Press Release: How emissions-intensive are our industries? | Centre for Science and Environment


Press Release: How emissions-intensive are our industries?

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Can India meet the emissions target set by government for 2020?

What are the implications for a climate constrained future?

CSE releases landmark study on how India will reduce emissions to combat climate change

•    Study on 6 sectors which together contribute over 60 per cent of carbon dioxide emissions
•    Analysis of how these industrial sectors – power to aluminium – perform in terms of current emissions, their ranking in terms of global best industries and what is the technology pathway in future for these sectors
•    Study finds Indian industry is capable of meeting emissions intensity reduction targets set by government till 2020, but after this technology options are limited and cutting emissions will mean high costs and difficult choices, which will impact growth
•    Study has major implications for future climate negotiations. Shows that if India gives up its demand for an equitous agreement, it will not be able to afford the cost of transition to low carbon growth 

New Delhi, April 27, 2010: In January this year, India had declared that it would voluntarily reduce emissions intensity of the GDP by 20-25 per cent by 2020 in comparison to the 2005 level. Will it be able to do so and what is the technology-emission reduction road map for India? A report by Centre for Science and Environment (CSE), which was released here today, finds while industry can meet the 2020 target under even business as usual scenario, its options beyond this are few, difficult and very expensive.

The study, using extensive data on each sector collected from the industries, concludes that most Indian industry is already efficient in terms of its use of energy and emissions. But in all these sectors, technology options for emission reduction stagnate after 2020. There is no way to reduce emissions without impacting growth once we cross the current emissions-efficiency technology threshold, says the study.

Says Sunita Narain, director, CSE: “This study must be understood in terms of its implications for global climate negotiations. India must continue to demand an equitous agreement, as the cost of transition to low carbon economies is high. The industrialized world must recognize its historical responsibility so that it can pay us to mitigate. Furthermore, it must recognize that in the current economic growth model, the options for drastic reductions are few. This is why the industrialized world has not been able to cut emissions meaningfully. India needs the ecological space to grow. Simultaneously, the world also needs to reinvent its growth model to be low-carbon. But all this must be understood in terms of cost to the economy.”

The report, titled Challenge of the New Balance, is the first study in India to look at options to reduce emissions, their feasibility and the costs involved, and understand the low-carbon roadmap and technology pathways for the future.

The CSE study
In 2009, CSE began analysing the six most emissions-intensive industrial sectors to find out how Indian industry performs – and will perform in future -- in terms of reduction in emissions. These sectors – power, steel, cement, aluminium, paper and pulp and fertilizers -- together accounted for over 60 per cent of India’s CO2 emissions in 2008-09.

Elaborating on the study and its objectives, Chandra Bhushan, associate director, CSE and the study’s author says: “There is a perception that India’s rising GHG emissions are due to an inefficient industry. The study tells us that it is not true. We have used data sourced from industry to see how the six sectors perform, what are the technology options to reduce energy and emissions, and the growth trajectories – we have found that many sectors are actually performing at global best levels.”

To do all this, the study examines the sectors under two scenarios -- Business as Usual (BAU), a scenario in which the industry will improve efficiency on its own due to the rising cost of energy, and Low Carbon (LC), in which the government is forced to take action to combat climate change.

How the sectors fare
The study unearths a mixed performance from the six sectors, with some performing at the global best level, some displaying immense potential, and yet others constrained by their unique characteristics.

For instance, while the power sector, the single largest contributor to CO2 emissions, has also the biggest potential for emissions reduction, the cement, aluminium and fertilizer sectors already feature among the global best. In the BAU scenario in the power sector, emissions intensity reduction is 18 per cent by 2030, largely because of improvements in coal-based power plants. In an LC scenario, emissions intensity can reduce by as much as 35 per cent by 2030 -- but this option is expensive as it means huge investments in new technologies and low-carbon fuels.

The CSE study says that India’s thermal power plants are more efficient than the global average. The country’s biggest power utility, NTPC, operates at 33 per cent efficiency, one of the highest in the world given the sub-critical technology and poor quality coal the company uses. The study also projects that just making more energy by saving and through increased efficiency the country could add as much as 20 per cent to India’s gross power generation by 2020.

The cement industry’s performance is credited to the use of modern technologies and blending materials (flyash and slag) for cement production. The sector, says the CSE study, can further lower its emissions intensity by increasing the proportion of blended cement in its total production – in a BAU scenario, the reduction can be by 25 per cent by 2030 while in an LC scenario, it could come down by 35 per cent.

The fertiliser sector, on its part, does not have technology options for reducing emissions and will have to rely on changing the feedstock – from naptha and fuel oil to natural gas. The industry can grow and still reduce its total CO2 emissions by 2 million tonne per annum in 2020 with respect to 2008-09 levels, simply by moving to natural gas. But the sector faces a critical shortage of natural gas.

In aluminium, 80 per cent of the sector is already using global best smelting technology. Technology options to reduce emissions are limited; companies will therefore have to improve the efficiency of on-site power generation system and move to renewables to go low carbon. Therefore, says the CSE study, the growth of this sector here means a four-fold increase in total emissions in the BAU scenario. In an LC scenario, emissions intensity reduces, but only if 30 per cent energy is sourced from renewables.

The paper and pulp industry performs poorly in terms of energy use, and its CO2 emissions are high. The sector has begun changing its raw material from diverse wood and non-wood sources to wastepaper and market pulp. As a result, in a BAU scenario, emissions intensity reduces by 30 per cent by 2030. In an LC scenario, emissions intensity can reduce by as much as 40 per cent by 2030, but this will require retiring all old plants and investing in new energy-saving technologies.

“Steel will be the problem sector for India,” says Chandra Bhushan. “This sector will not be able to reduce emissions intensity significantly because of the technology choices it is making today – moving from blast furnace process route to sponge iron. Close to 60 per cent of India’s steel will be produced using sponge iron in which emissions efficiency gains are few.”

The study concludes that in the BAU scenario, industry, at its own cost, will reduce emissions by 20 per cent by 2030. This will help the world avoid 700 million tonne of CO2 emissions annually in 2030. In addition, between the BAU and the LC pathways, an additional 10 per cent emissions can be avoided – this, however, will require considerable expense. 

Says Narain: “Under all circumstances today, the options for serious emissions reduction are limited in the industrial model we belong to or want to inherit. What our study shows is that the world – and India -- has to seriously rethink and rework its economic model for the future.”

•    If you have queries, please write to Chandra Bhushan at chandra@cseindia.org. You can also call or write to Souparno Banerjee on 9910864339 and souparno@cseindia.org
 

Announcements

  •  Environmental Impact Assessment (EIA) is an important tool to inform decision- makers, regulators and stakeholders, about the possible environmental, social and economic costs of the proposed project.

  • Centre for Science and Environment (CSE), New Delhi is going to organise a hands-on three-day training programme aimed at giving practical exposure to participants on EIA with specific reference to wind power projects.

    The objective of this programme is to enable stakeholders to understand the likely impacts of the project and allows them to make sound decisions during various stages of project development.

  • Centre for Science and Environment recognises Social Impact Assessment (SIA) as an important tool to inform decision makers, regulators and stakeholders about the possible social and economic impacts of a development project. To be effective, SIA requires the active involvement of all concerned stakeholders.

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