Executive summary

Climate change impacts are increasingly being felt worldwide, and emissions mitigation commitments by countries and companies have picked up the pace. This has been especially true since the release of the Intergovernmental Panel on Climate Change (IPCC) special report on the impacts of global warming of 1.5°C above pre-industrial levels that called for achieving global net-zero (NZ) emissions by the middle of the century (Fischlin et al. 2018). At the 26th session of the Conference of the Parties (COP26) in 2021, India demonstrated its climate leadership by announcing that it would achieve NZ carbon emissions by 2070. This will require significant transformation across key sectors that produce and consume energy, such as agriculture, industry, power, transport, building and waste. Each state in India will have distinct low-carbon transition pathways depending on its current level of economic development, resource availability, and socio-political context. As a developing economy, Tamil Nadu (TN) is bound to witness increased economic growth in the near future, resulting in higher per-capita income and urbanisation levels, which will further lead to increased energy demand and emissions across sectors contributing to the economy. The challenge for TN, then, is to identify and chart out decarbonisation pathways for the aforementioned sectors, while not compromising on the prospects of economic growth. In addition, TN will need to identify and nurture technologies and financing that will enable its NZ transition. A commitment to NZ emissions, therefore, requires consistent efforts to adopt low-carbon pathways across various sectors in the near, medium, and long term. Our analysis based on the latest greenhouse gas (GHG) inventory and long-term projection for emissions in business as usual (BAU) and NZ scenarios reveals important trends and provides the following significant insights.

TN saw an 84 per cent rise in overall GHG emissions between 2005 and 2019

From around 100 Million tons of Carbon di-oxide Equivalent (MtCO2eq) in 2005, TN’s overall GHG emissions rose to 184 MtCO2eq in 2019. In this year, the state’s energy sector accounted for 77 per cent of the total emissions at 141 MtCO2eq. Other key sectors include the Agriculture, Forestry and Land Use (AFOLU) sector emitting around 22.5 MtCO2eq, accounting for around 12 per cent of the overall emissions, followed by the Industrial Processes and Product Use (IPPU) and Waste sectors at approximately 11 MtCO2eq and 9.5 MtCO2eq, accounting for around 6 per cent and 5 per cent each.

Net zero is as much about economic transformation as it is about climate change

NZ ambition entails reducing GHG emissions across key energy producing and consuming sectors. The face of mobility will change from fossil-based to low-carbon mobility, necessitating a significant change in the automobile industry set up. Industrial energy use will have to be largely electrified, having implications through pass through of electricity prices. Rapid renewable energy penetration will present significant opportunities for investment and job creation. Therefore, it is critical to view NZ transition as a larger economic transformation that has profound implications for the future economy of TN.

Understanding when could the state’s emissions peak is as important as the choice of NZ year

Peak year is defined as the year in which absolute economy-wide emissions peak, following which there will be a continuous drop in emissions. Given the diverse economic profiles of various states in India, the shape of emissions pathway for various states, including at what level and which year they will peak, would be different. Understanding this critical milestone is critical for various stakeholders in the state.

Overall CO2 emissions in the BAU (a) and NZ (b) scenarios

Source: Authors’ analysis

The pursuit of NZ emissions results in massive electrification of end-use energy consumption

A net-zero scenario necessitates electrification of the various end use sectors. Total electricity consumption in 2070 Tamil Nadu in the NZ scenario is 75% higher than that in the BAU scenario. In 2020, the building and industry sectors in the state consume about 44 per cent and 42 per cent of the total electricity respectively, while agriculture accounts for 13 per cent, and the transport sector accounts for a negligible 1 per cent. In projections for the future, the electricity demand for NZ emissions is higher for all sectors, and transport sees an exponential growth, accounting for 24 per cent of the share in 2070. Therefore, this key insight pertains to the criticality of the power sector and the imperative to significantly ramp up renewable generation capacity to meet growing consumption needs.

Electricity consumption, by sector, in the BAU (a) and NZ (b) scenarios

Source: Authors’ analysis

The efficiency of the energy system increases as a result of this massive electrification and dedicated efforts to enhance energy efficiency

Our assessment shows that significant efficiency gains are obtained from the large-scale electrification of end-use sectors. In addition, dedicated interventions to enhance energy efficiency across sectors will have to be undertaken. Compared to 2020, the energy intensity of TN’s GSDP has to reduce by 24 per cent in 2030 and 55 per cent in 2050 to achieve NZ emissions. TN’s total electricity consumption for 2020–21 stood at around 110 BUs. Electrification and energy efficiency gains imply mean annual energy savings in 2070 could be equivalent to nearly three times that of current electricity consumption.

Final energy demand, by sector, in the BAU (a) and NZ (b) scenarios

Source: Authors’ analysis

Power sector decarbonisation paves the way for other sectors to decarbonise

In the NZ scenario, power sector emissions are projected to peak at around 157 MtCO2 in 2040, followed by the building sector at 20 MtCO2 in 2045, and the transport and industry sectors at nearly 62 and 50 MtCO2 in 2050, respectively. This signifies that the power sector holds the highest emissions mitigation potential and is key for other end-use energy consumption sectors to successfully decarbonise, given the extent of electrification observed in the NZ scenario. It is imperative that early focus of decarbonisation efforts is in the power sector, where many technologies are already cost competitive.

TN needs nearly 475 GW of solar and 90 GW of wind power (including offshore) to achieve NZ emissions by 2070, it is imperative to reassess the state’s solar and wind potential

Our assessment indicates that TN will need to procure power from outside the state in the future in both the NZ and BAU scenarios. The need for electrification of the end use sectors to achieve the goals of net-zero necessitates the need for significant renewable energy capacity addition over the coming decades. It requires TN to add around 9 GW of solar capacity and 2 GW of wind capacity on average every year, with capacity addition growing at compounded annual growth rates (CAGRs) of 8 and 4 per cent, respectively, for solar and wind. According to TN’s energy policy note from 2023–24, one of the targets is to increase the installed capacity of solar to 20 GW over a period of 10 years, indicating that the state is on track in the near term to achieve NZ emissions in the long term. The Ministry of New and Renewable Energy (MNRE) has conservatively estimated that 17 GW of solar capacity can be obtained using 3 per cent of wasteland area (PIB, 2024). However, other estimates indicate that there is much greater potential, which has to be reassessed in the light of the net-zero target.

Electricity generation, by fuel, in the BAU (a) and NZ (b) scenarios

Source: Authors’ analysis

Nearly 17 GW of offshore wind capacity is required to meet the 2070 NZ target

While it is necessary to increase both solar and onshore wind power capacity in the future, offshore wind power must start contributing to clean energy generation. While India currently does not have any offshore wind power plants, the National Institute of Wind Energy (NIWE) identified that there is potential to harness about 70 GW from offshore wind, spread across 16 offshore zones along the coasts of TN and Gujarat. The MNRE aims to bid out 37 GW worth of capacity by 2030. In 2023, the MNRE published an updated strategy paper and a tender for allocating seabed areas to develop 7 GW of open access–based or captive offshore projects off the TN coast. This could potentially help reduce the emissions footprint of commercial and industrial electricity consumers. Offshore wind, therefore, remains an important untapped source of energy in TN.

Compared to 2005, the overall energy sector emission intensity of TN’s GSDP needs to reduce by 46% in 2030 and 87% in 2050 to achieve NZ emissions

Emission intensity measures the amount of GHGs released per unit of economic output. India’s NDC aims to reduce the emission intensity of the gross domestic product (GDP) by 45 per cent from the 2005 level (Government of India 2022). In this context, based on the modelling results, TN needs to reduce its emission intensity by 46 per cent in 2030 and by a further 87 per cent by 2050, compared to 2005 levels, to achieve NZ emissions by 2070. For context, in 2020, for every USD 1 million of TN’s gross state domestic product (GSDP), the state’s energy sector emitted nearly 510,000 tCO2. This Tamil Nadu’s Greenhouse Gas Inventory and Pathways for Net-Zero Transition 3 has to be reduced to about 410,000 tCO2 in 2030 and 100,000 tCO2 in 2050.

The Green Tamil Nadu (GTN) Mission could sequester CO2 emissions worth 19–25 MtCO2 per annum

A comprehensive study of one of TN’s flagship missions, the GTN Mission, reveals that the GTN Mission is capable of sequestering emissions to the tune of 19–25 MtCO2 per annum. The average annual carbon sequestration potential is 19 MtCO2 for a tree rotational period of 15 years, and this goes up to 25 MtCO2 for a rotational period of 10 years. Carbon sequestration through trees will have to be an important part of the strategy to achieve net-zero for the state.