Challenge of the New Balance

CSE's landmark study on how India will reduce emissions to combat climate change.

In 2009, CSE began analysing the six most emissions-intensive industrial sectors to find out how Indian industry performs – and will perform in future - in terms of reduction in emissions. These sectors – power, steel, cement, aluminium, paper and pulp and fertilizers - together accounted for over 60 per cent of India’s CO2 emissions in 2008-09.

 The study examines the sectors under two scenarios - Business as Usual (BAU), a scenario in which the industry will improve efficiency on its own due to the rising cost of energy, and Low Carbon (LC), in which the government is forced to take action to combat climate change.


How the sectors fare

The study unearths a mixed performance from the six sectors, with some performing at the global best level, some displaying immense potential, and yet others constrained by their unique characteristics.

 For instance, while the power sector, the single largest contributor to CO2 emissions, has also the biggest potential for emissions reduction, the cement, aluminium and fertilizer sectors already feature among the global best. In the BAU scenario in the power sector, emissions intensity reduction is 18 per cent by 2030, largely because of improvements in coal-based power plants. In an LC scenario, emissions intensity can reduce by as much as 35 per cent by 2030 -- but this option is expensive as it means huge investments in new technologies and low-carbon fuels.

 The CSE study says that India’s thermal power plants are more efficient than the global average. The country’s biggest power utility, NTPC, operates at 33 per cent efficiency, one of the highest in the world given the sub-critical technology and poor quality coal the company uses. The study also projects that just making more energy by saving and through increased efficiency the country could add as much as 20 per cent to India’s gross power generation by 2020.

 The cement industry’s performance is credited to the use of modern technologies and blending materials (flyash and slag) for cement production. The sector, says the CSE study, can further lower its emissions intensity by increasing the proportion of blended cement in its total production – in a BAU scenario, the reduction can be by 25 per cent by 2030 while in an LC scenario, it could come down by 35 per cent.

 The fertiliser sector, on its part, does not have technology options for reducing emissions and will have to rely on changing the feedstock – from naptha and fuel oil to natural gas. The industry can grow and still reduce its total CO2 emissions by 2 million tonne per annum in 2020 with respect to 2008-09 levels, simply by moving to natural gas. But the sector faces a critical shortage of natural gas.

 In aluminium, 80 per cent of the sector is already using global best smelting technology. Technology options to reduce emissions are limited; companies will therefore have to improve the efficiency of on-site power generation system and move to renewables to go low carbon. Therefore, says the CSE study, the growth of this sector here means a four-fold increase in total emissions in the BAU scenario. In an LC scenario, emissions intensity reduces, but only if 30 per cent energy is sourced from renewables.

 The paper and pulp industry performs poorly in terms of energy use, and its CO2 emissions are high. The sector has begun changing its raw material from diverse wood and non-wood sources to wastepaper and market pulp. As a result, in a BAU scenario, emissions intensity reduces by 30 per cent by 2030. In an LC scenario, emissions intensity can reduce by as much as 40 per cent by 2030, but this will require retiring all old plants and investing in new energy-saving technologies.