development: Enabling Levers

Targets of Sustainability for 2050

Risk Mitigator

Compliance

Operational Differentiator

StrategicDifferentiator

Architect

Value AddValue Protection

Level of Response

In coming years, in order to survive & grow, rapid modernization and adoption of energy efficient & environmental friendly technologies will be prime need for viability of the cement industry.

Cement industry can play a vital role in the sustainable development of the country by consuming most of the country’s industrial waste.

Cement companies need to have an increased focus on reporting of supply chain sustainability and adopt GRI G4 guidelines.

A supportive policy environment is required to incentivize cement industry to adopt mature sustainability strategies.

Indian cement industry is one of the most energy-efficient in the world.

Indian cement industry needs to catch up with global cement industry for utilization of alternative fuels – policy support may be required for this.

To implement Low Carbon Technology Roadmap to reduce the direct emission from 0.63 t CO2/t of Cement to 0.35 CO2/ t of cement in 2050.

Conclusion

You Green

Company Green

Globe Green

Thanks !

www.shreecement.in