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India's aluminum sector seeks $ 29 bn for net-zero emissions
ECONOMY & POLICY

India's aluminum sector seeks $ 29 bn for net-zero emissions

According to a study conducted by the Council on Energy, Environment, and Water (CEEW), India's aluminium industry requires an additional Rs 2.2 lakh trillion in capital expenditure (CAPEX) to achieve net-zero carbon emissions. The study pointed out that renewable energy (RE) could potentially reduce 49% of the industry's emissions, although relying entirely on RE poses challenges due to its intermittent nature.

The study highlighted that in the fiscal year 2019-20, the aluminium industry, a crucial sector in India's power and economy, emitted 77 million tonnes of CO2. Of these emissions, 80% were attributed to electricity consumption. Funded by 'bp', the study indicated that transitioning to a net-zero aluminium industry would incur a 61% increase in costs, with an additional Rs 260.49 billion in annual operating expenditure (OPEX).

CEEW's study introduced a marginal abatement cost (MAC) curve, outlining technologies capable of decarbonising the industry and their associated costs. Hemant Mallya, a CEEW Fellow, stressed the necessity of capital investment and scaling up from various sectors to align with India's climate objectives. He stated, "Aluminium and fertiliser industries require significant government support to establish essential infrastructure such as power grids and pipelines."

Furthermore, the study revealed that implementing energy efficiency measures in alumina refining, aluminium smelting, and waste heat recovery could reduce emissions by 8% without raising costs. Additionally, further decarbonisation measures, including RE and carbon capture, showed a positive MAC, implying net costs for facilities implementing these solutions.

Deepak Yadav, Programme Lead at CEEW, emphasised the importance of incentivising renewable energy, especially in eastern states with limited wind power potential. He advocated for the establishment of an R&D ecosystem to gather data on decarbonisation measures and the implementation of favorable policies to foster a carbon capture, utilisation, and storage (CCUS) ecosystem.

The study also addressed decarbonisation challenges faced by India's fertiliser industry, responsible for approximately 25 million tonnes of CO2 emissions annually due to energy-intensive processes and fossil fuel utilization. While transitioning to RE power could lead to a 2% reduction in emissions, shifting from grey to green ammonia production could result in a 151% emissions decrease, leading to net-negative emissions. Additionally, various carbon management options such as CCS, CCU, and afforestation were explored.

According to a study conducted by the Council on Energy, Environment, and Water (CEEW), India's aluminium industry requires an additional Rs 2.2 lakh trillion in capital expenditure (CAPEX) to achieve net-zero carbon emissions. The study pointed out that renewable energy (RE) could potentially reduce 49% of the industry's emissions, although relying entirely on RE poses challenges due to its intermittent nature. The study highlighted that in the fiscal year 2019-20, the aluminium industry, a crucial sector in India's power and economy, emitted 77 million tonnes of CO2. Of these emissions, 80% were attributed to electricity consumption. Funded by 'bp', the study indicated that transitioning to a net-zero aluminium industry would incur a 61% increase in costs, with an additional Rs 260.49 billion in annual operating expenditure (OPEX). CEEW's study introduced a marginal abatement cost (MAC) curve, outlining technologies capable of decarbonising the industry and their associated costs. Hemant Mallya, a CEEW Fellow, stressed the necessity of capital investment and scaling up from various sectors to align with India's climate objectives. He stated, Aluminium and fertiliser industries require significant government support to establish essential infrastructure such as power grids and pipelines. Furthermore, the study revealed that implementing energy efficiency measures in alumina refining, aluminium smelting, and waste heat recovery could reduce emissions by 8% without raising costs. Additionally, further decarbonisation measures, including RE and carbon capture, showed a positive MAC, implying net costs for facilities implementing these solutions. Deepak Yadav, Programme Lead at CEEW, emphasised the importance of incentivising renewable energy, especially in eastern states with limited wind power potential. He advocated for the establishment of an R&D ecosystem to gather data on decarbonisation measures and the implementation of favorable policies to foster a carbon capture, utilisation, and storage (CCUS) ecosystem. The study also addressed decarbonisation challenges faced by India's fertiliser industry, responsible for approximately 25 million tonnes of CO2 emissions annually due to energy-intensive processes and fossil fuel utilization. While transitioning to RE power could lead to a 2% reduction in emissions, shifting from grey to green ammonia production could result in a 151% emissions decrease, leading to net-negative emissions. Additionally, various carbon management options such as CCS, CCU, and afforestation were explored.

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