The steel and cement industries are the backbone of modern infrastructure. With rapid industrialization and urbanization, India is on track to become the world’s second-largest producer of steel and cement, following China, by mid-century. However, their reliance on heavy trucks and other traditional processes comes at a heavy environmental cost. In India, the medium- and heavy-duty trucking sector makes up only 4% of the total vehicle population but contributes to 40% of road transportation emissions due to high fuel consumption.
The steel and cement industries are major contributors to global carbon emissions due to their energy-intensive production methods and reliance on diesel-powered heavy trucks. Both sectors heavily depend on road transportation, where diesel trucks account for around 7% of total global CO2 emissions, according to the International Energy Agency (IEA). In 2021, the global steel industry alone was responsible for 7%–9% of total emissions, while cement production contributed around 8% of global CO2 emissions, as reported by the Global Cement and Concrete Association (GCCA). Additionally, the manufacturing processes in these industries consume vast amounts of heat and electricity, which are typically generated from fossil fuels, further increasing their carbon footprints. In total, these sectors, including their transportation activities, contribute to nearly 16% of the world’s CO2 emissions.
As the country strives toward sustainable development, the focus on transitioning the steel and cement industries to clean energy has intensified. As the demand for road freight in these industries continues to grow, the decarbonization of the heavy trucking segment has gained importance. In this context, a promising solution is emerging: Liquefied Natural Gas (LNG) trucks offer a cleaner alternative, paving the way for a more sustainable future for these industrial giants.
Current Challenge: Tackling the Emission Crisis
The steel and cement industries rely heavily on road transport to move raw materials, finished products, and clinker (an intermediate product in cement production). Diesel trucks, the current workhorses of this transportation network, spew significant amounts of carbon dioxide (CO2) and other harmful pollutants. These emissions not only contribute to climate change but also impact local air quality, posing health risks for communities situated near transportation routes and production facilities. In fact, steel and cement are the largest CO2-emitting sectors in India, contributing to over half of the country’s industrial emissions.In India, these sectors are the largest sources of CO2 emissions, accounting for over 50% of all industrial emissions. During 2021-2022, the steel industry emitted 297 million tonnes of CO2, while the cement industry released nearly 164 million tonnes of CO2 in 2022.
According to estimates from The Energy and Resources Institute (TERI) and the World Business Council for Sustainable Development (WBCSD), demand for steel and cement is expected to increase three to four times by 2050. This rise could potentially triple sectoral CO2 emissions. Consequently, the industrial sector may become the largest source of CO2 emissions in India. Despite this, India has set an ambitious net-zero target for 2070. Achieving this goal will require decoupling industrial growth from emissions.
In addition, LNG trucks offer a compelling alternative to diesel vehicles. Liquefied natural gas, a cleaner-burning fuel, produces up to 30% fewer greenhouse gas emissions compared to diesel. This translates to a significant reduction in the environmental footprint of steel and cement transportation. Additionally, LNG trucks emit far lower levels of harmful pollutants like particulate matter and sulphur oxides, contributing to cleaner air and improved public health.
Putting LNG Trucks to Work
While electric-powered vehicles are suitable for short-haul applications, LNG is the preferred fuel for long-haul vehicles. The benefits of LNG trucks extend far beyond environmental advantages. LNG trucks offer a sustainable solution for transporting iron ore, coal, and other essential raw materials to steel mills. This reduces the carbon footprint associated with the entire steel supply chain. Furthermore, delivering finished steel products to construction sites and factories with LNG trucks can support environmentally conscious construction practices and contribute to greener buildings.
Many companies are integrating LNG trucks into their fleets for transporting cement, fly ash, and other raw materials. UltraTech Cement Limited, India’s largest cement and Ready-Mix Concrete (RMC) company, has made significant strides in ‘green mobility’ by introducing CNG vehicles in 2021 and LNG vehicles in 2022. By working closely with logistic partners, UltraTech now operates over 390 CNG trucks and 50 LNG trucks across 17 manufacturing units. Similarly, Dalmia Cement, another leading cement producer in India, has deployed its first fleet of LNG-powered trucks, initiating the creation of a sustainable supply chain.
Cement production facilities are often located significant distances from construction zones. LNG trucks are ideal for these long-haul journeys due to their extended range compared to diesel-powered vehicles. Additionally, the transportation of cement clinker and fly ash between plants can be made more efficient and eco-friendlier with LNG trucks.
Advancing Green Logistics in Steel and Cement Sectors
While LNG trucks offer environmental advantages, there are initial cost considerations however, the long-term benefits outweigh these initial costs. LNG trucks are significantly more fuel-efficient and also there is fuel arbitrage as LNG is cheaper compared to Diesel, leading to substantial fuel cost savings throughout the vehicle’s lifetime.
Moreover, governments can play a crucial role in accelerating the adoption of LNG trucks in the steel and cement industries. Offering subsidies for LNG infrastructure development, such as refuelling stations, can ease the initial financial burden on companies. Additionally, providing incentives for purchasing LNG trucks can encourage wider adoption within the industry. Collaboration between industry players and policymakers is essential to streamline the transition and create a robust ecosystem for LNG-powered transportation.
The successful integration of LNG trucks depends on developing a comprehensive refuelling infrastructure. A network of conveniently located LNG stations is crucial for smooth operations and wide adoption. Collaboration between industry and government can expedite building this infrastructure, benefiting the steel and cement sectors and promoting broader LNG truck use across industries. Advancements in LNG storage and transportation can make the fuel more available and cost-effective, accelerating the greening of the steel and cement industries.
The Future Calls for Collective Action
Adopting LNG vehicles is crucial for India to reduce greenhouse gas emissions, curb urban air pollution, and increase the share of natural gas in its energy mix from 6% to 15% by 2030. Integrating LNG trucks in the steel and cement industries advances sustainable logistics, aligns with global environmental goals, and prepares these sectors for future regulations and market demands. By lowering their carbon footprint, steel and cement companies can enhance competitiveness and reputation in an eco-conscious market. Industry leaders should transition to LNG trucks to stay competitive, while policymakers must support LNG infrastructure development and provide incentives for greener logistics solutions. This collaboration will significantly contribute to the global fight against climate change.
