Energy and efficiency improvement opportunities in the Textile Industry

October 24, 2021 4:44 PM

Redesigning the supply chain induced with green technology will help adapt to climate change mitigation measures

The Indian government has taken a firm step towards dominance in the global textile market by recently introducing the Production Linked Incentive Scheme.

By Amit Kumar Singh Parihar and Divya Banerjee,

The recent IPCC report has established the inadequacy of efforts being made to keep the global rise in temperature to a permissible limit of 1.5o C. As we move closer to COP26 to discuss further the pathway to accelerate climate action, it is important to develop a common consensus and streamline our efforts towards the broader decarbonization objective. One can’t deny the need to join the race to zero by all sectors of society, with pledges from companies, cities, states, and regions. Decarbonizing supply chains is a major opportunity for nations to put commitments into practice, as it offers a game-changing opportunity (Net-Zero Challenge: The supply chain opportunity, 2021).

According to Cushman & Wakefield’s (Global Manufacturing Risk Index – 2021), India has emerged as the second most preferred manufacturing destination over other countries, including the U.S and Asia-Pacific region. Redesigning the supply chain induced with green technology will help adapt to climate change mitigation measures. The industrial sector in India, being the most energy-intensive sector with its share of 42.7% (MoSPI, 2019) towards total energy consumption, holds the second highest potential for decarbonization. Furthermore, within industries, the textile industry, which is a significant contributor to economic growth and jobs, holds significant potential for decarbonization through the implementation of energy efficiency and clean technology measures. India is the world’s second-largest producer of textiles and garments, also the fifth-largest exporter of textiles and is expected to grow at a CAGR of 12% in future (IBEF, 2021). After agriculture, the sector adds a considerable 4% to the country’s GDP and is the second-largest employment generator with around 45 million direct workers (Trends in Textile Engineering & Fashion Technology, 2018). The textiles industry in India covers the entire manufacturing value chain from fibre to apparels, constituted by players of all sizes, from large corporates to MSMEs and spread across clusters throughout the country. The Indian government has taken a firm step towards dominance in the global textile market by recently introducing the Production Linked Incentive Scheme. This growth can be modernized and accelerated while improving livelihoods for millions, by usage of decentralized renewable energy.

However, the textile industry, including the production of all clothes which people wear, contributes to around 10% of global greenhouse gas emissions due to its long supply chains and energy-intensive production (World Bank, 2019). Clean technology interventions in the sector will help in driving climate change mitigation and help industries improve their overall profitability, thereby ensuring long-term sustainability. Decarbonised garment manufacturing could deliver 90 million tonnes of GHG emissions savings (Comparative study of energy assessment from apparel industries, 2006).

While the large textile industries have raced ahead by implementing clean technology interventions due to their access to PAT scheme and net-zero commitments, the MSMEs (micro, small and medium enterprises) still face technical, financial, institutional, and social barriers. To address the challenges, a range of initiatives involving capacity-building, awareness programs, and financial subsidies organised and supported by bilateral and multilateral institutions. However, some of the challenges continue to persist and hinder the large-scale energy transition in this sector due to barriers to accessing finance, inadequate policy incentives as well as lack of technical awareness. Improvements in energy efficiency and a transition from fossil fuels to renewable-energy sources could deliver about 1 billion metric tons of emission abatement in 2030 across the textile value chain. (Fashion on Climate, 2020). Thus, there is an imminent need for holistic scalable solutions and ecosystem-based comprehensive approaches that leverage multi-stakeholder partnerships in order to combat the multitude of obstacles plaguing the energy transformation of the sector.

Paving the Way Forward: Potential Opportunities & Approaches

Potential technological options to decarbonize the textile sector are energy-efficient boilers, waste heat recovery systems, air to fuel ratio controllers, energy-efficient motors, and compressors. However, the large-scale adoption of these possible solutions requires the following interventions:

  • Adoption of a holistic approach for achieving large-scale transition, which ensures inclusion of aspects related to sustainability and scalability of interventions.
  • Enabling and strengthening local ecosystems by ensuring skilled technology suppliers, technical assistance, and training to build a skilled workforce focused on gender empowerment.
  • Policy interventions to create a conducive environment for achieving energy efficiency and clean technology adoption at scale.
  • Collaboration & Green Partnerships: Coherent aligned efforts from all stakeholders is bringing in accelerated transformation. Brands are actively engaging with manufacturers in their value chain to roll out cleantech interventions at scale. Likewise, SMEs across industry clusters are accessing technical assistance and demonstration support for torch-lights’ wider sectoral adoption. Such collaboration measures can be further enhanced with green partnerships that bring in a cross-section of players from technology, financing and energy together.
  • Innovations in Business Models – demand aggregation, market transformation, and ESCO-financing based approaches addressing barriers related to higher cost and upfront investment.
  • Program interventions involving the suggested approaches could help the country achieve its Nationally determined contributions and Net-zero ambitions while making the industries more sustainable and resilient. Transitioning to a clean energy-based system can bear risks and weather tomorrow’s crises, which is one of the main challenges to be addressed by the industry and government today.

(The authors are from the Institute for Sustainable Communities. Views are personal)

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Thieves using Apple AirTags to steal cars, police issues advisory
2Food processing ministry okays 60 applications under PLI scheme
3MoUs worth Rs 14,165 crore signed before Vibrant Gujarat Summit