Brief Context
Context NITI Aayog has released three reports outlining decarbonisation roadmaps for the cement, aluminum and MSME sectors. Decarbonisation of Cement Sector Growth: Cement production is projected to increase from 391 million tonnes in 2023 to about 2,100 million tonnes by 2070, reflecting India’s infrastructure and urbanisation needs. India is the world’s second‑largest cement producer after China, contributing about 13% of global annual cement output.
Source Content
Syllabus: GS3/ Economy
Context
- NITI Aayog has released three reports outlining decarbonisation roadmaps for the cement, aluminum and MSME sectors.
Decarbonisation of Cement Sector
- Growth: Cement production is projected to increase from 391 million tonnes in 2023 to about 2,100 million tonnes by 2070, reflecting India’s infrastructure and urbanisation needs.
- India is the world’s second‑largest cement producer after China, contributing about 13% of global annual cement output.
- The sector contributes about 7% of India’s total greenhouse gas emissions.
- Decarbonisation Targets: The roadmap envisages reducing carbon intensity from 0.63 tCO₂e per tonne of cement at present to 0.09–0.13 tCO₂e per tonne by 2070.
- Key Decarbonisation Strategies:
- Prioritising refuse-derived fuels (RDF) to reduce coal dependence.
- Clinker substitution through greater use of supplementary cementitious materials.
- Scaling up Carbon Capture, Utilisation and Storage (CCUS) for residual process emissions.
- Effective implementation of the Carbon Credit Trading Scheme (CCTS) to incentivise low-carbon production.
Decarbonisation of Aluminium Sector
- Production Outlook: Aluminium production is projected to rise sharply from 4 million tonnes in 2023 to 37 million tonnes by 2070.
- Phased Decarbonisation Pathway:
- Short term: Transition to Renewable Energy–Round the Clock (RE-RTC) power and strengthening grid connectivity and reliability.
- Medium term: Adoption of nuclear power to provide stable, low-carbon baseload electricity.
- Long term: Integration of CCUS to address remaining emissions.
Decarbonisation of MSME Sector
- Economic Significance: MSMEs contribute nearly 30% of India’s GDP, employment to over 250 million people, and around 46% of India’s exports.
- The Roadmap for Green Transition of MSMEs is built around three key levers:
- Deployment of energy-efficient equipment to reduce energy intensity.
- Adoption of alternative fuels to cut fossil fuel dependence.
- Integration of green electricity through renewable power procurement and self-generation.
Initiatives taken by India
- Udyam Registration & MSME Sustainable (ZED) Certification: Promote resource efficiency, energy efficiency and cleaner production practices among MSMEs.
- Perform, Achieve and Trade (PAT) Scheme: A flagship initiative under the National Mission for Enhanced Energy Efficiency, PAT targets energy-intensive industries like cement by setting specific energy consumption reduction targets.
- National Smart Grid Mission & Green Open Access Rules (2022): Facilitate renewable energy procurement, especially for energy-intensive industries and MSMEs.
- India’s Carbon Credit Trading Scheme (CCTS) creates a market for reducing emissions in heavy industries like cement and aluminum by setting mandatory intensity targets, rewarding overachievers with credits (CCCs) for trading, and encouraging innovation in low-carbon technology.
Challenges in Green Transition
- Hard-to-abate emissions: Cement process emissions from limestone calcination and electricity-intensive aluminium smelting limit mitigation through renewables alone.
- High capital costs: Technologies such as CCUS, RE-RTC power and nuclear integration require large upfront investments with long payback periods.
- Green finance constraints: MSMEs face limited access to affordable credit, weak balance sheets and high borrowing costs.
- Clean power availability: Lack of reliable round-the-clock renewable energy and grid constraints hinder deep decarbonisation.
Way Ahead
- Scaling green finance: Expand blended finance, credit guarantees and concessional lending, especially for MSMEs.
- Technology development and localisation: Accelerate domestic manufacturing of clean industrial technologies.
- Strengthening carbon markets: Ensure transparent and credible implementation of the Carbon Credit Trading Scheme.
Source: PIB