How State Climate Plans Are Key to India’s Net-zero Target

States can reap the benefits of being first movers in integrating a climate agenda into their economic aspirations.

How are Indian states gearing up to meet the country’s plan to go net zero by 2070? India’s federal structure means that state governments must be equal players in the journey to decarbonise and transition to cleaner energy. For India to achieve its net-zero commitments, states need to chart their climate plans to reap the benefits of being first-movers in integrating a climate agenda into their economic aspirations.

Several Indian states, such as Gujarat, Kerala, and Maharashtra have already announced net-zero targets, but each comes with its unique challenges, opportunities, and economic context. One may be heavily industrialised, leading to an exceptionally high cost of decarbonisation, while another may be highly dependent on coal due to its industries and naturally occurring coal reserves, calling for a mitigation plan that places a special focus on just transition for the coal economy. Therefore, a one-size-fits-all approach will not help with climate change mitigation and adaptation plans.

The Council on Energy, Environment and Water (CEEW) has been working with a few such states to assist in drafting long-term net-zero transition plans by utilising extensive and thorough modelling exercises. The process involves multiple consultations with various state government departments, officials, experts, and policy analyses. Drafting decarbonisation strategies at the sub-national level brought to the fore challenges that need to be resolved in order to be effective.

Data discrepancies

Long-term projections of indicators like energy demand and carbon emissions need a solid foundation of historical data. Although historical data can be accessed publicly, there may be multiple data sources for a single variable, each citing a different data point. For instance, multiple sources exist for state-wise sectoral consumption of electricity, like the state Economic Survey, the Central Electricity Authority (CEA) Dashboard, the CEA General Review Report, and the Report on Performance of Power Utilities by Power Finance Corporation (PFC) Ltd. Often, these agencies use different methodologies, in turn leading to different estimations. Acknowledging these shortcomings, the Indian government set up a Standing Committee on Statistics (SCoS) to review the existing framework and results of all surveys under the National Statistical Office. A similar agency should be set up to review all the existing datasets across different sources and ensure uniformity.

Capacity building

The current state governmental focus is on developmental issues, such as income, health, education and sanitation. In order to deal with climate change, this focus needs to be realigned to include decarbonisation into the developmental aspirations of a state. Although climate change may seem like an environmental issue, it really is an economic challenge that presents unique opportunities to revamp a state’s economy. The cross-sectoral implications of climate change on the economy bring about novel challenges to government departments that need to be skilled to deal with them. The departments currently involved in decarbonisation plans and strategies are usually the energy or environment and climate change departments. All other government departments, therefore, need to be involved significantly and be equipped with the capacity and knowledge required to deal with it.

First, to optimise decision-making and communication within the bureaucracy for climate plans, a separate committee led by the chief minister, including high-ranking officials such as the chief secretary and principal secretaries, should be established. This top-down approach should aim to streamline processes, ensure commitment and buy-in, and facilitate efficient coordination between departments. Second, the states should also look to collaborate with regional universities under the government's guidance. This would develop an academic curriculum aimed at empowering local youth to effectively address climate change concerns across the state, city, district, and village levels. Excellent examples of these would be the Tamil Nadu Green Climate Company and Tamil Nadu's Chief Minister's Green Fellowship Programme.

Procedural impediments

Administrative reassignments result in the rescheduling of project deadlines due to a break in communication channels, which takes time to restore. This, in turn, influences the decision-making process, thereby impacting institutional memory. An independent committee or a Special Purpose Vehicle (SPV) could be set up with a designated set of members and a structured time frame to work on devising the policy from incubation to implementation.

States at the frontline

When dealing with the climate crisis, time is not an ally. It is, therefore, imperative to facilitate a smooth process of developing long-term decarbonisation plans at the state level. These plans will allow government departments to assess their progress periodically. Additionally, these should be specific and chart out the pathways for an economy-wide sectoral decarbonisation, the finance required for this transition, and transparently lay out the technology and capacity-building needs. Such plans also need to be reviewed periodically and updated based on new developments in national policies, technological advancements, and the state's aspirations. India’s states are at the frontline in the fight against climate change and must prepare in time.

Medhavi Sandhani was a Research Analyst, and Zaid Ahsan Khan is a Programme Associate at the Council on Energy, Environment and Water (CEEW), an independent not-for-profit policy research institution. Send your comments to [email protected].

What Will It Take for India’s Steel and Cement Industry To Go Net Zero

A story of Marginal Abatement Cost (MAC) curves and greening India’s heavy industrial sectors.

If getting India to net-zero is like winning the Indian Premier League (IPL) cricket tournament, then hard-to-abate sectors such as steel and cement are its Royal Challengers Bangalore (RCB). Non-cricket fans: RCB has never won the IPL despite boasting a lineup of some of the best cricketers around.

India has a big challenge. It needs to decarbonise and reach net zero carbon emissions by 2070 without deindustrialising. Emission intensive heavy industries such as steel, cement, and aluminium are the hardest climb for the country’s industrial decarbonisation journey. This is largely due to the complex infrastructure they use. Take the steel industry, for instance, which emitted 297 million tonnes of CO₂ in 2021-22. There are four major routes to making steel and they differ on a variety of parameters — from how they treat the iron ore in the first place, to the technology used for reduction, and even the primary fuel used in the process. In India, the second largest steel producer in the world, almost 48 per cent of crude steel is produced through the blast furnace-basic oxygen route which is entirely coal-based. Now, what would it take to cut these emissions?

A first-of-its-kind analysis by CEEW found that USD 283 billion in additional capital expenses and USD 8.8 billion in additional operating costs per year would be needed to decarbonise India’s existing steel plants. Further, Carbon Capture Utilisation and Storage (CCUS) would cut the largest chunk of emissions (56 per cent) from the industry. But this means that near net-zero steel could be 40-70 per cent more expensive than current costs. This is because CCUS is at a relatively nascent stage of development globally and is not yet commercially viable.

What are the other less expensive options to propel the steel industry to (near) net zero? We did a Marginal Abatement Cost (MAC) curve analysis for the steel industry, which evaluates the different decarbonisation technologies available, the extent to which they can reduce emissions, and how much it will cost.

Similar to steel, India’s cement industry, which despite being one of the most energy-efficient in the world, emitted 218 million tonnes of CO₂ in 2018–19. Apart from the use of fossil fuels for electricity, carbon emissions are inherent to cement production due to the limestone processing required.

As the second-largest manufacturer of cement in the world, what would it take for the Indian cement industry to cut its current emissions to net zero? CEEW’s pioneering analysis found that the cost to decarbonise the existing cement production in India will amount to USD 334 billion in additional capital expenses and USD 3 billion in additional operating costs per year. As much as 67 per cent of emissions would need to be abated through carbon management techniques such as CCUS and carbon offsetting. But the cost is much higher than other alternatives. We unpack the various options to produce net-zero cement by breaking down the Marginal Abatement Cost (MAC) curve for the industry.

Poojil Tiwari is a Communications Associate at the Council on Energy, Environment and Water (CEEW), an independent not-for-profit policy research institution. Send your comments to [email protected].