Commodities Focus
Decarbonizing India's Industrial, Power Sectors: Challenges and Roadmaps
Why It Matters
India’s industrial growth will triple its energy use while it strives for net‑zero by 2070, making the transition pathways discussed critical for global climate goals. Understanding realistic, sector‑specific strategies and the financing gaps helps investors, policymakers, and companies navigate the massive emissions reduction needed in the world’s third‑largest economy.
Key Takeaways
- •India's electricity demand to triple by 2030, requiring green addition
- •Net‑zero by 2070, 45% cut by 2030, sector roadmaps essential
- •Steel decarbonisation follows three‑phase: CC, electric arc, hydrogen DRI
- •Power sector will double demand, shifting from renewables to nuclear/CCUS
- •CCUS needs heavy subsidies, base‑load operation, and CO₂ circularity
Pulse Analysis
India’s industrial and power sectors face a paradox of rapid growth and urgent climate goals. Energy consumption is projected to rise from roughly 8,000 TWh today to about 25,000 TWh within the next decade, while the government has pledged a 45 % emissions cut by 2030 and net‑zero by 2070. This scale‑up demands a green addition model rather than a simple transition, forcing policymakers, NITI Aayog and ministries to embed stability, financing mechanisms, and clear sector‑specific milestones into the national roadmap.
Heavy‑industry leaders are adopting a portfolio approach that blends energy efficiency, alternative fuels, circularity and emerging technologies. In steel, a three‑phase pathway is emerging: initial carbon‑capture retrofits on blast furnaces, followed by large‑scale electric‑arc furnace recycling, and finally hydrogen‑based direct‑reduced iron (DRI) to replace carbon‑intensive feedstocks. Similar phased strategies are being mapped for cement, aluminum and chemicals, each calibrated to a 10‑15‑year horizon and aligned with supply‑chain realities, capital‑expenditure constraints, and evolving global markets. The emphasis on modular, technology‑agnostic roadmaps reflects the recognition that no single solution can decarbonise hard‑to‑abate sectors.
The power sector, responsible for the bulk of India’s emissions, is set to double its electricity demand, driven by EVs, data centers and industrial expansion. Early years will rely on renewable generation paired with storage, but medium‑term planning must incorporate baseload options such as nuclear and carbon‑capture‑utilisation‑storage (CCUS). Government support—₹200 billion for CCUS pilots, subsidies, and priority financing—will be critical, as CCUS can double coal‑plant capex and raise operating costs by 30 %. Aligning these investments with carbon‑border adjustments and circular CO₂ uses, like methanol or sustainable aviation fuel, will determine the financial viability of India’s broader energy transition.
Episode Description
India's greenhouse gas emissions in the hard-to-abate and power sectors are expected to rise in the decades to come, necessitating an examination of strategies deployed for energy transition in these crucial segments. Though steps have been initiated to help reduce emissions, a bespoke, sector-specific decarbonization roadmap over a multi-year timeframe can help guide this journey.
Join Amit Sharma, managing director & chief executive officer at Tata Consulting Engineers, Ashish Singla, director for South Asia power and renewables research at S&P Global Energy and Ruchira Singh, editor, energy transition at S&P Global Energy, in a discussion about the requirements for India's industrial decarbonization.
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