After Reading This Article You Can Solve This UPSC Mains Model Question:
Industrial decarbonisation is critical for achieving India’s net-zero target. Examine the limitations of India’s current industrial climate strategy and suggest measures to improve emission mitigation across all industrial sectors. 15 Marks (GS-3, Environment)
Why in the News?
India’s BTR-1 submitted to the UNFCCC reveals that over 20% of national emissions come from industry, with nearly 40% classified under “non-specific industries” that remain largely outside existing decarbonisation policies.
Introduction
India’s goals of Make in India, Viksit Bharat@2047, and Net-Zero 2070 require rapid industrial growth, but rising industrial emissions and the limited coverage of PAT and CCTS expose significant gaps in the country’s decarbonisation strategy..
Industrial Sector and India’s Emissions Profile
Key Findings from First Biennial Transparency Reports
- Industrial sector contributes more than 20% of India’s total emissions.
- Fuel consumption in manufacturing industries and construction contributes around 13%.
- Industrial Processes and Product Use (IPPU) contribute another 9%.
- Industrial emissions continue to rise with economic growth and urbanisation.
Why the Industrial Sector Matters?
- Central to India’s economic growth and employment generation.
- Major consumer of commercial energy.
- Critical for achieving Net-Zero 2070 commitments.
- Determines India’s ability to balance development with climate action.
Emissions Puzzle
- Identified industrial sectors contribute around 55% of manufacturing emissions.
- Nearly 40% of emissions are classified under “Non-Specific Industries”.
- Similar trends observed in 2014, 2016, 2019, and 2020, indicating a persistent policy blind spot.
India’s Existing Industrial Decarbonisation Framework
1. Perform, Achieve and Trade (PAT) Scheme
Objective:
Improve energy efficiency in energy-intensive sectors by reducing the amount of energy consumed per unit of output, thereby lowering overall industrial energy demand and emissions.
Coverage:
Includes Thermal Power Plants, Railways, DISCOMs, Commercial Buildings, and major energy-intensive industries such as cement, steel, aluminium, fertilizers, and paper sectors.
Mechanism:
The government sets specific energy consumption reduction targets for designated consumers, and entities exceeding targets earn Energy Saving Certificates (ESCerts), which can be traded with underperforming units.
2. Carbon Credit Trading Scheme (CCTS)
Objective:
Reduce greenhouse gas emission intensity across industrial sectors through a market-based carbon pricing and trading mechanism.
Covered Sectors:
Includes Aluminium, Cement, Fertilizers, Iron & Steel, Petrochemicals, Petroleum Refineries, Pulp & Paper, Textiles, and Chlor-Alkali industries, which are among India’s major industrial emitters.
Mechanism:
Sector-specific emission benchmarks are prescribed, and industries that reduce emissions beyond targets earn carbon credits that can be traded with entities failing to meet their emission reduction obligations.
Challenges Associated with the Current Industrial Decarbonisation Model
1. Limited Sectoral Coverage
Existing mechanisms such as PAT and CCTS primarily target traditional heavy-emitting industries, leaving a substantial share of emissions from “non-specific industries” outside the regulatory framework.
2. Lack of Granular Emissions Data
The broad classification of non-specific industries obscures the actual sources of emissions, making it difficult to identify high-emitting sub-sectors and design targeted interventions.
3. Weak Monitoring and Accountability
Inadequate sectoral disaggregation hampers effective monitoring of emission trends, assessment of policy outcomes, and identification of major polluters.
4. Policy and Regulatory Gaps
The absence of detailed sector mapping creates policy blind spots, preventing the expansion of mitigation measures to emerging and previously unregulated industries.
5. Misalignment Between Industrial Growth and Climate Goals
Rapid industrial diversification under initiatives such as Make in India and Viksit Bharat is not adequately integrated with climate mitigation strategies, resulting in fragmented policymaking.
6. Risk to Net-Zero Targets and Equitable Transition
Excluding nearly 40% of industrial emissions from mitigation frameworks undermines India’s decarbonisation pathway while placing disproportionate compliance burdens on a limited set of industries.
Way Forward
1. Disaggregate “Non-Specific Industries”
The government should identify and classify the industries grouped under the “non-specific industries” category to accurately locate emission hotspots and design targeted mitigation measures.
2. Expand Coverage of CCTS and PAT
India’s carbon trading and energy efficiency frameworks should gradually include currently uncovered sectors to ensure comprehensive industrial decarbonisation and equitable regulatory coverage.
3. Develop Sector-Specific Decarbonisation Roadmaps
Tailored transition strategies should be prepared for different industries based on their technological maturity, energy requirements, and emission profiles to facilitate a realistic green transition.
4. Strengthen Industrial Emissions Database
A robust, real-time emissions monitoring and reporting system should be established to improve data accuracy, policy evaluation, and regulatory oversight.
5. Improve Transparency in Climate Reporting
More detailed and disaggregated emissions inventories should be published to support evidence-based policymaking and strengthen accountability in climate governance.
6. Promote Adoption of Green Technologies
Industries should be incentivized to adopt Green Hydrogen, renewable energy, process electrification, carbon capture technologies, and circular economy practices to reduce their carbon footprint.
7. Integrate Climate Goals with Industrial Policy
Climate objectives should be embedded within flagship initiatives such as Make in India, the National Green Hydrogen Mission, Net-Zero Strategy, and industrial development policies to ensure sustainable growth.
8. Strengthen Institutional Coordination
Greater coordination among the Ministry of Environment, Forest and Climate Change, Ministry of Power, Ministry of Heavy Industries, and NITI Aayog is essential for coherent policy formulation and effective implementation of decarbonisation strategies.
Conclusion
While India has advanced industrial decarbonisation through PAT and CCTS, achieving Net-Zero 2070 requires expanding coverage beyond traditional sectors, improving emissions transparency, and bringing all significant industrial emitters within a comprehensive climate mitigation framework.