EY-Parthenon - Business Outrank

The growth to a $7 trillion economy by 2030 requires India to adopt sustainable and green manufacturing practices. The EY-Parthenon report ‘How Green Manufacturing is Reshaping India’s Industrial Landscape’ underlines the necessity of decarbonisation in oil and gas, steel and cement sectors. Laxmi Naden, Senior Associate Editor, Forbes India, said India’s carbon dioxide emissions from these sectors may well reach 2 gigatons by 15 years from now. Today, the steel sector is the largest emitter of green house gases in India, cement is the second largest emitter, and power utilities are third at 5.2%. If the current trends in industrial capacity utilization are to be believed, these numbers will be almost doubled anytime soon. Rajiv Memani, Chairman and CEO of EY India, emphasized that both growth and sustainability should not be sacrificed for the sake of the other but rather both should be balanced. "Growth has not been at the cost of sustainability in the journey to Viksit Bharat," he said. He also discussed the need for the use of renewable energy and cleaner technologies in the manufacturing sector. Green Hydrogen and the Path to Decarbonisation According to the report, green hydrogen may be able to play a crucial role in cutting emissions. At present, India’s refineries use 2.7 million metric tonnes (MMT) of hydrogen which is produced by Steam Methane Reforming (SMR) that emits 24 MTO of CO2 every year. Using green hydrogen instead of traditional hydrogen for 15% of refining uses could lead to a reduction of 6.3 MMT of CO2 emissions by 2035. But the current major issue with green hydrogen is that it is quite expensive. The current cost of green hydrogen is $6–7 per kg while grey hydrogen is available at $1.5 per kg, four times cheaper. The blending of green hydrogen with city gas distribution (CGD) network can also help in reducing emissions but the issue of affordability will have to be addressed for the large scale adoption of the technology. Carbon capture and government policy. Alongside green hydrogen, the report also identifies carbon capture, utilization and storage (CCUS) as another means of greatly lowering emissions. Even today, the concept is not very advanced in India, but leading oil and gas companies have already started investing in CCUS technology. The report has also called upon the government to be more proactive in setting carbon reduction goals, providing tax benefits for green projects, and putting in place a carbon pricing strategy. These measures will help industries to steer clear of high-carbon spending and adopt environmentally friendly strategies. In addition, the author called for the enhancement of R&D, the promotion of cooperation between the state and the business and civil society, and the creation of skill development programs for green jobs. Energy Demand and the Need for Transition Energy demand will increase as India’s economy develops. According to the 20th Electric Power Survey, India’s peak electricity demand is projected to rise to 366.4 GW in the years 2031-32. At present, the total is 289.8 GW and this number will only keep on increasing to 341 GW by 2030 and 354 GW by 2040 due to factors like industrialization, population, and demand for AI computed power. Kapil Bansal, Partner, Energy Transition and Decarbonisation at EY-Parthenon India highlighted that the other key focus areas should be on promoting green manufacturing and cutting down CO₂ emissions. "Achieving sustainable industrialisation and long-term energy security necessitates strengthening of CO₂ reduction targets, scaling up green hydrogen, and robust public-private collaboration,” he said. Transition to green manufacturing in India will not only help the environment, it will also help India become a market leader and a major competitor in a global market. Those businesses that act now to integrate these technologies will be the leaders in a changing worldwide market that is increasingly focused on sustainability. This is why as India builds towards its $7 trillion economy, the only sustainable strategies that must be adopted are those that ensure the country’s future and the environment.

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