What is the general break-up of composition of fuel use in the Indian cement manufacturing process - particularly of coal, petcoke and AFR?
Between coal and petcoke, the two together account for an average 85-90 per cent of the total fuel requirement of the cement industry. Petcoke, which is also a feedstock, has a larger overall share and coal as a key fuel for power plants accounts for the remaining fuel consumption.
Renewable energy, power from waste and other non-conventional power sources account for almost 10 per cent of the fuel and power requirement of the industry.
What are the specific used of different fuels in your cement manufacturing process?
Which is the best source of energy considering the economics and cost of electricity? Petcoke is a key raw material for producing clinker (clinker is primary raw material for manufacturing cement). Clinker production accounts for majority fuel consumption in a cement industry. Petcoke is preferred due to its high carbon content, with higher calorific value (over approximately 7,500 Kcal/kg), which makes it a much more economical fuel for the cement manufacturers and they also blend it with coal to improve energy production.
The major downside is sulphur content in low quality petcoke (approximately 8-25 per cent), which is highly-polluting and also causes formation of a layer of sulphur, which leads to higher maintenance/downtime of cement plants. Petcoke becomes a key raw material with a fewer substitutes especially for clinker production. Thus petcoke is proving to be economical for the industry, followed by coal is the preferred source of fuel for power plants.
Coal on the other hand is used as fuel for power plants by the captive power producers in the cement industry. But in case of power, renewable energy offers a much better alternative in terms of no-emission and low cost of maintenance and operations.
What are the precautions cement manufacturers have to take while adopting a particular fuel and what are the constraints (including cost fluctuations) you have faced while using them?
In terms of precautions, there are two considerations manufacturers need to keep in mind. One is the environmental consideration wherein regulatory or judicial interventions could be very disruptive, like petcoke ban implemented in the past which had a major impact on large number of players in the sector. Fuels like coal and petcoke have this major drawback wherein restrictions especially judicial interventions pose a major challenge for the sector. The industry has to work towards finding alternatives or substitute some of these fuels used for manufacturing as well as improve the overall efficiency in usage and minimize wastage.
The other key challenge is prices of commodity and currency movements. Cement is more of a commodity and thus, passing on costs, especially in competitive market conditions is quite difficult. We have already seen, how prices of crude and coal globally has impacted the margins of the industry in FY19. Additionally, it is the availability of these fuels as in case of domestic coal and their transportation costs or availability of rakes too impacts its users.
These are broad areas where the industry has to be continuously cautious as well as proactive especially when adopting a particular fuel.
Are there any supply constraints witnessed in any of these fuels? What are the supply-chain constraints of these fuels?
The supply chain revolves around availability of rakes for the sector. As the priority of cement industry is less than power plants, availability of railways rakes becomes a key issue, especially for supplying domestic or imported coal to manufacturers. In terms of road transport, the lead time has reduced part of which could be also attributed to GST, which has eased movement of coal and other fuel like petcoke even between states.
What are the environmental concerns these fuels pose and what are the technologies that could help reduce their environmental impact? What are the alternative fuels that are available to these manufacturers?
The impact of using fuel like petcoke and coal is quite evident as they emit greenhouse gases and other highly polluting gases containing sulphur (SO2) into the atmosphere. The sector contributes considerably towards carbon emission among manufacturing industries (approximately 3-4 per cent globally). Since emission are highly regulated, there are enough measures and safeguards already implemented by cement manufacturers in the industry, but there is always scope to improve by following the highest global standards like in some European nations.
Additionally, waste disposal is a major challenge, especially disposing coal ash and other hazardous residues. Re-use and recycling waste addresses these problems to an extent, "Co-processing" or the process of using waste from the industry as a substitute for and recovering energy is a the most sustainable way of addressing the issue of disposal of waste. The benefit of co-processing is that it addresses the issue of disposing off both hazardous as well as non-hazardous waste. Other existing methods are incineration, landfills, recovery, etc.
What is the kind of fuel mix do you see for the industry, say by 2025?
The share of renewable and other non-conventional energy sources is expected to increase to at least 25 per cent over the next five years. With adequate renewable energy capacity addition already taking place, they provide a suitable and much-needed alternative for the industry at very competitive prices.
We can also expect reduction in overall use of fuels especially petcoke. Natural gas could also become a viable substitute for coal being used currently by 2025.