By Deepak Gupta & Kolluru Krishan

Most of the discussion on decarbonisation has focused on switching from coal to renewable energy and the transition to electric vehicles. However, the totality encapsulated in the net zero emission (NZE) target is far more complex. Here, we look at the challenges facing deep decarbonisation of industry, transport and buildings. Although the energy sector accounts for about 75% of the total GHG emissions, the statistics don’t capture its co-dependency with the three sectors mentioned above. Scaling up of renewable energy will create additional demand for steel, cement, aluminum, copper, and plastics, all of which have high embodied carbon. Thus, the renewables rush will enhance GHG emissions till these sectors are adequately decarbonised.

Greening of businesses, mobility and buildings has achieved a lot of traction, but progress towards NZE is far away. There is clarity on Scope 1 and 2 emissions (from company directly owned and controlled resources, and from purchased energy). But the same rigour is lacking when it comes to Scope 3 (from supply chains), and Scope 4 (extending beyond a product’slifecycle or value chain but resulting from increased usage) emissions. In-depth, cross-sectoral planning is essential to progress to NZE.

Indian industry is at the forefront of energy efficiency, driven by the PAT scheme, under the Energy Conservation Act 2001, the BEE mandates, and SEBI-mandated Business Responsibility & Sustainable Reporting, etc. Yet, by 2040, as per IEA’s India Energy Outlook 2021, its energy consumption will account for a 41%-share in total energy consumption, apart from growth in non-energy use of fossil fuels as industrial feedstock. This necessitates continued improvements in materials and energy efficiencies, along with adoption of low-carbon manufacturing processes. Fuel switching, to bioenergy and green hydrogen, can substitute fossil fuels as feedstock in process heat/ transport and other auxiliary applications. Adopting a circular economy in materials as well as products will stimulate green businesses and livelihoods, apart from reducing demand for minerals. MSMEs must be the priority as their transition to the green economy will preserve existing jobs even as it creates new ones.

The transport sector’s decarbonisation has been pursued through policies and mandates such as Bharat VI norms for petroleum products, as well as mandates and fiscal incentives for biofuels. However, deep decarbonisation requires an in-depth and technology-agnostic analysis of embodied carbon and import dependency for critical raw materials. The roadmap for decarbonising transport fuels is defined in the National Policy on Biofuels 2018 and adjunct schemes—such as SATAT, JI-VAN—but it currently focuses on first-generation solutions, undoubtedly with the goal of generating short-term impact. Advanced biofuels offer greater potential and should also be the default choice in rural areas, because of bio-resources availability and socio-economic, environmental and ecological benefits. Shift to biofuels will not disrupt the existing transport ecosystem,in the context of vehicles or infrastructure—enabling transition sans job-losses.

EVs have achieved traction, supported by appropriate financing instruments. However, the present policy focus on passenger cars and expensive public charging infrastructure has to shift. Fiscal measures are essential to greatly and quickly enhance usage of public transport with last-mile connectivity and limit use of private vehicles. There should be rapid electrification of two- and three-wheelers for personal transport, with cars used for shared mobility or leisure travel, whether petrol or electric. Buses need a quantum jump. The jury is still out on long-distance trucking, but pilots should be launched. Innovative schemes to establish EV supply equipment, catering for both capex and opex, are needed

The contribution of buildings to GHG emissions will grow, linked to urbanisation—IEA forecasts urban population to reach 740 million by 2040, necessitating 50 billion sqm of built residential space, and a consequential impact on built commercial space. NZE requires a detailed study, encompassing existing and future inventory of buildings, analysing GHG mitigation in the entire value-chain and over the lifetime of a building, including end of life treatment. Green construction materials (alternatives to cement, sand, aggregate, steel) must be explored, and resource efficiency in design, along with enhanced penetration of renewables, sustainable water management and circular economy solutions for the entire range of buildings.

Green hydrogen has the potential for a cross-sectoral impact. Its production is viable at points of bulk consumption (refineries & petrochemicals, fertiliser, and steel) and for blending in gas pipelines. However, we must address challenges in transport, storage and refueling of a very low density gas, by supporting decentralised production and consumption in rural areas, with a technology-agnostic approach. Providing a 10% mandate for fossil fuels displacement by 2030 (if not immediately) can give a big impetus and stimulate rapidly-increasing manufacturing capacities and the resulting lower costs.

With all this, and a decentralised architecture for the energy sector as recommended in our previous articles, the transition to a green economy will be feasible. Accelerating it will bolster equity and inclusion—subject to “just transition” factoring in challenges faced by those whose livelihoods are tied to high-carbon industries.

Respectively, former secretary, MNRE, and chairman, CVC India Infrastructure