Reinforcing its commitment to achieving net zero by 2070, WRI India has unveiled its expert note, Pathways to Net Zero: Policies and Measures for Industrial Decarbonization in India. Launched at a convening in New Delhi, the report highlights key strategies for making India’s industries cleaner and more sustainable through early action, innovative policies, and targeted investments.
The Critical Role of Industrial Decarbonization
Industries are a backbone of India’s economy, contributing 25 percent to the nation’s gross value added (GVA) in 2019. However, they are also a major source of carbon emissions, accounting for 30 percent of the country’s total emissions.
Without additional decarbonization policies, industrial emissions could nearly triple by 2050, underscoring the urgent need for policy-driven interventions that balance emissions reduction with economic competitiveness.
The WRI expert note outlines six key policy recommendations to accelerate industrial decarbonization in India. (The Theorist Photos)
Projected Emission Reductions and Key Interventions
The WRI expert note examines emission reduction measures through a long-term decarbonization (LTD) scenario aligned with India’s net zero goal. Using the India Energy Policy Simulator (EPS), WRI India projects that industrial emissions could be reduced by 65 percent in 2050 compared to a reference scenario without additional policies. The study estimates that cumulative emissions could decline by 29,388 Million Metric Tonnes CO2 equivalent (MMtCO2e) between 2020 and 2050 through the following interventions:
Industrial electrification and hydrogen mandate: A shift from fossil fuels to electrification and hydrogen, starting in 2025 and reaching 50 percent substitution by 2050, could cut emissions by 12,367 MMtCO2e (42 percent of total reductions).
Industrial energy efficiency: Enhancing specific energy consumption by 1.3 percent annually could lower emissions by 4,606 MMtCO2e (16 percent).
Material efficiency mandates: Encouraging recycling and extending product lifespans in cement and steel industries could reduce emissions by 3,546 MMtCO2e (12 percent).
Carbon pricing: A gradually increasing carbon price from $4 per tonne of CO2 in 2019 to $50 per tonne by 2050 could contribute to a reduction of 2,945 MMtCO2e (10 percent).
The Role of Carbon Capture and Storage
Despite these measures, fossil fuels are projected to account for nearly 50 percent of industrial fuel demand by 2050. The expert note underscores the importance of Carbon Capture, Utilization, and Storage (CCUS) in mitigating residual emissions, particularly in cement and chemical industries.
The expert note underscores the urgency of industrial decarbonization to align with India’s long-term climate commitments. (The Theorist Photos)
However, challenges such as high capital costs, limited geological storage data, and insufficient infrastructure must be addressed to scale up CCUS adoption.
Policy Recommendations for a Low-Carbon Future
The WRI expert note outlines six key policy recommendations to accelerate industrial decarbonization in India:
Support Low-Carbon Technologies: Investing in green hydrogen and CCUS, along with developing storage and transportation infrastructure, is essential. Financial mechanisms like sovereign green bonds and blended finance should be explored.
Scale Up Demand-Side Policies: Strengthening the implementation of policies promoting material efficiency and circular economy initiatives, such as the National Circular Economy Roadmap and Construction and Demolition Waste Management (CDWM), is crucial.
Incentivize MSME Decarbonization: Micro, small, and medium enterprises (MSMEs) require expanded access to credit guarantee schemes and public financing mechanisms to overcome financial barriers in adopting low-carbon technologies.
Promote Indigenous Manufacturing: Encouraging domestic production of low-carbon technology components, such as electrolyzers and solar PVs, will reduce import dependency and create green jobs.
Strengthen Research and Development: Increased R&D investments are needed to scale emerging decarbonization technologies.
Develop a Skilled Workforce: Training and reskilling workers for low-carbon industries, with a focus on gender-inclusive workforce strategies, will be necessary to support the transition.
A Call for Decisive Action
Speaking at the launch, Ashwini Hingne, Associate Director at WRI India, emphasized, “India’s industrial sector is at a crossroads. Decarbonization presents a major opportunity to drive economic growth, create jobs, and strengthen India’s position in global markets. This expert note offers a clear roadmap for how policymakers, industry leaders, and financial institutions can work together to accelerate this transition.”
The expert note underscores the urgency of industrial decarbonization to align with India’s long-term climate commitments. With strategic interventions, policy support, and technological advancements, the industrial sector can transition toward a sustainable future while ensuring economic growth and global competitiveness.
