India Cement Kiln Alternative Fuel Market Size, Share, Growth and Forecast, 2025-2035

Kilns burn about 7 million metric tons of waste fuel a year

The India cement kiln alternative fuel market was valued at USD 320.0 million in 2025 and is projected to increase from USD 360.0 million in 2026 to USD 920.9 million by 2035, registering a CAGR of 11.00% during 2026–2035. Demand comes from integrated cement plants that replace coal and petcoke in kilns and calciners with refuse-derived fuel, industrial waste, agricultural biomass and shredded tyres, buying them from city waste bodies, waste processors and industrial generators. West India held the largest regional share, 34.0% in 2025, because the chemical and engineering clusters of Gujarat and Maharashtra produce the largest industrial waste streams fed to kilns. Northeast India is the fastest-growing region at 12.13% a year, from a small base as new clinker capacity is built in Assam. Thermal substitution still averages only single digits across Indian kilns, so most heat still comes from coal and petcoke. The main regulatory change is the Solid Waste Management Rules, 2026, which took effect on April 1, 2026, and require cement plants to raise refuse-derived fuel use from 5% to 15% over six years.

Which kiln fuels and supply payments are counted here?

The market counts the delivered value of non-fossil and waste-derived fuels fired in Indian cement kilns and calciners. It covers refuse-derived fuel made from municipal dry waste, industrial and hazardous waste sent for co-processing, agricultural residues and other biomass, and whole or shredded end-of-life tyres, valued at the price cement plants pay at the plant gate, including pre-processing.

The scope excludes coal, petcoke and lignite, alternative raw materials such as fly ash and slag, waste heat recovery power and biomass burned in captive power plants. Gate fees that cement plants earn for destroying some hazardous wastes are netted against fuel purchases, so the value is measured once at the kiln.

Industrial waste leads while municipal RDF grows fastest

Why does industrial waste hold the largest fuel share?

Based on fuel, the market is categorized into RDF, biomass, industrial waste and tyres. Industrial Waste led with 36.0% of 2025 value because it arrives from fewer, larger sources with steadier heat value, and MoSPI data show Gujarat alone generated 3.91 million metric tons of hazardous waste in 2020-21. Biomass follows, as Geoclean set up 50,000 metric tons a year of agro-waste supply for the Ambuja Marwar plant in March 2024. RDF grows fastest at 12.00% a year as the Solid Waste Management Rules, 2026, in force since April 1, 2026, set a rising RDF floor for cement plants.

How do municipal and industrial suppliers compare?

Based on supplier, the market is categorized into municipal and industrial. Industrial suppliers led with 57.0% of 2025 value because chemical, pharmaceutical and engineering plants sign long contracts for waste destruction, and Gujarat, Rajasthan, Tamil Nadu and Maharashtra together reported about 6.95 million metric tons of hazardous waste in 2020-21, according to MoSPI. Biomass aggregators that bale crop residues for kilns are also counted in this group. Municipal supply grows fastest at 11.89% a year as city bodies sign offtake deals, and Bengaluru Solid Waste Management agreed in December 2025 to send 200 to 250 metric tons of RDF a day to Dalmia Cement.

Why do large cement groups buy most kiln fuel?

Based on producer, the market is categorized into large cement groups and mid-size & regional producers. Large Cement Groups led with 64.0% of 2025 value because UltraTech Cement alone used 2.57 million metric tons of waste as alternative fuel in its kilns and captive power plants in FY26, according to its bond report, against about 7 million metric tons burned in kilns nationally, as CII stated. ACC added about 4.5 lakh metric tons in FY26, Business Today reported. Mid-size & Regional Producers grow fastest at 11.88% a year as the Solid Waste Management Rules, 2026 extend an RDF floor of 5% rising to 15% to every cement plant, Drishti IAS reported.

Net-zero roadmaps and RDF rules raise substitution

Decarbonization targets push kilns off coal

Cement producers are raising alternative fuel use because fuel combustion is a large share of their emissions and net-zero plans now set dated substitution goals. ACEEE reported in July 2026 that fuel burning causes about 32% of Indian cement emissions and that alternative fuels supply only about 6% of kiln heat. The NITI Aayog roadmap for cement decarbonization, released in January 2026, targets a 20% to 25% thermal substitution rate by 2030, according to Indian Cement Review. Geoclean, the waste arm of Ambuja Cements and ACC, is aiming for a 25% rate by 2027-28. In the Credence Research model this adds about 4.6 percentage points to annual demand growth to 2035.

Municipal and industrial waste processing widens feedstock

More processed waste is reaching kilns because cities and states now require segregation and RDF recovery from dry waste. India generates about 62.4 million metric tons of municipal solid waste a year, Indian Cement Review reported in April 2026, citing CPCB and NITI Aayog. The Solid Waste Management Rules, 2026 took effect on April 1, 2026, with four-stream segregation at source. Andhra Pradesh asked plants within 400 km of its towns in March 2025 to take RDF from 7,000 metric tons a day of waste collected by 123 urban local bodies, Global Cement reported. Karnataka already makes about 215 metric tons of RDF a day from dry waste, Renewable Watch reported in March 2025. In the Credence Research model this adds about 2.9 percentage points to annual demand growth.

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Higher substitution rates create recurring supply contracts

Each step up in thermal substitution turns into a standing order for fuel, because a kiln that reaches double-digit substitution must be fed every day of the year. UltraTech Cement used 2.57 million metric tons of waste as alternative fuel in its kilns and captive power plants in FY26, reaching a 6.6% kiln rate. ACC co-processed about 4.5 lakh metric tons of alternative fuels and waste-derived materials in FY26, Business Today reported in June 2026. Geoclean's Ambuja Marwar facility, opened in March 2024, converts 220,000 metric tons of waste a year and lifts that plant well into double-digit substitution. In the Credence Research model this adds about 1.9 percentage points to annual demand growth to 2035.

Rising output and petcoke prices raise fuel savings

Growing clinker output and volatile fossil fuel prices raise the value of every metric ton of fuel a kiln can replace. Cement production rose 8.6% to 491.4 million metric tons in FY26, Construction World reported in May 2026. The same report put petcoke at about Rs 15,800 a metric ton in April 2026, up 22% from a year earlier, against imported coal at USD 102 a metric ton. CII said in October 2026 that the sector now burns about 7 million metric tons of alternative fuel a year at a 7.5% substitution rate, after more than Rs 12 billion of co-processing investment in six years. As a result, more plants can justify pre-processing lines that pay back on fuel savings.

City offtake deals and plant pre-processing reshape supply

Shift toward city RDF offtake contracts

Cement groups are shifting from spot purchases to standing offtake contracts with city waste bodies, which gives them steadier volumes and gives cities a disposal outlet. Bengaluru Solid Waste Management agreed in December 2025 to send 200 to 250 metric tons of RDF a day to Dalmia Cement in Kadapa, and Dalmia offered to accept up to 1,000 metric tons a day. Bhubaneswar Municipal Corporation extended its deal with Dalmia Cement by another 70,000 metric tons in July 2024, Global Cement reported. Tiruchi has diverted 2,384 metric tons of plastics to Dalmia and UltraTech plants since July 2024, Global Cement reported in September 2025. Municipal supply therefore grows at 11.89% a year in the Credence Research model.

Rise of pre-processing platforms at cement plants

Producers are building their own shredding, drying and feeding platforms, because raw city waste is too mixed to fire without preparation. Geoclean opened the Ambuja Marwar pre-processing and co-processing facility and the ACC Jamul co-processing facility in March 2024, with capacity for 220,000 and 120,000 metric tons a year, Cemnet reported. Zuari Cement, part of Heidelberg Materials, installed an RDF line at Yerraguntla in Andhra Pradesh that processes 20 metric tons an hour, Bioenergy International reported in September 2023. Indian Cement Review noted in April 2026 that meaningful coal displacement needs 40 to 70 metric tons an hour of processing. As a result, fuel preparation is moving inside cement companies.

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Agro-residue biomass supply chains near plants

Crop residues offer an opening for suppliers that can collect, bale and deliver biomass on a fixed schedule, because kilns need steady volumes after the harvest season ends. The Ambuja Marwar Farmer Producer Organization supplies 50,000 metric tons a year of agro-waste to the Marwar facility, according to The CSR Journal. The same facility has capacity to convert 220,000 metric tons of waste a year into kiln fuel. UltraTech signed an MoU with Punjab Renewable Energy Systems in October 2021 to replace coal with biomass at three units, saving more than 150,000 metric tons of CO2 a year, T&D India reported. JSW Cement signed a similar agri-waste deal with the same aggregator in April 2022, according to Cemnet. Aggregators that add storage near plants can therefore win multi-year supply contracts.

Tyre EPR rules open a kiln route for scrap tyres

End-of-life tyres offer a second opening, because producer responsibility rules now push tyre makers to pay for certified disposal. Under the waste tyre EPR rules, producers had to cover 100% of their 2020-21 output in 2024-25, Drishti IAS reported in September 2024. The same guidelines set penalties of up to Rs 8.40 per kg for missed targets and banned tyre imports for pyrolysis oil or char. CSE reported in July 2025 that India recycles more than 3 million metric tons of waste tyres a year, with nearly three-fourths sent to pyrolysis. Kilns that burn shredded tire chips can take part of that stream.

Wet waste, long hauls and cheap coal slow substitution

Wet and mixed city waste lowers heat value

Poorly segregated city waste reaches kilns wet and mixed, which cuts heat value and damages feeding equipment. Plants told Down To Earth in October 2023 that incoming waste carried 30% to 50% moisture and 30% to 40% ash. Wonder Cement's 5,000-ton storage shed received about 300 metric tons a day, below its design input, the same report said. Plants respond with drying, sorting and penalties linked to calorific value, which raise handling costs before any coal is saved.

Long hauls push up delivered fuel costs

Freight is a large share of delivered fuel cost, because many plants sit far from the cities that produce RDF. Down To Earth reported in October 2023 that companies source waste from 500 to 1,000 km away and that one truck of coal equals nine trucks of waste in heat value. The Kalaburagi cement hub is more than 400 km from Bengaluru, Renewable Watch noted in March 2025. Long hauls narrow savings, so plants prefer nearby industrial waste and biomass where they can find it.

Contract disputes interrupt municipal supply

Municipal supply can stop abruptly when plants, transporters and city bodies fall out, leaving RDF stranded at landfills. The Tribune reported in February 2023 that Ambuja's Darlaghat plant and ACC's Barmana plant in Himachal Pradesh had been shut since Dec. 15, 2022, so RDF piled up at the Solan and Shimla disposal sites. Such breaks hurt both sides, as cities miss disposal targets and kilns fall back on coal. Longer written offtake contracts with fixed quality bands reduce that risk.

Lower coal prices narrow the fuel saving

Alternative fuel competes with coal on delivered heat cost, so cheaper coal weakens the case for new pre-processing lines. Construction World reported in May 2026 that imported coal fell 17% from a year earlier to USD 102 a metric ton in April 2026. Indian cement plants also pay city bodies for RDF, unlike plants in Germany or the U.S. that local governments often pay to take waste, Renewable Watch noted in March 2025. Mandated RDF shares under the 2026 rules keep demand steady when coal is cheap.

West India leads on Gujarat and Maharashtra waste streams

West India leads on Gujarat and Maharashtra waste

West India held 34.0% of 2025 value and grows at 10.53% a year, the largest base in the country. MoSPI EnviStats data show Gujarat generated 3.91 million metric tons of hazardous waste in 2020-21 and Maharashtra 0.84 million metric tons, much of it suitable for co-processing. Maharashtra also generated about 8.26 million metric tons of municipal solid waste that year, the most among reporting states. Growth is slightly below the national rate because industrial waste contracts are already well developed in these states.

South India gains on city RDF offtake deals

South India held 29.0% of 2025 value and grows at 11.13% a year. The zone has the most active city offtake deals, including Bengaluru's December 2025 supply agreement with Dalmia Cement in Kadapa and Tiruchi's plastics diversion since July 2024. Andhra Pradesh asked plants in March 2025 to raise RDF use, and Kerala converted about 48,000 metric tons of non-recyclable waste into RDF for cement plants in 2023, Global Cement reported. Tamil Nadu also generated 1.07 million metric tons of hazardous waste in 2020-21, according to MoSPI.

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North India builds on Rajasthan and Himachal plants

North India held 21.0% of 2025 value and grows at 11.03% a year. Rajasthan generated 1.13 million metric tons of hazardous waste in 2020-21, according to MoSPI, and Geoclean's Marwar facility in the state converts 220,000 metric tons of waste a year. In Himachal Pradesh, UltraTech signed an MoU in February 2025 to co-process non-recyclable plastic from 29 department units at its Baga kiln, ThePrint reported. Delhi landfill RDF also reaches plants, as JK Cement agreed in 2022 to remove 50,000 metric tons a year.

East India grows on Odisha city waste deals

East India held 8.0% of 2025 value and grows at 11.53% a year, faster than the national rate. In Odisha, Bhubaneswar Municipal Corporation sent about 50,000 metric tons of RDF to Dalmia Cement's Rajgangpur plant in six months and extended the deal by 70,000 metric tons in July 2024, Global Cement reported. The zone has about 135 million metric tons a year of cement capacity, according to IBEF. City supply is still thin outside the state capitals, so most plants rely on industrial and biomass fuel.

Central India rises with new co-processing lines

Central India held 6.0% of 2025 value and grows at 11.73% a year, among the fastest zones. Geoclean opened the ACC Jamul co-processing facility in Chhattisgarh in March 2024, which handles 120,000 metric tons of alternative fuel a year and lifts the plant to a 10% rate. IBEF data put Central India cement capacity at about 91 million metric tons a year. More plants in the zone can add co-processing as nearby cities expand dry waste collection under the 2026 rules.

Northeast India starts from new Assam capacity

Northeast India held 2.0% of 2025 value and grows at 12.13% a year, the fastest rate of any zone. JK Lakshmi Cement is building a Rs 110 billion plant at Umrangso in Assam with 2.5 million metric tons of cement and 1 million metric tons of clinker capacity, due by FY2029, Indian Cement Review reported. New clinker lines can be designed for alternative fuel feeding from the start. Growth stays small in absolute terms because the zone has few kilns today.

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Rules, offtake deals and co-processing lines, 2024 to 2026

Shredders, feeders and lab checks lift kiln substitution

• Primary and secondary shredders cut mixed waste to 30 mm to 80 mm pieces, and Indian suppliers now offer units rated at up to 40 metric tons an hour.
• Calciner feeding systems let plants fire coarse RDF and tyre chips in the precalciner, where lower temperatures allow larger fuel pieces.
• Drying and storage sheds reduce moisture in monsoon waste, which can exceed 40% to 50% and lowers usable heat value.
• Online fuel quality checks track calorific value and chlorine, so plants can price deliveries and protect kilns from buildup.

Cement groups build their own waste arms

Competition in kiln fuel is shaped by cement groups that own waste arms and by independent processors that sell to them. Geoclean, the waste business of Ambuja Cements and ACC, runs pre-processing and co-processing sites across both companies' plants. UltraTech Cement buys municipal and industrial waste for its kilns and signs state agreements such as the Himachal Pradesh plastics MoU. Dalmia Bharat has built municipal offtake deals in Bhubaneswar, Tiruchi and Bengaluru. JK Cement and Zuari Cement, part of Heidelberg Materials, run their own RDF intake and shredding. Biomass aggregators such as Punjab Renewable Energy Systems supply crop residues under multi-year agreements. Fuel preparation links to refuse-derived material processing, and the winners are the groups that secure close and steady sources of dry waste.

Companies profiled and their roles in this market

Owned supply chains will decide who reaches 20% TSR

Credence Research's view is that owned supply chains will decide which producers reach the NITI Aayog substitution goal as the market grows from USD 320.0 million through 2035. The rules now set a rising RDF floor for every plant, but city waste is still wet and far from many kilns. Producers that combine local industrial waste, biomass contracts and city RDF deals will cut freight and quality risk. Plants that pair fuel switching with low-clinker blends gain the most on emissions. RDF grows fastest at 12.00% a year, so municipal offtake becomes the core supply route by 2035.

How the kiln fuel value model was built

The report uses 2025 as the base year and forecasts to 2035. Market values come from the Credence Research model, built from national cement output, clinker ratio, kiln heat demand, reported thermal substitution rates and delivered prices for each fuel. Regional, fuel and supplier splits are Credence Research estimates built from these public inputs. Inputs include MoSPI environment statistics, government rules and state notices, company sustainability reports, industry association statements and trade press coverage. The report did not conduct interviews or surveys, and it relies only on published sources.

Mandated RDF and biomass carry demand to 2035

Through 2035 the market grows at an 11.00% CAGR to reach USD 920.9 million, as mandated RDF shares, net-zero targets and new clinker capacity raise the amount of waste and biomass that kilns burn. West India keeps the lead on its industrial waste base, while Central and Northeast India grow fastest as new plants come online. Municipal RDF will take a larger share as segregation under the 2026 rules improves feedstock, even as city waste-to-energy plants bid for the same dry waste. Producers with pre-processing platforms and close supply contracts should capture most of the added value.

Note: The depth of individual sections depends on data availability for this market. Volume, capacity, trade and other unit-based metrics are included where applicable.