JSW Cement
At a Glance
Industry
Industrial Goods and Manufacturing
Project Types
Financial Evaluation and Planning, Sustainability and Energy Management Strategy
Year
2023
Location
Mumbai, Maharashtra
Summary
Nikhil Sharma worked with JSW Cement to focus on the emerging climate policy and regulatory ecosystem in India, that poses new opportunities and challenges for organizations.
Goals
As one of the largest emitters in a “hard-to-abate" sector, cement faces several implications in the current climate-centric regulatory environment. Nikhil Sharma worked with JSW Cement to analyze the implications of the Energy Amendment Act of 2022, particularly with a reference to Indian Carbon Market (ICM) and Internal Carbon Pricing (ICP). Nikhil also explored opportunities in the voluntary carbon market for already-implemented projects.
Solutions
The Energy Amendment Act focuses on establishing a carbon market in India by 2025, and the cement sector is among the eight industries included in the carbon trading scheme proposed. The act's objectives are aligned with the Nationally Determined Contributions (NDC’s) to reduce the carbon intensity of the Indian economy by 2030 over 2005 levels. JSW Cement, being one of the leading and growing cement manufacturers, must consider the emerging policy regulations targeting cement industry.
The ICM, once implemented, will create an opportunity for JSW Cement considering its lowest carbon intensity per tonne of cement produced is one-third of the global average. Nikhil evaluated opportunities under different scenarios in revenue by selling surplus carbon credits offered to the company as part of the trading scheme.
Nikhil additionally identified the appropriate methodology for JSW Cement to evaluate its ICP and incorporate it into its existing processes.
Potential Impact
After completing an assessment of JSW Cement’s production trajectory and emissions, Nikhil evaluated possible implications of a carbon credit market with price assumptions. The upcoming market is a potential opportunity for JSW, considering the lowest emission intensity in the industry.
JSW adopted a hybrid pricing mechanism to calculate the ICP for the company, where it has since been utilized as a shadow price in project planning.