Why is it in the News?

The recent heatwave has reminded us of the stark risks posed by climate change and highlighted the criticality of the efforts taken by the Conference of Parties (COP).

Context:

• The recent heatwave highlights the escalating threats of climate change, emphasizing the urgent need for robust climate action.
• The World Meteorological Organization (WMO) confirmed that 2023 was the warmest year on record, drawing renewed attention to carbon-intensive sectors like power and industry.
• As the third-largest carbon emitter globally, India faces increased scrutiny over its emissions.
• To address these challenges, significant efforts are being made to transition towards green energy, bolstered by various government initiatives and policies.

India's Green Growth Landscape: A Shift Towards Sustainable Practices

• Indian industries, particularly those in high-carbon emitting sectors, are increasingly acknowledging the importance of embracing sustainable practices.
• Many companies are taking proactive measures to transition towards renewable energy sources.
  • For example, leading firms in refining, chemical production, and fertilizers are exploring the potential of Green Hydrogen to reduce their carbon emissions.
• These sectors are crucial in India's decarbonization efforts due to their significant contribution to greenhouse gas emissions.
• Although there are no mandatory regulations for green technology adoption, many entities are voluntarily adopting these technologies.
• This shift is driven by stakeholder expectations and the recognition of transition risks, such as policy, regulatory, technology, market, reputation, and legal challenges.
• Among these risks, technological risk is the most pressing concern for entities adopting green technologies.

Challenges in India's Transition to Green Growth:

Shifting from Fossil Fuels to Renewable Energy

• Fossil fuel-based power is India's primary source of carbon emissions.
• To meet the government's climate target of increasing non-fossil power to 50% by 2030, several schemes have been launched to boost renewable energy.
• ICRA projects that India will achieve this goal, with the share of non-fossil fuel-based installed capacity rising from 41% in 2022-23 to 59% by 2029-30.
• However, this transition requires significant investment, with an estimated Rs 11-12 lakh crore needed for renewable energy power and over Rs 5-6 lakh crore for transmission infrastructure and storage capabilities.

Ensuring Continuous Renewable Energy Supply:

• Ensuring a steady supply of renewable energy is crucial to reach the targeted level, given its intermittent nature.
• Hybrid renewable energy projects (wind and solar) complemented by energy storage systems can help achieve this.
• For sectors like steel and cement, the government must explore more carbon sequestration methods, such as installing carbon capture utilisation and storage (CCUS), which is inevitable for these hard-to-abate sectors.

Challenges in the Cement Sector:

• Cement manufacturing is resource and energy-intensive, producing an equivalent amount of carbon dioxide per tonne of cement.
• CCUS can reduce 60-70% of emissions during cement manufacturing, as most emissions are generated during clinker production.
• Niti Aayog's report estimates that the cement sector needs a CCUS capacity of two million tonnes per annum by 2030, with a capital cost of Rs 1,600-1,800 crore.

Challenges in the Steel Sector:

• Due to the abundance of virgin iron ore and limited domestic scrap, the domestic steel industry primarily uses coal as a reducing agent, resulting in high emissions.
• With India's 2070 net-zero target and carbon tax policies in some countries, domestic steelmakers are focusing on reducing their carbon footprint by 25-30% through technological interventions by 2030.

Government Efforts in India's Green Energy Transition and Carbon Reduction:

• Production Linked Incentive (PLI) Scheme: The PLI scheme offers financial incentives to manufacturers, encouraging them to establish production facilities in India.
  • This strengthens the local solar manufacturing industry, making solar energy more affordable and accessible.
• Viability Gap Funding (VGF) for Offshore Wind and Battery Storage Projects: VGF schemes make large-scale renewable energy projects more financially viable, attracting private investment.
  • Offshore wind and battery storage projects particularly benefit from this support, addressing the intermittent nature of renewable energy sources.
• Faster Adoption and Manufacturing of Electric Vehicles (FAME) Scheme: The FAME scheme provides subsidies for electric vehicle (EV) purchases and supports the development of charging infrastructure.
  • This initiative aims to reduce vehicular emissions, decrease oil dependency, and promote sustainable urban mobility.
• National Green Hydrogen Mission: Green hydrogen, produced using renewable energy, has the potential to significantly reduce emissions in hard-to-abate sectors.
  • The mission supports research, pilot projects, and production facilities, positioning India as a global leader in green hydrogen technology.
• Amendments to the Energy Conservation Act: The amendments include provisions for energy efficiency standards and energy management systems.
  • These measures aim to reduce energy consumption, lower emissions, and promote sustainable industrial practices.

Recommendations for Overcoming Green Growth Challenges in India:

• Renewable Purchase Obligations (RPOs): The government should enforce mandatory percentages of electricity consumption from renewable sources.
  • RPOs require power distribution companies and large consumers to purchase a specific proportion of energy from renewables, ensuring consistent demand and promoting sector growth.
• Implementation of the National Action Plan on Climate Change (NAPCC): Policymakers should devise strategies that promote sustainable development while tackling climate change.
  • The NAPCC encompasses eight missions focusing on solar energy, energy efficiency, sustainable agriculture, and water conservation, enabling cross-sectoral efforts to integrate climate resilience and sustainability into national policies.
• Tax Incentives and Subsidies: Financial incentives should be provided to support renewable energy and green technologies.
  • Tax benefits such as accelerated depreciation and tax holidays reduce investment burdens.
  • Subsidies for solar power, electric vehicles, and energy storage systems make these technologies more accessible and appealing to consumers and businesses.
• Increased Viability Gap Funding (VGF): The government should address financial gaps in economically viable projects lacking initial investment.
  • VGF schemes make large-scale renewable energy projects, like offshore wind farms and battery storage systems, more financially viable and reduce investment risks.

Conclusion

India's journey towards embracing green energy and sustainability is characterized by both formidable hurdles and promising prospects. The proactive steps taken by the government and the enthusiastic participation of diverse stakeholders are laying the groundwork for a more environmentally friendly tomorrow. Yet, reaching the ambitious climate goals demands persistent backing, significant financial injections, and a surge in technological advancements. In a world grappling with the intensifying effects of climate change, India's resolute pledge to slash carbon emissions and shift towards renewable energy stands as both an imperative and an inspiration for nations worldwide.