India’s major cement companies are expected to increase their green power capacity to 5.8-6 GW by March 2028 from around 4 GW in March 2026, supported by investments of Rs 12,000-13,000 crore over the next two years, according to ICRA.
The additional capacity could generate annual savings of Rs 6,200-6,700 crore, translating into a payback period of around 1.8-2.2 years.
The expansion comes as cement manufacturers look to reduce their exposure to fuel-price volatility while cutting emissions from one of India’s most energy-intensive industries.
Green Power Could Lower Costs By Rs 75-80 Per Tonne
Anupama Reddy, Vice President and Group Head, Corporate Ratings at ICRA, said green energy remains one of the more commercially attractive decarbonisation options available to cement manufacturers because it combines emission reductions with cost savings.
According to ICRA, every five percentage-point increase in green power replacement can reduce power and fuel costs by Rs 15-16 per tonne. At a 25 per cent replacement level, savings could reach Rs 75-80 per tonne and support an expansion in operating margins of around 140-160 basis points.
The economics of green power are particularly relevant for cement manufacturers given the industry's high energy requirements and exposure to fluctuations in conventional fuel prices.
Cement Industry Steps Up Decarbonisation
Cement remains among the most emission-intensive industries, with major producers laying out net-zero roadmaps spanning the next 15-20 years.
Calcination accounts for around 57-60 per cent of total cement-sector emissions, while fuel combustion contributes 27-30 per cent and electricity consumption another 10-13 per cent, according to ICRA.
Green electricity therefore addresses only part of the industry's emissions footprint. Cement manufacturers are also increasing the use of blended cement and alternative fuels while improving clinker efficiency as part of broader decarbonisation efforts.
Green financing is also emerging as a source of capital to support investments required for the sector's transition.