By N Muthusezhiyan, Deputy Executive Director, CII GreenCo Council
Indian industry operates within a complex global climate landscape marked by escalating emission reduction mandates, supply chain decarbonization requirements, and resource transition imperatives. What began as voluntary sustainability initiatives has transformed into a strategic imperative influencing competitiveness, market access, and long-term viability. In this context, industrial decarbonization emerges as a critical leadership pathway that aligns business growth with India’s national climate commitments while positioning companies within global net-zero value chains.
The imperative of industrial decarbonization:
India’s industrial sector contributes approximately 30 percent of national greenhouse gas emissions, facing projections of potential tripling by 2050 absent decisive action. Global narratives underscore the urgency: industries worldwide account for over 8 GtCO2 annually, necessitating pathways like electrification, green hydrogen, and carbon capture to limit warming to 1.5°C. The Indian context amplifies this through energy import dependencies, water stress, and biodiversity pressures, creating multifaceted risks that demand systematic decarbonization strategies.
Rising operational costs from volatile fossil fuels, coupled with stakeholder demands for transparency and low-carbon products, elevate decarbonization from compliance to competitive advantage. National pledges—including 50% non-fossil electricity capacity by 2030 and 45% emissions intensity reduction—require industry to lead through measurable, verifiable actions.
India has already achieved 50% of its installed electricity capacity from non-fossil sources by 2025, ahead of the 2030 target, and is progressing well on emissions intensity reduction. The 500 GW non-fossil capacity goal by 2030 remains a key milestone in the clean energy roadmap—especially as demand doubles by 2050, necessitating that 50% of new capacity also be non-fossil.
Current progress and national alignment:
Indian industries demonstrate tangible advancements through structured programs. The CII GreenCo Rating has engaged over 1,500 facilities across twenty-seven sectors, delivering 604 million kWh energy savings and avoiding 5.7 million tons CO2 equivalent. Perform Achieve Trade scheme achieved 108 MT oil equivalent savings since inception, while sectors like cement and steel pursue intensity reductions of 20-30 percent by 2030.
Renewable integration accelerated with industries procuring 25 GW green power in 2025, with heavy emitters like aluminum shifting to hydro-solar mixes. These efforts support national aspirations, though SMEs, responsible for 45 percent emissions, require scaled interventions for comprehensive impact.
Accelerating toward 2050 net-zero:
Global value chain integration compels Indian industries to target net-zero by 2050, preceding the 2070 national goal. Core enablers include energy efficiency (25-40 percent untapped potential), green power scaling to 500 GW, and breakthrough technologies like green hydrogen (target: 5 MMT by 2030) and CCUS for difficult sectors.
CII GreenCo frameworks guide this via 10-parameter assessments, energy, renewables, materials— where platinum-rated plants are aiming to achieve Net Zero Operational Carbon (Scope 1 and 2) by 2030. Lifecycle approaches ensure Scope 1-3 coverage, transforming aspirations into actionable roadmaps.
Navigating external drivers:
Ever-evolving pressures test industrial resilience. The EU Carbon Border Adjustment Mechanism (CBAM), fully effective 2026, targets steel, aluminum, potentially impacting 15-20 percent exports and 0.2 percent GDP, necessitating verified low-carbon credentials. Emerging carbon taxes, bilateral agreements, and investor ESG scrutiny amplify compliance costs.
Supply chain demands from OEMs like Godrej, Larsen & Toubro, and Kirloskar mandate supplier decarbonization, while end-customers, preferring green products, drive premium pricing. Resource scarcity (water deficits in 50 percent districts) further mandates efficiency, positioning proactive firms ahead.
Visionary leadership:
Over hundred companies, including Reliance, Tata Steel, JSW, Adani Green, Mahindra, have committed to 2050 net-zero via SBTi-aligned targets. Leadership demands visionaries who set ambitious, science-based goals, unlocking green finance ($2.5 trillion needed) and innovation ecosystems over mere regulatory adherence.
Proactive stances deliver superior outcomes: certified firms report 3-5x ROI through savings, market premiums, and risk mitigation, contrasting reactive penalties.
Top-down dynamics and SME integration:
Large OEMs spearhead top-down transformation, enforcing green procurement on hundreds of SMEs via assessments, capacity building, and shared roadmaps. Godrej, Hero MotoCorp, Kirloskar initiatives cascade requirements, enabling suppliers to achieve GreenCo ratings that cut energy 20 percent, water 30 percent.
SME efforts aggregate powerfully: cluster programs in Surat textiles, Coimbatore pumps avoid 1-2 MT CO2 yearly, laddering to corporate portfolios and national inventories. This symbiotic model amplifies impact across sixty-three million MSMEs.
Policy ecosystem and enabling mechanisms:
Robust policies catalyze progress: National Green Hydrogen Mission, PLI for advanced chemistry cells/solar, and Carbon Credit Trading Scheme. MoEFCC mandates 5-10 percent Greenhouse Gas Emission Intensity reductions, complemented by state-level incentives.
CII GreenCo Council leads with net-zero program, sectoral summits, and supply chain toolkits, partnering NITI Aayog, UNIDO for mainstreaming. These frameworks ensure accessibility, harmonization, and scalability.
Environmental decarbonization has evolved from peripheral concern to core strategic discipline for Indian industry. Structured approaches like GreenCo ratings introduce rigor, verification, and continuous enhancement, converting climate risks into opportunities for leadership. As pressures intensify, visionary adoption across scales will define India’s global stature.
