A grassroots model to tackle cement pollution

Sub: Environment

Sec: Pollution

Context:

Cement is a major industrial polluter with CO2 emissions (contributing approximately 7-8% of global CO2 emissions) being an inevitable output in clinker production, releasing 576 kg per tonne of cement.

Rural Prosperity Mission (RPM):

RPM aims to transform adversity into prosperity by involving an anchor client (cement plant), an anchor municipality, surrounding villages, and innovative technology.
Rajapalayam in Tamil Nadu, with a 1.5 million tonnes per annum cement plant, serves as a model.
The municipality, with 184,000 residents and 100 nearby villages, faces financial constraints and pressing community needs such as water supply, fair-priced agricultural produce, women’s empowerment, education, skilling, and CO2 emissions.

Addressing CO2 Emissions and Boosting Revenue:

Substituting coal with hydrogen in the cement plant can eliminate CO2 emissions, with hydrogen having six times the calorific value of coal.
The cement manufacturer will switch to hydrogen if its adjusted cost, including carbon tax, is equal to or lower than coal costs. There is a demand for green cement, potentially available at a 15% premium.
Given the current coal costs and hydrogen’s calorific value, the levelised hydrogen price would be around Rs 158/kg, about $2/kg.

Economics of Hydrogen:

Clean energy for hydrogen production will come from a 70 MW solar plant in Rajapalayam and 2-3 MW solar plants in each village, supplemented by remote renewable energy for 24/7 operations.
The project involves three phases: water sourcing and transport piping (Rs 775 crore), electrolyser and floating solar plant (Rs 1,336 crore), and village electrolysers (Rs 1,211 crore), totalling Rs 1,622 crore.
Financing includes 60% (Rs 982 crore) from government grants and 40% (Rs 640 crore) as soft loans and vendor financing.
Annual operating expenses are Rs 343 crore, with revenue from hydrogen sales to the cement plant at Rs 158/kg, plus a government subsidy of Rs 35/kg. First-year sales revenue is estimated at Rs 558 crore, with a surplus of Rs 215 crore after expenses, sufficient for loan repayments and distribution to the municipality and villages. Profits are projected to rise to Rs 164 crore/year after loan repayment from the sixth year onwards.

Implementation and Benefits:

Phase-1 includes identifying five new water sources to be stored in a refurbished 180-acre reservoir, meeting human, agricultural, and industrial needs.
Clean hydrogen will be generated with 180 MW electrolyser capacity, distributed between Rajapalayam reservoir (55 MW) and the cement plant (125 MW) across villages, with hydrogen trucked from 100 villages.
The project will significantly reduce carbon emissions and social costs, generating an additional Rs 50 crore/year for the municipality.
The RPM concept can be replicated in other cement factory locations and heavy carbon emission industries in Tamil Nadu and across India, substantially lifting incomes for below poverty line (BPL) families.

Source: THBL