EY India Latest News: India's green manufacturing revolution and the journey to net-zero

India's green manufacturing revolution and the journey to net-zero

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Regulatory frameworks are accelerating the adoption of decarbonization technologies, playing a key role in India's journey to net-zero emissions by 2070.


In brief

  • India has introduced several policies to promote sustainable manufacturing, including the National Green Hydrogen Mission and the Green Steel Mission.
  • Critical industries like steel, cement, oil and gas, power, and automotive are pivotal in carbon emissions reduction and adopting eco-friendly practices.
  • Advancements in clean energy, carbon capture, and green hydrogen are essential for decarbonizing hard-to-abate sectors.

India is on a transformative journey towards sustainable manufacturing, driven by a combination of regulatory support, technological innovation, and sector-specific strategies. This shift is crucial for achieving the nation's ambitious net zero strategy by 2070, as announced at the COP26 global climate summit in Glasgow. The country's total greenhouse gas (GHG) emissions in 2024 stood at 4.13 gigatons of CO2 equivalent, contributing approximately 7.8% to global emissions. To address this, India has made significant strides in advancing green technologies, fostering innovation, and developing clean energy value chains.

Regulatory landscape

The National Green Hydrogen Mission, launched in January 2023, is a cornerstone of this effort. It encourages the production and utilization of green hydrogen, a clean and adaptable energy source, to decarbonize sectors like steel and oil & gas. The Green Steel Mission, introduced in December 2024, aims to reduce carbon emissions in the steel industry, one of the most carbon-intensive sectors. These initiatives are complemented by climate change policies promoting energy efficiency and the use of eco-friendly technologies in manufacturing.

Sectoral impact

Critical industries such as steel, cement, oil and gas, power, and automotive are at the forefront of India's sustainable manufacturing efforts. The steel industry, for instance, is a significant contributor to the nation's GDP and employment. However, it is also a major source of emissions. The adoption of carbon reduction initiatives in oil and gas and impact of green hydrogen on steel industry, such as using green hydrogen in direct reduced iron processes and increasing the use of scrap in electric arc furnaces, is essential for reducing the sector's carbon footprint.

The oil and gas industry is actively contributing to India’s goal of net-zero emissions by channeling investments into innovative technologies such as role of CCUS in carbon neutrality and green hydrogen. These advancements are aimed at reducing emissions in downstream processes, while efforts are also being made to decarbonize upstream operations.

The power sector, which accounts for a significant portion of the country's emissions, is transitioning towards clean energy sources. India aims to achieve renewable energy targets of 500 GW of installed renewable energy capacity by 2030, significantly reducing its reliance on fossil fuels.

Technological innovations

Technological innovation is a key driver of sustainable manufacturing in India. Advancements in clean energy, carbon capture, and green hydrogen are essential for decarbonizing hard-to-abate sectors. The integration of smart grid technologies enhances the efficiency and reliability of electricity distribution systems, while innovations in energy storage solutions are critical for managing the intermittent nature of renewable sources like solar and wind.

The automotive sector is also undergoing a green transition, with a significant increase in EV adoption. In FY24, India recorded 1.7 million electric vehicles sales, a 42% growth from the previous year. The government has introduced various policies to support this transition, including the FAME II scheme, and the National Electric Mobility Mission Plan 2020.

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Summary

India's journey towards sustainable manufacturing is driven by a combination of regulatory support, technological innovation, and sector-specific strategies. By leveraging these drivers, India aims to achieve its net zero strategy by 2070, positioning itself as a global leader in environmental sustainability. The path ahead requires continued collaboration between the government, industry, and other stakeholders to overcome sustainability challenges and unlock new growth opportunities in the green technologies sector.

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