Cement Manufacturers Association (CMA)

56 Solutions This section focusses on the financial modelling of a single centralised 200 MtCO2e/year carbon capture plant. This is merely a theoretical exercise to understand the degree of achievability of this decarbonisation pathway. The capital cost of such a theoretical plant would be approximately $10.74 billion. Assumptions of discounted cash flow analysis: 1. Carbon credits are generated for only one level (L11) out of 6 levels of the Azonian Process. 2. Carbon credit rates are varied from $2-$20/ tCO2e for performing a sensitivity analysis exercise. 3. Capital cost is assumed to be $87.5/tCO2e per annum capacity addition, the same as research scale capital costs. 4. Operational cost is assumed to be $60/tCO2e, inclusive of process ($25/tCO2e) and labour costs, yet again the same as research scale costs. 5. Selling rate of bio-fertiliser is assumed to be $10/tonne. 6. The discount rate has been assumed as 5%. It can be seen that despite assuming nominal VCM rates for high integrity carbon credits and selling the resulting bio-fertiliser at a nominal rate, the discounted payback period does not exceed 2 years even in the worst case scenario, where high integrity carbon credits are sold at the same rate as VCM market extant rates. Therefore, the Azonian Process can prove to be a financially sustainable, and even profitable venture for emission-intensive hard-to-abate sectors, making it the world’s first carbon capture solution that can generate profits in as little as 2 years of operation. Conclusion In surmise, it can be seen that decarbonisation options for the Indian cement sector are currently limited to capital-intensive, energy-intensive, centralised technology-based retrofitting solutions -2E+10 0 2E+10 4E+10 6E+10 8E+10 1E+11 1.2E+11 1.4E+11 1.6E+11 1.8E+11 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 $2/tCO2e $5/tCO2e $10/tCO2e $15/tCO2e $20/tCO2e Figure.2: Discounted cash flow analysis and effect of variation of carbon credit prices on payback period