Net Zero Strategies

by | Aug 10, 2024 | Uncategorized

  1. Net Zero Strategies

The global push towards net zero emissions has become a defining challenge of our time, requiring concerted efforts from governments, industries, and organisations worldwide. As countries and companies set ambitious targets to reduce greenhouse gas emissions, the focus on sustainable practices has intensified.

This blog post delves into how Indian organisationsperform in their net zero initiatives, the impact of global net zero aspirations on India’s strategies, and the influence of India’s regulations on these efforts.

  1. India’s Performance in Net Zero Initiatives

India accounts for 7.3% of global GHG emissions and ranks as the third largest emitter after China and the United States. However, the per capita annual emission is around 2 MtCO2e,less than half of the global per capita emissions average,4.6MtCO2e,due to its larger population.[1].

India has committed at COP26-2021 to achieving net-zero emissions by 2070, aligning with the global decarbonisation push. This ambitious target is part of India’s long-term strategy to transition to a low-carbon economy. By 2030, India aims to achieve 500 GW of non-fossil fuel energy capacity, a significant increase from the current capacity. Additionally, India targets a 45% reduction in emissions intensity of its GDP by 2030, compared to 2005, demonstrating its commitment to sustainable development.

India has made remarkable strides in renewable energy, particularly solar and wind power, instilling optimism in its net zero initiatives.

  • As of May 2024, India has an installed solar capacity of approximately 84.27 GW, making it one of the largest solar markets globally.2
  • The wind energy capacity is around 46.92 GW, theworld’sfifth-highest wind installed capacity.The government promotes wind power projects throughout the country through private sector investment.2
  • As of May 2024, India’s installed non-fossil fuel capacity(renewable energy capacity)is more than 201.75 GW (including large Hydro and nuclear), 45.3% of the country’s total capacity.[2]

India’s high ranking of seventh in the 2024 Climate Change Performance Index(CCPI), an annual ranking of countries’ climate protection performance, is a significant reflection of the country’s efforts and progress in reducing greenhouse gas emissions and transitioning to a low-carbon economy. With high ratings in the GHG Emissions and Energy Use categories and a medium rating for Climate Policy and Renewable Energy, India’s strong performance in these areas is a source of pride.[3] Notably, India is on track to meet its 2030 emissions targets, i.e. decarbonising energy to 50% and achieving 500 GW of fossil fuel-free generating capacity.[4], compatible with a well-below-2°C scenario, a critical global climate goal.

  1. Impact of Global Net Zero Aspirations on India

Global net-zero aspirations, primarily driven by developed nations and international organisations, influence India’s strategies considerably.

Policies like the EU’s Carbon Border Adjustment Mechanism (CBAM) can impact India’s exports. CBAM is a tool to put a fair price on the carbon emitted while producingcarbon-intensive goods entering the EU and encourage cleaner industrial production in non-EU countries.[5]Indian industries must adapt to avoid potential tariffs on carbon-intensive goods.

India’s participation in alliances like the International Solar Alliance (ISA) and the Coalition for Disaster Resilient Infrastructure (CDRI) is a clear indication of its commitment to global climate goals. The ISA, an action-oriented, member-driven, collaborative platform for increased deployment of cost-effective solar energy technologies, and the CDRI, which promotes the resilience of new and existing infrastructure systems to climate and disaster risks in support of sustainable development, are key pillars of India’s global climate action strategy.[6] CDRI promotes the resilience of new and existing infrastructure systems to climate and disaster risks in support of sustainable development.[7]

India requires considerable financial resources to transition to a low-carbon economy. Global commitments, such as the $100 billion per year pledge by developed countries, are crucial. However, this target has not been fully met.

Advanced technologies in renewable energy, energy storage, and carbon capture are essential for India. International cooperation can facilitate access to these technologies.

  1. Influence of Indian Regulations on Net Zero Goals

India’s regulatory framework plays a pivotal role in shaping the net-zero strategies of both the nation and its corporations. The key policies are given below.

4.1. National Action Plan on Climate Change (NAPCC)

The NAPCC outlines eight missions to promote sustainable development, including the National Solar Mission, the National Mission for Enhanced Energy Efficiency (NMEEE), and the National Mission on Strategic Knowledge for Climate Change.[8]

NMEEE aims to strengthen the energy efficiency market by creating a conducive regulatory and policy regime. One of the initiatives of NMEEE is Perform, Achieve and Trade (PAT), which is a mechanism for improving the energy efficiency of energy-intensive industries.[9]

  • It was designed to reduce the specific energy consumption (SEC), i.e. energy used per unit of production of 478 industrial units in 8 sectors.
  • Energy-saving targets were given to these 478 industrial units called Designated Consumers (DCs).
  • Units that achieved SEC levels lower than their targets could receive energy savings certificates (ESCerts) for excess savings.
  • The total volume of ESCerts traded was about 12.98 lakhs, resulting in a business of about INR 100 crores in the first PAT cycle, completed in 2015.
  • In PAT-II (621 DCs, 11 sectors), 2016-2019, the Ministry of Power issued about 57.38 lakh ESCerts.

4.2. Energy Conservation Act, 2001

This act mandates energy efficiency improvements across various sectors. Amendments and enhancements to this act continue to drive energy efficiency initiatives, including energy-saving certificates and trading those certificates.[10]

4.3. Renewable Purchase Obligations

State electricity regulatory commissions (SERCs) mandated by the Electricity Act 2003 (EA 2003) imposed renewable purchase obligations (RPOs) on distribution companies (discoms) to purchase a certain percentage of electricity from renewable energy (RE) sources. It has been a critical policy intervention for scaling up renewables.Central government-mandated RPO share is expected to touch 43% of total energy consumption by 2030. RPOs will be a crucial intervention for achieving India’s climate commitments.[11]

As of May 2024, India’s total renewable energy capacity is around 201.75 GW, with significant solar and wind power contributions.2

In 2021, SEBI introduced the Business Responsibility and Sustainability Reporting (BRSR framework), which mandates sustainability reporting for large companies and promotes transparency and accountability on environmental issues.

  1. Indian Organizations on Net Zero

Indian organisations are making significant progress in their net zero initiatives, driven by global aspirations and national regulations. The Science Based Targets initiative (SBTi) and alignment with the Task Force on Climate-related Financial Disclosures (TCFD) are becoming common among leading companies.

5.1. Strategies for Achieving Net Zero

Achieving net zero requires a multi-faceted approach, incorporating technology, innovation, and strategic planning. Indian organisations can adopt several effective strategies to meet their net-zero targets.

Renewable energy sources such as solar, wind, and hydro are critical forovercoming our reliance on fossil fuels. Areas such as long-haul heavy vehicles and specific manufacturing industries require advanced technologies and green hydrogen to overcome dependence on fossil fuels.

  • While great for short-haul electric vehicles, batteries struggle with the range and refuelling times needed for long-distance heavy vehicles. Green hydrogen, used in fuel cells, can provide a clean alternative with ranges comparable to conventional diesel or petrol.
  • Manufacturing processes in industries like steel, chemicals, and fertilisers often rely on fossil fuels for heat generation, leading to high CO2 Green hydrogen can replace these fuels, enabling clean production of essential materials.
  • Compressed natural gas (CNG) engines can be used as a transitional technology for reducing emissions in long-haul vehicles until electric with better battery capacity & infrastructure or green hydrogen are feasible for long-haul vehicles.

Renewable energy sources like solar and wind are variable.  Green hydrogen production can utilise excess renewable energy during peak generation periods.  The hydrogen can then be stored and used to generate electricity when renewable sources aren’t producing enough.

Carbon Capture and Storage technology is versatile and applicable across several critical sectors, such as coal-fired & natural gas power plants, industrial Processes (cement production, steel manufacturing, and chemical production), and the oil & gas industry.

A combination of renewable energy, advanced technologies like green hydrogen, and carbon capture strategies are crucial for Indian organisations to achieve net-zero goals and transition away from fossil fuel dependence.

5.2. Indian Organization’sCommitment to Net Zero

Some Indian organisations, such as Mahindra& Mahindra[12] and Vedanta[13], have established internal carbon pricing to facilitate climate funding within the organisation.

  • Mahindra Group is committed to achieving net zero by 2030 for Scope 1 and Scope 2 emissions through renewable energy usage and energy efficiency.[14] Tata Consultancy Services has set a target to net zero emissions by 2030.[15]
  • Indian Railways is committed to becoming a net zero carbon emissions organisation by 2030.[16]
  • Reliance Industries is committed to achieving net zero by 2035.[17]
  • Wipro has set a Science-based Targets Initiatives (SBTi) target andis committed to achievingnet zero by 2040.[18]
  • Tata Power has pledged to achieve 100% generation through a clean and green portfolio before 2045 by prioritising universal energy access, energy efficiency, breakthrough clean technologies, and electric mobility.[19]

Leading Indian organisations are taking significant steps towards achieving net zero carbon emissions, demonstrating a solid commitment to sustainability and climate action.

5.3. Role of Sustainability Consultancies

Sustainability consultancies are crucial partners for organisations striving to integrate sustainability and achieve net zero emissions.Expertise in environmental management, regulatory compliance, and innovative sustainable practices can significantly accelerate an organisation’s journey to net zero.By leveraging the services of sustainability consultancies, organisations can meet regulatory requirements and gain a competitive edge, enhance their reputation, and contribute meaningfully to global climate goals.

  1. Conclusion

India imports over 40% of its primary energy requirements, worth over USD 90 billion annually. Being a diesel-based economy, most commercial vehicles for passenger and freight services use diesel as fuel. Thisnecessitates a shift towards technologies enabling an increased share of renewable sources in the energy mix and progressively reducing reliance on fossil fuels.The feasibility of carbon capture and storage technologyfor the hard-to-abate sectors is crucial. Green hydrogen is the way to mitigate long-haul vehicles’ reliance on diesel and manufacturing industries’s reliance on coal for heat energy.The National Green Hydrogen Mission aims to leverage India’s renewable energy potential and pave the way for the green hydrogen ecosystem.

In 2024, India willhave  $16.5 billion in renewable energy investments.[20] Despite progress, India faces a climate finance gap and needs $2.5 trillion by 2030 to meet its climate targets.

[1] https://iea.blob.core.windows.net/assets/33e2badc-b839-4c18-84ce-f6387b3c008f/CO2Emissionsin2023.pdf

[2] https://www.investindia.gov.in/sector/renewable-energy

[3]https://ccpi.org/country/ind/

[4]https://www.energy-transitions.org/publications/roadmap-to-indias-2030-decarbonization-target/#:~:text=India’s%20decarbonization%20target,free%20generating%20capacity%20by%202030.

[5] https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en

[6]https://isolaralliance.org/about/background

[7] https://www.cdri.world/cdri-overview

[8] https://static.pib.gov.in/WriteReadData/specificdocs/documents/2021/dec/doc202112101.pdf

[9] https://beeindia.gov.in/en/programmes/perform-achieve-and-trade-pat

[10] https://www.indiacode.nic.in/bitstream/123456789/2003/1/A2001-52.pdf

[11]https://energy.economictimes.indiatimes.com/news/renewable/new-renewable-purchase-obligations-why-they-are-both-difficult-and-easy/105420618

[12]https://www.mahindra.com/blogs/carbon-neutral-by-2040-science-based-targets-in-place

[13]https://www.vedantalimited.com/vedanta-sr3/aim-4.html

[14] https://www.mahindra.com/sites/default/files/2023-10/Mahindra-Sustainability-Report-2022-23.pdf

[15]https://www.tcs.com/who-we-are/newsroom/press-release/tcs-targets-net-zero-emissions-by-2030

[16]https://indianrailways.gov.in/railwayboard/uploads/directorate/secretary_branches/IR_Reforms/Green%20Railways%20(use%20of%20renewable%20energy).pdf

[17]https://www.ril.com/sites/default/files/2023-08/BRSR202223.pdf

[18]https://www.wipro.com/content/dam/nexus/en/sustainability/sustainability_reports/wipro-sustainability-report-fy-2022-2023.pdf

[19]https://www.tatapower.com/investor-relations/tata-power-2023/decarbonisation-roadmap.html

[20] https://www.business-standard.com/industry/news/renewable-energy-investments-to-increase-83-to-16-5-billion-in-2024-123122600251_1.html

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