India’s industrial sector could cut 51% of its carbon emissions, reduce energy consumption by over 22% and prevent nearly 7.94 lakh premature deaths every year by shifting to electrified heat, according to a new study, positioning clean electricity as a cost-effective shield against volatile global fuel markets.
The findings come at a time when rising global oil and gas prices driven by geopolitical tensions are increasing cost pressures for Indian manufacturers dependent on imported fuels. The report underscores that this volatility is structural, not temporary, reinforcing the need to shift away from fossil fuel-based industrial heat.
The scale of the opportunity is significant. Industry, India’s largest energy consumer, accounts for nearly 47% of total final energy use, with over 40% met by coal and another 27% by petroleum and natural gas, leaving the sector highly exposed to global price shocks and import dependence.
According to the report, “Electrifying Industrial Heat in India: Technologies and Policies to Transform Indian Manufacturing,” released by the India Energy and Climate Center (IECC) at the University of California, Berkeley and Energy Innovation, electrification offers a lower-cost and more resilient pathway for industrial growth.
India’s industrial emissions are already among the highest globally, with the sector generating nearly 1.3 billion tonne of CO₂ in 2022, accounting for about half of the country’s total emissions, largely driven by fossil fuel-based heat.
The report estimates that electrification could cut 1,243 million metric tonne of CO₂ emissions, equivalent to over half of projected future emissions, while reducing total energy demand from 38.6 exajoules to 29.9 exajoules by 2070.
“Electrifying industrial heat can reduce energy use by 22 percent and cut over half of the sector’s CO₂ emissions when powered by clean electricity,” the report said.
The environmental gains extend beyond emissions. “Electrifying all eligible industrial processes in India can save nearly 794,000 lives annually,” it noted, with PM2.5 emissions falling by 38%, sulfur dioxide by 60% and nitrogen oxide by 53%.
Economic Resilience
The report also highlights a strong economic case. “Electrifying industrial heat is already cheaper than producing heat with biomass, natural gas, or petroleum across all temperatures needed by industry,” it said, adding that electrified heat is cheaper than coal in three out of five temperature ranges, covering 55% of industrial heat demand.
A key driver is India’s low-cost renewable energy. Solar tariffs have fallen below ₹2.5 per kWh, among the lowest globally, enabling industries to move towards domestically sourced, price-stable energy. Combined with efficient technologies like heat pumps — which can deliver 3–5 units of heat per unit of electricity — this significantly reduces both energy use and operating costs.
For higher temperature applications, the report highlights thermal batteries that can store solar electricity as heat and deliver it on demand, enabling industries to run round-the-clock operations using low-cost solar energy without expensive storage systems.
Navigating Structural Barriers
However, structural challenges remain. “Grid-powered electric technologies are more expensive, as retail electricity prices are 1.6–3.1 times higher than renewable energy prices,” the report said, pointing to distortions in electricity pricing.
The study identifies sectors such as iron and steel, cement, chemicals and refining as major contributors, accounting for over 60% of industrial energy use, while high-temperature processes alone make up nearly 40% of demand.
At the same time, it notes that a significant share of industrial demand — particularly in food processing, textiles, pharmaceuticals and paper — can be electrified immediately using existing technologies.
India’s dependence on imported fuels further amplifies the urgency. The country imports 89% of its crude oil, nearly half of its natural gas and over a quarter of its coal, exposing industry to global supply disruptions and price volatility.
With industrial energy demand projected to more than triple by 2070, the report underscores the need for policy intervention. “Effective policy can catalyze long-term, meaningful change,” it said, calling for reforms to improve access to low-cost renewable power, incentivise electrification technologies and rationalise tariffs.
As India moves towards its net-zero target by 2070, the report positions industrial electrification as a strategic economic and environmental shift — offering lower costs, reduced emissions and improved public health, while strengthening long-term energy security in an increasingly volatile global energy landscape.