Indian Manufacturing Industry's Path towards Green Future

The world economy is battling inflation accentuated by the energy crisis. There was a period of oil shocks and soaring inflation in the 1970s and early 1990s when the world was in this situation before. But this is a rude shock to the globe as it was just overcoming the nightmares of the pandemic. Should this be a wake-up call for India? India can use this situation as a blueprint and set the foundation for a cleaner, cheaper, more resilient, and self-sufficient energy infrastructure.

Fortunately for India, the government began advocating the goal of "Net Zero" emissions well before the energy crisis, not as a reaction to it but for the sake of the greater good of humanity. India pledged to cut greenhouse gas emissions by 45% from 2010 by 2030 to achieve net-zero emissions by 2070. At the COP26 conference in Glasgow, Prime Minister Narendra Modi unveiled the "Panchamrit" five-pronged strategy to combat climate change. The pledge to meet 50% of its energy needs from renewable sources by 2030 is one of this policy draft's standout elements.

India's path towards 'Net Zero' would be challenging as India's GHG (Greenhouse Gas) emissions would be peaking by 2040s. Further Mitigation required to become Net Zero by 2070 will be exponentially higher than historic performance on this count. Despite several efforts by the government and industry players, India faces several pressing near-term challenges.

Interventions for accelerating Decarbonization for the Indian manufacturing Industry:

Energy efficiency- Energy Efficiency will play a major role by contributing 44% in BAU (Business as Usual) and 32% in Deep Decarbonization Scenario for the Indian Industry. To achieve the nation's goal of improvement in energy intensity per unit of GDP, the industry will have to invest in technologies, processes, and end-mesh. This will require a rate of progress more than double what it has been in the past. For example, standards and labeling by the Bureau of Energy Efficiency (BEE), Energy Conservation Building Codes (ECBC) by the Ministry of Power, and the Promotion of Electric vehicle: - National Electric Mobility Mission Plan (NEMMP), among others, all contribute to achieving energy efficiency goals.

Use of the Renewables and Clean Technologies- The emphasis laid by the government on green energy has opened the floodgates. The industry is geared up to leverage tremendous opportunities available in the energy transition field. Advancement in technologies is enabling corporates to procure round-the-clock green power. RE deployment is expected to double (or even triple), and more than 30% of industrial emission mitigation depends on EE measures. Renewable electricity is growing fast in India, with new capacity additions doubling by 2026. The share of solar and wind in India's energy mix have grown phenomenally.

Circular Economy or Value Chain Mobilization- Circularity is about the 5Rs: Reduce, Repair, Resell, Refurbish and Recycle. Value chain emissions constitute more than a company's total carbon footprint. The transition can be based on the redesign of the supply chain. Innovations in logistics is a key enablers to drive circularity when it comes to optimizing production volumes, enhancing the life cycles of the products, and devising end-of-life recycling.

Biomass, Hydrogen, and Other Zero Carbon Fuels- Many futuristic technologies like Hydrogen, CCUS, Fuel Cells, etc., are still nascent and have high-cost implications. India is one of the world's largest producers of modern bioenergy. Hydrogen has the potential to decarbonize transportation, heating systems, and industrial operations, which are currently challenging to decarbonize through renewable energy. On the one hand, these technologies require a huge push on the policy front, but industry leaders also need to come forward and demonstrate their commitment to adopting the same.

Carbon Capture Utilization and Storage (CCUS)- With CCUS, carbon can be captured from large point sources and energy facilities that burn fossil fuels or biomass. According to the IEA, the role of CCUS in achieving net zero emissions is crucial, since, without it, options for tackling heavy industry emissions would be limited or nonexistent.

Way Ahead – International Energy Agency (IEA), in its report on achieving Net Zero for Heavy Industry Sectors recommends:

Foster innovation and green finance in heavy industry | Near-zero emission technologies should be funded with grants and low-interest loans. These funds would benefit industrial plants, logistics, storage, and related areas.

Promote demand for near-zero technologies | By encouraging the use of materials with near-zero emissions, the government can help boost demand. Long-term public-sector procurement is an example of government support.

Uniform industry standards and tools | Measurements are being developed to assess carbon emissions across industries and nations. As a result, governments can agree on a common reporting framework.

The clarity in the taxonomy |Existing efforts undertaken by the industry and the governments; IEA suggests can be termed as "low emission production." This way, it can be differentiated from net zero emissions.

A shift to green energy is a huge economic opportunity. As a large developing economy with over 1.3 billion people, India's energy ambitions are not just transformational for India but the entire planet.