Making Business Case
Adoption of alternative fuels as a means of increasing cost competitiveness is gaining ground in India. But the industry has a long way to go before achieving 25% TSR.
There are three different types of competitive advantages that companies can actually tap - cost, product/service differentiation, and niche strategies. While the cost competitive advantage can be highly successfully employed, it has its own challenges. This advantage calls for utilising its skilled workforce, inexpensive raw materials, controlled costs, and efficient operations to create maximum value to consumers.
Though there are many ways through which cost advantage of a cement company could be improved, increasing the use of alternative fuels and raw materials (AFR) is one that is an important means to achieve this goal.
"The concept of co-processing of waste in the cement kilns has been well understood by the cement industries over a period of last 3-4 years and also its impact on their bottom lines," says
Milind Murumkar, Advisor AFR, Vicat India.
Since the fuel costs have shown upward trend over last few years, affecting the total manufacturing cost at their plants, the focus on AFR substitution rates has become a buzz word in the cement manufacturing sector.
Waste materials used for 'co-processing' are referred to as AFR. AFR can be used alone also as fuel in cement kilns. "A proper understanding of the processes, raw material characteristics and the waste compositions are the key factors that need to be assessed before use of AFR in a particular kiln system," Murumkar adds.
The Thermal Substitution Rate (TSR) in India has shown a very positive trend year on year, though at a very slow pace earlier and started picking up in the last 2 years to a level of around 4 per cent. This recycling of industrial waste is done on a negative cost basis. But plants using agricultural waste have to pay for it. For Refuse Derived Fuel (RDF), the companies are mostly in touch with municipalities.
The basic reason for the slow growth in AFR use can be broadly attributed to lack of knowledge on AFR usage in Indian cement industry in the earlier years, especially on usage of industrial waste, lack of skilled manpower for handling and usage of industrial waste, lack of proper infrastructure for storage and feeding of AFR materials to cement kilns, lack of proper understanding on the permitting process etc, Murumkar says.
Experts are unanimous that Indian cement industry is far behind and need to pull our socks as far as alternate fuels are concerned. As indicated in the CII approach paper, India plans to achieve 25 per cent TSR by 2025. "In comparison to global standards, we are far behind as in many countries the substitution is in the range of 60-100 per cent. The main differentiator is waste characteristics and the lack of support by the required agencies for generating a good segregated quality waste. This long term plan of achieving 25 per cent substitution rate from the present national level of 4 per cent itself is a big challenge," explains Murumkar.
Utilisation of waste material as AFR in Indian cement industry plays significant role in bringing down consumption of fossil fuels at a time when fuel costs are going up, uncertainty over fuel availability and the consciousness over rising CO2 emissions and global warming are on the rise.
AFR use also brings in financial in the form of reduction in operating and capital costs, and non-financial benefits to the companies. The direct benefits are reduction in fuel costs and raw material additive costs. Indirect benefits like reduction in use of fossil fuels, reduction in mined materials and improved life of mines will also accrue when AFR is adopted.
Explaining the financial benefits, Murumkar said, "Presently, the Rs/Thermi cost in a cement plant that uses coal/ pet coke is to the tune of around 1.20 to 1.40, where as if proper blended waste is utilised as substitute to coal this figure comes down to around Rs 0.5-0.60/Thermi." In case, the cement plant is able to give a proper solution to the waste generating industries, the waste generator also pays a 'gate fees' that adds to the cement plants' bottom line.
The challenges for setting up AFR facilities include selection of right technology in alignment with the existing equipment and infrastructure available at the plant, developing skill sets for monitoring enormous data like Material Safety Data Sheet (MSDS) and taking corrective measures when the need arises, precautions needed during transportation, storage handling and usage of different wastes. Besides, it is better to have a proper market data mapping done for selection of alternative materials and enter into long term agreements with the waste generators for ensuring uninterrupted supply of raw materials.
Used tyres garner the highest average Net Calorific Value of 7,500 kcal/kg, compared to hazardous wastes, including industrial plastic waste at 4,000 kcal/kg, followed by biomass at 3,000 kcal/kg and RDF from municipal solid waste (MSW) at 2,200 kcal/kg.
One should initially understand the cement plants' infrastructure, plant capacity, process capability, available plant machinery and equipment, storage and blending facilities in the plant, quality check mechanism and facilities, and knowledge of their technical personnel, while choosing technology, cautions Murumkar. Even for selection of materials it is important to know the feed points in the kiln system, the storage facilities, especially for hazardous materials, in the plant with proper leachate collection mechanism, fire protection mechanisms, handling and dosage systems available etc.
Long term supply contracts are required for justifying the capital investment in AFR handling and feeding equipment. The quality variation in the AFR needs to be absorbed by the plant by careful process planning and optimisation.
Considering the sincere efforts required in organising AFR processes and operations for deriving the maximum benefit, many cement manufacturers have set up dedicated divisions that look around for alternative fuels. They are in regular touch with other industries for rejects with good calorific value. Some manufacturers have even set-up test laboratories to check the utility of such materials.
LafargeHolcim has a global policy on AFR. It has reached out to several industries and municipalities to source such materials, and the company's Indian subsidiaries ACC and Ambuja also follow the same policy on AFR.
LafargeHolcim's global waste management business, Geocycle, treated 10 million ton of waste in 2017, an increase of 13% versus 2016. The 10 million ton is almost twice the total yearly household waste generation of Switzerland or the equivalent of two million garbage collection trucks.
In a statement recently,
Jan Jenisch, Group Chief Executive Officer of LafargeHolcim,
commented, "At LafargeHolcim we offer solutions which facilitate the simultaneous recycling and recovery of waste. We have ambitious plans to continue investing in all parts of the world in order to bring the most advanced technology and solutions to our partners and play a role in solving the global waste problem."
Though the Indian cement industry has achieved excellence in energy efficiency, in AFR usage much remains to be done for achieving the TSR target of 25%. Increased use of alternate fuel in the industry is not only a potential solution towards sustainability, conserving the depleting fossil fuel, but also identified as one of the key levers to reduce carbon footprint.
Vicat plants achieve 20% TSR
Vicat in India is a part of the global Vicat group which is more than 160-years old. It operates two plants in India as Kalburgi cement plant and Bharti cement plant, with an annual capacity of around 8 million tons, to produce superior quality cement since 2009. Since inception the focus was on utilisation of AFR material in both the plants and presently we could achieve Thermal Substitution Rate (TSR) of around 18-20% for Vicat in India.
Vicat's India's journey started with substitution rate of around 4% in 2012 and in last five years it reached to a level of 20%. The success story of Vicat group is quite enviable compared to our peers. We started using AFR at our Kadapa plant in the year 2011 and there has been fourfold increase in the TSR over the last 4-5 years. Today the substitution rate at our Vicat plants is 20 per cent, huge investments have been made in creating world class infrastructure at our plants for utilising different kinds of wastes which are hazardous and no-hazardous. Proper feeding systems have been provided for feeding the materials as per the material characteristics and their forms like for liquids, semisolids and solids, RDF and plastic wastes etc.
The different kinds of waste we use in the plants are pharmaceutical waste (liquid, semi-solid, solids), food & beverages / FMCG, black carbon and dolachar, firewood/biomass (mango seeds) refused derived fuel from municipal solid waste, used tyres etc.
We have set up well equipped laboratory for Proximate, Ultimate & Heavy Metal analysis of waste. A team of 50 personnel is working for alternate fuels to increase the substitution rate. All our stacks and ambient air quality monitoring stations are well connected with APPCB website and also we have arranged fire-fighting equipment, fire hydrant systems etc. It is our commitment to reach a substitution rate up to 40 per cent by end of 2020.
Main AF materials in use
- Industrial wastes (hazardous and non-hazardous),
- Tyre derived waste
- Plastics-derived waste
- Municipal solid waste (MSW)
- Biomass & animal waste
- Dried Sewage Sludge
- Waste from windmill sources
- BS Srinivasalu Reddy