Ratings agency ICRA in its recent report said that commitments on emission control made by India at the recent Glasgow COP26 summit are expected to benefit the country in the long-term with new technologies in energy efficiency, carbon reduction and green fuels etc. It said that this will also open COP26 to massive investment opportunities across segments like renewables, the EV ecosystem, ethanol blending, improvement in energy efficiencies and carbon capture technologies.
India has committed to reduce greenhouse gas (GHG) emissions by 1 billion metric tonnes by 2030 and has additionally committed to a net zero carbon emission target by the year 2070. Being a developing country, which is at an inflection point in terms of its energy consumption, the nation’s per capita energy consumption is expected to surge 3x-4x over the long term, the report said. “In order to achieve the net zero target by 2070, a focused roadmap would be required. It calls for timely interventions by the government and large capex/investments in GHG emitting sectors like power, industry and transport. These sectors together emit ~90 per cent of CO2 as per 2019 data of International Energy Agency. Ambitious targets for COP26 opens massive investment opportunities across segments stemming from 500 GW renewables by 2030, higher EV penetration (~10 per cent by 2025), 20 per cent ethanol blending for petrol (~3x increase from current levels), improvement in energy efficiencies (battery storage, smart cities, etc.) and improvement in carbon capture from enhancing green cover and use of advanced technologies,” Rohit Ahuja, Head of Research and Outreach, ICRA said. This, he added, would be a daunting task, and would need massive policy interventions to ensure investments across aforementioned sectors remain profitable enough to sustain well beyond 2030.
The Prime Minister has presented a five-pronged strategy, during the COP26 summit, called ‘Panchamrit’ (the five nectar elements), to deal with the climate change challenge. “These strategies circulate primarily around higher generation and use of renewable energy sources for incremental energy needs, while simultaneously limiting and then reducing emissions from conventional sources of energy,” the report said. “This makes strategic sense considering recent success in capacity additions (>150 GW capacities commissioned), and coal power generation being the largest contributor to carbon emissions. CO2 emissions form 76 percent (~2 bn MT) of overall GHG emissions (~2.7 bn MT) in India, most of which (>80 per cent) stem from use of coal,” ICRA added. “Being one of the fastest growing economies in the world, India needs to find a fine balance between reduction in carbon emission, and surging energy needs. As the country enters the developed economy tag over the next few years, the per capita energy consumption is set to surge multifold (with China being ~4x and US being 10x of India),” Ahuja said.
He added that the government policies need to ensure no compromise in its ever-expanding energy needs that could hamper its growth ambitions, while simultaneously work towards removing tag of one of the most polluting nations in the world.
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