Recognizing the Tamil Nadu ‘ s ambitious environmental goals, the event brought together senior industry leaders, policymakers, environmental experts, and MSME representatives to discuss innovative strategies, share success stories, and identify collaborative opportunities for sustainable industrial growth and achieving a carbon-neutral Tamil Nadu.
“Addressing climate change also presents a significant opportunity.”
Ravichandran Purushothaman
President, India Region, Danfoss Industries
COP26 held in Glasgow has set the target that India will be carbon neutral by 2070. This target is quite steep, and it has very significant implications for the country, its people, and its industry. Let me try to unravel this in a few parts. Firstly, achieving carbon neutrality means completely switching off energy that comes from fossil fuels. India’s peak energy demand is 225 gigawatts.
Remember, two-thirds of India is yet to be developed. Imagine the power generation infrastructure needed to build the rest of India. How are we going to make this transition from fossil fuels to non-fossil fuels? This is a significant challenge. We aim for the economy to grow at 7%. Every unit of new energy must come from non-fossil fuel sources such as solar, wind, and nuclear. Solar energy, however, is not available round the clock, posing a strategic challenge. On one hand, we must decouple growth from energy intensity. On the other hand, we must find alternative energy sources. The Government of India, along with the Ministry of Power, has developed a roadmap for achieving carbon neutrality.
We Are Yet to Peak
India’s emissions have not yet peaked. In developed economies like Europe or the USA, industrialization and emissions have already reached their peak. India’s emissions are projected to peak between 2045 and 2047. Achieving net zero requires transitioning away from coal, fossil fuels, and oil-based energy sources. Currently, 50% of India’s greenhouse gas emissions come from electricity generation, predominantly from coal. Coal accounts for 60 to 65% of India’s electricity generation. Additionally, 10% of emissions stem from diesel engines, with mobility contributing 20%, industries 16%, and agriculture making up the remainder.
To transition to green energy generation, shift to electric mobility, and decarbonize industries, significant capital is required. In 2024, global investments in energy amount to $3 trillion, which is roughly 2.8% to 3% of the world’s GDP of $100 trillion annually. Notably, for the first time, $2 trillion of this investment is directed towards non-fossil fuel sources, marking a substantial shift. However, $1 trillion continues to be allocated to building coal plants, underscoring the challenge of moving away from coal quickly. Solar energy, while promising, presents geopolitical challenges as materials are currently sourced predominantly from a single country, which controls the raw materials and resources essential for solar technology.
Apart from the economic challenges posed by greenhouse gas emissions, we also face geopolitical challenges in balancing trade. Fundamentally, there are four or five key areas that we must focus on as a country.
Technology Driven
Firstly, this is a technology-driven endeavour. In electric mobility, the primary challenge today lies in battery technology. Now we are in a situation where batteries are being fixed while the vehicle is in use, akin to fixing an engine while a plane is flying. Nevertheless, there are available technologies that can help reduce energy demand from fossil fuels. The Government of India introduced PAT (Perform, Achieve, and Trade) schemes, encouraging industries to invest in technologies aimed at reducing energy consumption. Examples include the widespread adoption of LED bulbs, improvements in cooling systems, and the energy efficiencies driven by digitalization. Technological advancement remains pivotal in addressing these challenges.
Collaboration with Universities
Secondly, as technology continues to evolve, it is crucial to engage extensively with universities. Building technical skills in India is essential because our current ecosystem lacks the necessary expertise to navigate future technologies effectively. Collaborating closely with universities is therefore pivotal in addressing strategic technology challenges and enhancing our skill base.
Funding
Thirdly, funding presents one of our most significant challenges. India remains a developing country, and conditions like CBAM (Carbon Border Adjustment Mechanism) imposed by developed nations necessitate support for us to transition towards carbon neutrality. Attracting investments and facilitating financial flows into this sector thus becomes the third critical challenge we face.
Favourable Public Policy
Fourthly, public policy plays a crucial role. In India, large companies have embraced initiatives like PAT, setting examples in energy efficiency. India leads globally in energy-efficient production of cement, steel, and glass. However, India’s economy is not solely defined by large corporations but also by its extensive small and medium-scale industries (MSMEs), contributing 60% to our GDP. Engaging MSMEs in this transformative journey poses significant challenges.
We need numerous startups and innovations in business models. For instance, “cooling as a service” allows users to avoid purchasing large cooling equipment by paying a service provider to maintain a building, say at 24 degrees Celsius. Digitalization enables such innovative business models. However, for these models to flourish, supportive public policies are crucial. Imposing high taxes like a 28% GST on new business models such as “cooling as a service” would stifle innovation and hinder progress toward sustainability.
Compliance Issues
Fifthly, compliance is a significant issue. While the government recommends setting ACs at 24 degrees Celsius, many people prefer lower temperatures. In Chennai, for instance, maintaining ACs at 25 degrees Celsius and using fans on low speed can enhance airflow and circulation. Although India has Energy Conservation Building Codes (ECBC) for buildings, compliance remains inconsistent. Cooling is increasingly necessary and no longer a luxury, impacting all segments of society, especially the most vulnerable. To effectively manage energy consumption related to cooling and other emissions, stringent public policy measures are essential. This approach is crucial for achieving comprehensive control over energy use and emissions across various sectors.
Climate change is a real and pressing issue. To effectively reduce greenhouse gases, decisive action is needed. This is a highly complex challenge for India, as we are an emerging economy and our emissions have yet to peak. Transitioning to non-fossil fuel solutions is essential. While we may not be considered a technology powerhouse and face challenges with limited capital and high costs, we urgently require technology, skills, innovation, and startup initiatives. However, addressing climate change also presents a significant opportunity for economic development. Achieving Net Zero and mitigating greenhouse gases are key economic challenges. Therefore, it is crucial to prioritize and intensify efforts in this area moving forward.
“Sector-specific initiatives should be prioritized.”
A R Unnikrishnan, MD, Saint Gobain
I work in the glass industry, where our sector contributes around 16% carbon emissions, though it may seem relatively small. However, with increasing manufacturing activities in India, particularly in Tamil Nadu, it’s crucial that we take immediate action to achieve carbon neutrality by 2070. Manufacturing is highly technical, necessitating a structured framework to progress effectively.
Typically, industry emissions are categorized into three scopes: Scope 1 covers emissions directly from the manufacturing process itself, Scope 2 includes emissions from the energy consumed, such as electricity, and Scope 3 encompasses emissions from the supply chain. Each of these categories requires targeted strategies for reduction and mitigation.
Scope 1
In Scope 1, there is significant opportunity for immediate action within our industry. Let me provide some examples of what we have implemented in our manufacturing practices. Typically, a plant has a lifespan of 20 to 30 years. Therefore, if our goal is to achieve carbon neutrality by 2040 or 2050, we must start planning and implementing changes now.
Secondly, we need to anticipate the types of energy sources and fuels that will be available in 10 or 15 years. Our plant designs, technologies, and processes must incorporate forward-thinking strategies to align with future energy requirements and advancements. We require a proof of concept, which involves conducting specific tests. For instance, we conducted a test in our plant in Germany to assess the feasibility of running our glass furnaces on hydrogen. We have confirmed its viability, and once hydrogen becomes commercially available, we will be prepared to adopt it.
Traditionally, many industries in Tamil Nadu have heavily relied on fossil fuels. To transition to cleaner alternatives, we need to proceed in phases. An immediate step is shifting towards natural gas, which represents a cleaner fuel option. As a state, we have been somewhat behind in this transition due to limited infrastructure for widespread natural gas availability.
However, the situation is evolving. New pipelines are being laid out, and I am optimistic that Tamil Nadu will soon join the national gas grid in the coming months. Currently, industrially advanced states like Gujarat, Maharashtra, and Karnataka are already integrated into this grid, whereas Tamil Nadu is not yet connected.
Hydrogen Options
Looking ahead to hydrogen, the current price stands at approximately $5 to $6 per kilogram. For widespread adoption by industries, this price needs to drop below $2 per kilogram, which may require significant technological advancements, which is not foreseen in the near future. Additionally, government policy interventions are crucial. Subsidies or incentives could incentivize industries to invest in transitioning to hydrogen within a defined timeframe. Tamil Nadu possesses the capability to establish these facilities effectively.
For instance, I recently learned about a new technology capable of producing hydrogen from industrial effluents, currently in its pilot phase. I am confident that within the next 5 to 10 years, this technology will be scaled up for widespread use. Many MSMEs in industrial clusters lack effluent treatment plants (ETPs). By implementing ETPs, these clusters could potentially generate hydrogen from industrial effluents.
Furthermore, within Scope 1 emissions, it’s crucial to explore alternative raw materials. In our glass manufacturing, we have already started substituting carbonaceous raw materials with non-carbonaceous alternatives. This transition requires extensive research in science, chemistry, and technology. Another viable approach is enhancing recycling efforts to promote a circular economy. Lastly, integrating biofuels into Scope 1 processes holds promise. India has abundant agricultural waste that can be converted into biofuels, with pilot-scale technologies already available for deployment. These initiatives collectively contribute towards reducing carbon emissions and advancing sustainable manufacturing practices.
Scope 2
Scope 2 mainly encompasses the electricity we procure from TNEB (Tamil Nadu Electricity Board). Tamil Nadu has made significant strides in its energy mix by incorporating a higher proportion of renewable sources and nuclear energy. Renewable now stand at approximately 43% in Tamil Nadu’s energy mix. This percentage is notably higher compared to other states in India. Despite these advancements, land availability poses a constraint, limiting the expansion of solar farms within the state. Given the preciousness of land, large-scale solar farm installations face challenges.
However, there are two promising opportunities to explore. Firstly, offshore wind energy presents a viable option for both Tamil Nadu and Gujarat. Secondly, there exists a policy framework for interstate electricity transfer. Many state governments are not acting this proposal. It offers an avenue for Tamil Nadu to take a leading role. Collaborating with states like Maharashtra and Rajasthan, which have extensive barren lands, could facilitate the establishment of large solar farms. This approach would enable electricity generation in these states to be transmitted and utilized in Tamil Nadu, using the transfer scheme.
Scope 3
In Scope 3, we must collaborate closely with our supply chain partners. Firstly, leading manufacturing companies must commit to decarbonizing their supply chains by working with key vendors to reduce the embedded carbon content in raw materials delivered to their factories.
Secondly, addressing emissions from transportation is crucial. Unlike Delhi and many other regions that transitioned to CNG years ago, Tamil Nadu currently lacks a comprehensive CNG network. Establishing a robust network of CNG and LNG across the state is essential. This initiative would facilitate the transition of both goods and eventually people to cleaner fuels, starting with CNG and eventually progressing to electric vehicles. While electric mobility presents its own set of challenges, developing a CNG infrastructure is a critical initial step towards reducing emissions in transport.
Additionally, it’s crucial to address high-carbon sectors such as cement and steel. Sector-specific initiatives should be prioritized to effectively reduce their carbon emissions. Furthermore, fostering more startups focused on sustainability and offering innovative sustainable solutions is essential. By integrating these efforts, Tamil Nadu can lead the way in achieving carbon neutrality. These collective actions across industries and startups will play a pivotal role in advancing sustainable practices and environmental stewardship in the region.
MSMEs Have a Big Role to Play
M Ponnuswami
CMD, Pon Pure Chemicals
Manufacturing constitutes 30% of Tamil Nadu’s GDP, whereas it is just 18% of India’s GDP. MSMEs contribute to 45% of our exports and 29% of our manufacturing. MSMEs have the capability to manufacture good products at very competitive prices, and the MSME ecosystem in Tamil Nadu is very strong.
MSMEs working towards carbon neutrality will be advantageous and more profitable for them. Globally, customers also insist on carbon neutrality. I came across a company that makes garments from recycled PET bottles; they have a turnover of 250 crore. Our Prime Minister wears coat made from their garment and thus, they have become very famous. I see a lot of opportunity for MSMEs in recycling. In Tirupur, for dyeing fabric, they were previously using 100% water without recycling. Now, thanks to court intervention, they recycle 95% of the water they consume.
I come from a village, and nearby there is a paper mill. As a student, I used to see a mountain of sludge dumped there, which would be cleared by tractors. Nowadays, it is not there. When I asked about it, they said they are sending the sludge to cement factories, where it is used instead of mining lime. We can see many such ideas successfully implemented.
Lighter Blades & Lesser Energy
Recently, I visited an energy-efficient light and fan manufacturer that has a turnover of 500 crore. Their market share in Tamil Nadu is 50%. Previously, they used steel blades for fans, but now they use lightweight aluminium blades sourced from Indalco and paint them. They claim that this reduces energy consumption by 38%. MSMEs can consider adopting similar innovations or become suppliers to such companies engaged in energy-efficient manufacturing.
I visited an MSME in Coimbatore that has completely digitized their plant, investing two crores in digitization. They no longer print drawings; instead, they are sent directly to the machines for manufacturing, after which the products undergo painting or electroplating. They are a debt-free company. Digitizing manufacturing will have a significant impact on making MSMEs more profitable and sustainable. MSMEs must embrace digitization.
I also visited an MSME that manufactures steel tubes used in refineries and pharmaceutical industries. They claim their pipes can withstand corrosion for 40 years, compared to conventional pipes that last 20 years. I suggest that larger industries and associations must educate MSMEs on sustainable materials, technologies, and practices available for them to adopt. The government is keen on incentivizing MSMEs that embrace net zero emissions.
Farm Mechanisation
From our factory, we supplied chemicals from Chennai to a major corporation in Guwahati. They aimed to reduce fuel costs and road transport, so they requested shipment to Calcutta port. Now, customers insist on reducing our carbon emissions due to their commitments and reporting requirements.
One company in India imports used cooking oil, produces biodiesel, and exports 100% of the product. There are abundant opportunities for MSMEs in various sectors. We also need to educate the agriculture sector on efficient power use and water conservation. MSMEs can become agricultural service providers, offering complete mechanization services. In my village, I observe sugarcane farmers burning crops before harvesting, causing loss of sugar content and pollution. The government provides subsidies for biogas and it plans to blend it with natural gas. Mechanizing farming can minimize pollution and waste generation.
Panel Discussion
Anju Mary: Tamil Nadu has set an ambitious target to be carbon neutral by 2050. How does Tamil Nadu compare to the carbon footprint targets set? What are the next steps needed to be taken to align with these targets?
Ravichandran: Tamil Nadu has taken a number of initiatives. The Center for Environment, Energy and Water (CEEW) based in New Delhi has prepared a report and roadmap. They have identified the need to add 175 gigawatts of solar energy by 2040 to become carbon neutral by 2050. They also plan to add 17 gigawatts of offshore wind. In addition, they have plans to increase the forest cover across the length and breadth of the state, which will act as carbon sinks. Tamil Nadu’s emission may peak by 2047 and it is expected to achieve net zero by 2050. Funding all this will be the biggest challenge.
Anju Mary: What initiatives have been taken by your organization to reach your carbon neutrality / your sustainability target?
Ponnuswami: From the beginning itself, we have been using recycled packing material. We pack every month about 10,000 tons of chemicals. For 70% of this need, we reuse the packing material. We also teach our users to return the barrels without damage. Instead of using road transport, for bulk transport, we use shipping through Ennore port. We have also installed wind mills and add a capacity of 3 MW every year.
Unnikrishnan: Saint Gobain has committed to be carbon neutral by 2050. We have set objectives for 2030, taking 2017 as the base, which include reducing our absolute energy consumption; water usage; and non-recovered waste by a certain percentage. In one of our new furnaces which was started last week, 25% of the energy comes from renewable sources of electricity. Earlier, we were using 100% natural gas. It’s a new design and new technology that is used.
Secondly, we have brought in a lot of alternate raw materials, bringing down our Scope-1 emissions. Thirdly, we use the recycled content. Glass is infinitely recyclable. Though in India, we don’t get much of glass waste as ours is a new construction market, we get waste from our value chain. We have also taken many initiatives in Industry 4.0 and installed smart meters and sensors. 40% of the electricity used in our sites is coming from renewable sources of power.
We have converted several trucks which are used for transport into CNG powered trucks. Lastly, we now use recyclable steel packings, replacing wooden packings, to transport our glass, which all of us know is very fragile. This is a big transformation, done not just by us but also our customers.
