As the world’s third-largest emitter of greenhouse gases (GHGs), India’s actions would significantly impact global efforts to mitigate climate change. Although, with lower per capita consumption compared to other developed and developing countries[1],[2] India‘s journey towards net-zero will be defined by its energy landscape – a sector that contributes more than 75% of the nation’s total GHG emissions.[3],[4] The energy sector will be at the core of India’s climate mitigation efforts, with the country seeking to reduce reliance on fossil fuels, along with embracing various other cleaner and renewable sources.
For years, India has been striving for a greener future by promoting clean fuels, adopting innovative technologies, and establishing ambitious renewable energy targets. However, the path to achieving net-zero emissions remains uncertain. On this International Day of Climate Action, we take the opportunity to reflect on the country’s advancements in decarbonising the transportation, industrial, and power sectors as we progress toward a sustainable, net-zero future.
A Green Energy Revolution
India has set a target of achieving 500 GW of renewable energy capacity by 2030, primarily through a transition to renewable energy, necessitating large-scale deployment of solar, wind, and hydropower, supported by grid modernisation and energy storage solutions. Till date, we have achieved a capacity of 153 GW toward this target, while concurrently developing extensive expertise in renewable energy. This expertise is also shared globally through initiatives such as the International Solar Alliance, aimed at making an investment of one trillion US dollars in solar energy solutions by 2030, followed by benefitting over one billion people and generating a solar energy capacity of 1,000 GW.
Despite a 300% growth in renewable energy sources over the past decade, the energy transition is expected to be challenging, and reaching the 500 GW target will necessitate significant investment—approximately $223 billion by 2030.[5],[6] India’s reliance on coal, which constitutes around 50% of our energy mix, along with our limited energy storage capacity, hinder the expansion of renewable energy sources. Despite the ambitious targets, Indian states continue to depend on non-renewable energy sources.
One such example is Kerala, which depends on thermal power for 52% of its total usage, while possessing specified goals of achieving 100% renewable energy by 2040 and carbon neutrality by 2050. The state has made some significant progress, such as the establishment of a 1,000 KW hydrogen-based energy plant at Cochin International Airport, however, its dependence on thermal energy imports raises concerns about energy security and sustainability.
Similarly, Tamil Nadu increased its renewable energy share from 45% to 54% between 2019 to 2023[7], largely due to the expansion of solar and wind resources. Despite their efforts to promote cleaner fuels and enhance emissions controls, the transition is slow due to the ongoing challenges from thermal power plants especially with the growing industrial capacity.
Gujarat’s renewable energy policy also presents an example of a push towards sustainable development, with a target of achieving 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030. As of April 2024, the State had achieved a total energy capacity of 27.8 GW, comprising around 11.7 GW of wind, 13.8 GW of solar and 1.99 GW of large hydropower, along with smaller capacities of biomass (0.11 GW) and small hydropower (0.09 GW).[8] Balancing industrial expansion with environmental protection becomes crucial, since the development of gas and water grid to support industrial growth are not sufficient to overcome these challenges.
Fuel Efficiency: Setting New Standards
India is also making significant strides towards cleaner transportation with initiatives such as Sustainable Alternative Towards Affordable Transportation (SATAT), which focuses on Compressed Bio-Gas (CBG) as an alternative renewable energy source for the automotive sector. It aims to reduce dependence on non-renewable fuels, while curbing soaring vehicular emissions, particularly in urban areas. In addition to these efforts, India transitioned to BS-VI emission norms from BS-IV in April 2020, significantly reducing the sulphur content in fuels, keeping it below 10 ppm compared to 50 ppm in BS-IV engines.[9] Combined with the growing adoption of electric vehicles (EVs) under the FAME scheme (Faster Adoption and Manufacturing of Electric Vehicles), soon, roads in India are expected to become cleaner and greener.
Although progress has been made towards the necessary transitions, challenges remain in the adoption pace due to insufficient infrastructure in many regions for CBG production and EV charging stations. While the EVs themselves produce zero tailpipe emissions, their life cycle emissions depend on the source of electricity used to charge them. In India where the traditional electricity generation sources still dominate, electric vehicles may not demonstrate a meaningful life cycle emissions savings advantage.[10] Cost-effectiveness and limited accessibility of electric vehicles also raise concerns about their broader adoption. With urban populations and vehicle numbers both steadily rising, the question remains: are these initiatives progressing quickly enough to make a significant impact towards climate mitigation?
Green Hydrogen: The Future of the Industry
One of the biggest challenges for India’s sectoral emissions reduction lies in decarbonizing hard-to-abate industries such as steel, cement, and chemicals and green hydrogen – a zero-emission alternative – can be the key to this transformation. The government of India aims to become a global leader in green hydrogen production, which is seen as essential for decarbonizing industrial processes that have historically relied on fossil fuel, helping these industries achieve carbon neutrality.[11] India’s National Hydrogen Mission has set up a target of producing five million metric tonnes (MMT) of hydrogen annually by 2030, with an associated renewable energy capacity addition of about 125 GW.[12] Various initiatives have been undertaken by the government and private organisations to meet the hydrogen demand. India’s, Strategic Interventions for Green Hydrogen Transition (SIGHT) programme announced in January 2024 emphasizes on Research and Development to accelerate technological advancements in Green Hydrogen production while supporting pilot projects, large-scale demonstrations and collaborative research initiatives.[13] The country has also expressed its ambition of exporting hydrogen to Japan, South Korea, and Europe.[14] Alongside, Indian Oil is planning to set up the country’s first green hydrogen plant at Mathura refinery, and two hydrogen refuelling stations have already been established, one each at Indian Oil R&D Centre, Faridabad and National Institute of Solar Energy, Gurugram.
Yet, this endeavour faces challenges, including the current high production costs of green hydrogen, the need for substantial infrastructure investments, and technological gaps between pilots and large-scale implementation. Production process of hydrogen in India is expensive and at present the efficiency is estimated at 60-80% by calorific value.12 India’s collaborative efforts to accelerate knowledge sharing, technology transfer and joint project development in this space should result in rapid growth of the nation as a green hydrogen producer. Some key partnerships developed include the Indo-German task force, Indo-Australian task force, MoUs with countries such as UAE, and Saudi Arabia, and the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE). However, without sustained policy support, financial incentives, and technology innovation, the scale of this growth and subsequent decarbonisation of India’s hard-to-abate industrial sectors might remain a distant objective.
What should the road ahead look like?
It is important to remember that the path to net zero will need to go in parallel with India’s ambitions of growth and development. The country needs innovative and location-specific initiatives and scaling decentralised renewable energy systems, with a focus on rural and remote regions, will be a very important step towards this. Decentralized renewables, including microgrids and off-grid solar systems, will complement large-scale renewable projects by improving energy access across the country while minimizing transmission losses and reducing pressure on the grid.
Another pathway will be the growth of electric mobility outside of urban areas. For example, incentivizing EVs in the rural and semi-urban belt, with support in the form of infrastructure such as solar-powered charging stations, can help ensure lower transport emissions and costs, which in turn can also be a boost for the farming community. Pilot projects such as Kerala integrating EVs with solar-powered charging stations on highways and other major roads[15] have the potential to provide learnings for implementation at scale.
Further, encouraging public-private partnerships in renewable energy and renewable storage can also speed up infrastructure growth and make it attractive to investment flows. Opportunities offered by innovative financing models such as green bonds and carbon credits or international climate finance frameworks such as the Green Climate Fund can also help reduce some of the financial hurdles faced by the clean energy sector.
The country will need to work across multiple facets of this complicated challenge, and bring together diverse partners – research, industry, state governments, etc. – in order to achieve its ambitious climate mitigation goals. The future of India’s energy transition will have to integrate sustainability with development – an intricate balancing act that will ultimately define the country’s path to net-zero.
[1] MoEFCC. (2023). India: Third National Communication and Initial Adaptation Communication to the United Nations Framework Convention on Climate Change. New Delhi: Ministry of Environment, Forest and Climate Change, Government of India; https://unfccc.int/sites/default/files/resource/India-TNC-IAC.pdf
[2] MoEFCC. (2022). India’s long-term low-carbon development strategy. Ministry of Environment, Forest and Climate Change, Government of India; https://unfccc.int/sites/default/files/resource/India_LTLEDS.pdf
[3] MoEFCC. (2023). India: Third National Communication and Initial Adaptation Communication to the United Nations Framework Convention on Climate Change. New Delhi: Ministry of Environment, Forest and Climate Change, Government of India; https://unfccc.int/sites/default/files/resource/India-TNC-IAC.pdf
[4] MoEFCC. (2022). India’s long-term low-carbon development strategy. Ministry of Environment, Forest and Climate Change, Government of India; https://unfccc.int/sites/default/files/resource/India_LTLEDS.pdf
[5] MNRE (2024), Installed Renewable Energy Capacity (MW) Government of India; https://mnre.gov.in/year-wise-achievement/
[6] Grant Thornton Bharat (2024): Achieving 500 GW of renewable energy capacity by 2030; https://www.grantthornton.in/globalassets/1.-member-firms/india/assets/pdfs/achieving-500-gw-of-re-capacity-by-2030.pdf
[7] Central Electricity Authority (2023): ALL INDIA INSTALLED CAPACITY (IN MW) OF POWER STATIONS; https://cea.nic.in/wp-content/uploads/installed/2023/03/IC_March_2023.pdf
[8] Gujarat aims for 100 GW renewable energy by 2030: CM Bhupendra Patel. (2024, September 17). The Times of India; https://timesofindia.indiatimes.com/business/india-business/gujarat-aims-for-100-gw-renewable-energy-by-2030-cm-bhupendra-patel/articleshow/113422510.cms
[9] Sustainable Alternative Towards Affordable Transportation – Ministry of Petroleum And Natural Gas; https://mopng.gov.in/en/pdc/investible-projects/alternate-fuels/sustainable-alternative-towards-affordable-transportation
[10] Alternative Fuels Data Centre: Electric Vehicle Benefits and Considerations; https://afdc.energy.gov/fuels/electricity-benefits
[11] National Green Hydrogen Mission | Ministry of New and Renewable Energy | India; https://mnre.gov.in/national-green-hydrogen-mission/
[12] MNRE (2022): Decarbonising India, Achieving Net-Zero Vision; https://static.pib.gov.in/WriteReadData/specificdocs/documents/2023/jan/doc2023110150801.pdf
[13] EY & MNRE (2024) India’s green hydrogen revolution An Ambitious Approach, Press Information Bureau; https://static.pib.gov.in/WriteReadData/specificdocs/documents/2024/may/doc2024510336301.pdf
[14] Invest India (2022); India’s Green Hydrogen Policy; https://www.investindia.gov.in/team-india-blogs/indias-green-hydrogen-policy
[15] Agency for New and Renewable Energy Research and Technology (2022): Installation of Solar Powered Public EV Charging Stations; https://anert.gov.in/notice_details?id=173
