Pathways to Net Zero: Unlocking the Opportunity to Reduce Industrial Emissions by 65% by 2050

New Delhi, February 12, 2025: Upholding its commitment to India’s net zero target by 2070, WRI India launched its expert note, Pathways to Net Zero: Policies and Measures for Industrial Decarbonization in India, at a convening in New Delhi on Wednesday. Highlighting key strategies for making industries cleaner and more sustainable, it focuses on the critical need for early action, innovative policies, and targeted investments to align industrial growth with Indias net-zero goal.

The report highlights the crucial role industries play in India’s economy, contributing 25% to the nation’s gross value added (GVA) in 2019,. However, it also mentions that industries are a significant source of carbon emissions, releasing 30% of India's total emissions, maintaining the urgent need for policy-driven interventions to reduce emissions while maintaining economic competitiveness. The findings show that without additional decarbonization policies, industrial emissions could nearly triple by 2050, making industrial decarbonization a key priority for India’s sustainable development.

The expert note examines emission reduction measures through a long-term decarbonization (LTD) scenario aligned with India’s net zero target. Using the India Energy Policy Simulator (EPS), WRI India projects that industrial emissions could be reduced by 65% in 2050 compared to a reference scenario without additional policies. Cumulative emissions could decline by 29,388 Million Metric Tonnes CO2 equivalent (MMtCO2e) between 2020 and 2050 through the following critical interventions:

• Industrial electrification and hydrogen mandate: Replacing fossil fuels with electrification and hydrogen from 2025 onwards, reaching 50% substitution by 2050. This measure could cut emissions by 12,367 MMtCO2e, accounting for 42% of reductions.
• Industrial energy efficiency: An annual 1.3% improvement in specific energy consumption could lower emissions by 4,606 MMtCO2e (16%).
• Material efficiency mandates: Promoting recycling and extending product lifespans in cement and steel industries could reduce emissions by 3,546 MMtCO2e (12%).
• Carbon pricing: Implementing a carbon price that rises from $4 per tonne of CO2 in 2019 to $50 per tonne by 2050 could result in a reduction of 2,945 MMtCO2e (10%).

Carbon Capture and Storage: A Necessary Step

Despite these measures, fossil fuels are projected to still account for almost 50% of industrial fuel demand in 2050. The note emphasizes the importance of Carbon Capture, Utilization, and Storage (CCUS) to mitigate residual emissions, especially from cement and chemical industries. However, challenges such as high capital costs, limited geological storage data, and insufficient infrastructure must be addressed to make CCUS viable.

Policy Recommendations for a Low-Carbon Industrial Future

The expert note provides six key recommendations to accelerate industrial decarbonization in India:

1. Support Low-Carbon Technologies: Investment in green hydrogen and CCUS is essential. Infrastructure for storage and transportation, as well as financial mechanisms like sovereign green bonds and blended finance, should be explored.
2. Scale Up Demand-Side Policies: Policies promoting material efficiency and circular economy initiatives, such as the National Circular Economy Roadmap and Construction and Demolition Waste Management (CDWM), need robust implementation.
3. Incentivize MSME Decarbonization: Micro, small, and medium enterprises (MSMEs) face financial barriers in adopting low-carbon technologies. Expanding access to credit guarantee schemes and public financing mechanisms is crucial.
4. Promote Indigenous Manufacturing: Domestic production of low-carbon technology components, including electrolyzers and solar PVs, will reduce import dependency and create green jobs.
5. Strengthen Research and Development: Targeted R&D investments will be required to scale emerging technologies.
6. Develop a Skilled Workforce: Training and reskilling workers will be necessary to support the transition to low-carbon industries, with a focus on gender-inclusive workforce strategies.

A Call for Decisive Action

Speaking at the launch, Ashwini Hingne, Associate Director at WRI India, said, “India’s industrial sector is at a crossroads. Decarbonization presents a major opportunity to drive economic growth, create jobs, and strengthen India's position in global markets. This expert note offers a clear roadmap for how policymakers, industry leaders, and financial institutions can work together to accelerate this transition.”

The expert note underscores the urgency of industrial decarbonization to align with India’s long-term climate commitments. With strategic interventions, policy support, and technological advancements, the industrial sector can transition toward a sustainable future while maintaining economic growth and global competitiveness.

For a detailed Expert Note on 'Pathways to Net Zero: Policies and Measures for Industrial Decarbonization in India' please see here.

For more information contact:

Piyush Tripathi | Mob- 8294154887| piyush.tripathi@wri.org
Varun Agarwal | Mob- 9920122719 | varun.agarwal@wri.org

About WRI India

WRI India, an independent charity legally registered as the India Resources Trust, provides objective information and practical proposals to foster environmentally sound and socially equitable development. Through research, analysis, and recommendations, WRI India puts ideas into action to build transformative solutions to protect the earth, promote livelihoods, and enhance human well-being.  

Know more: https://wri-india.org/