NITI Aayog, the Indian government's premier policy think tank, has released comprehensive roadmaps for the decarbonisation of key industrial sectors, including aluminium, cement, and Micro, Small & Medium Enterprises (MSMEs). This initiative is crucial as India aims to achieve Net Zero emissions by 2070 and expands its industrial and infrastructure base to meet the Viksit Bharat Goal of a $30 trillion economy.
These roadmaps address the unique challenges and opportunities within each sector. For the MSME sector, NITI Aayog proposes establishing a National Project Management Agency (NPMA) and allocating 8-9% of the credit-guarantee fund value to facilitate their green transition. The MSME sector needs schemes to achieve efficiencies through convergence.
The cement and aluminium sectors, which are particularly carbon-intensive, require specific strategies focused on emissions reduction. NITI Aayog suggests increased use of supplementary cementitious materials and scaling up Carbon Capture, Utilisation and Storage (CCUS) technologies to capture CO2 emissions in these industries. The report highlights that electricity accounts for over 75% of the emissions in aluminium manufacturing. To address this, it suggests supplying power from renewable energy sources in the short term, with a dedicated renewable energy grid for the aluminium sector considered as a policy option.
These sectoral plans are part of a broader effort to create a green future for India, encompassing a dozen sectors, including energy, power, highways, steel and iron. NITI Aayog's focus on climate change and green transition is relatively recent, with the establishment of a dedicated division for these issues. This reflects the growing importance of sustainable development in India's policy framework.
Achieving Net Zero by 2070 will require substantial investment, with estimates suggesting a need of $21 trillion, of which $14 trillion is already available. Mobilizing the remaining $7 trillion will be a key challenge, requiring innovative financing mechanisms and addressing the weak business case for nascent technologies like CCUS, green hydrogen, and green ammonia. NITI Aayog has reiterated its suggestion to establish a National Green Financing Institute to help bridge this financing gap. The institute would focus on blended finance, offer guarantees to reduce capital costs, and develop standardized agreements.
These roadmaps come at a time when India is nearing its 2030 deadline to achieve 500GW of non-fossil electricity capacity and is committed to reducing the emission intensity of its GDP by 45% from 2005 levels. The proposals also consider the risk of future export restrictions due to high emission intensity. By proactively addressing decarbonisation, India aims to maintain its competitiveness in the global market while fulfilling its climate commitments.
