Indian corporations, particularly in high-emission sectors such as power, cement, and metals, are increasingly committing to science-based decarbonization targets as part of the nation’s broader push toward achieving net-zero emissions by 2070, a new report by ICRA revealed.

The study highlighted the advances in renewable energy adoption in the power sector and the use of innovative emission reduction strategies in the cement and metal industries.

A Path to Decarbonization

The report evaluated six years of emission trends among Indian companies, specifically focusing on the Science Based Targets initiative or SBTi.

Established in 2015, SBTi provides corporations with a scientific framework to align their greenhouse gas reduction goals with the Paris Agreement’s aim of limiting global warming to 1.5 degrees Celsius.

As of September 2024, 127 Indian companies have committed to SBTi targets, placing India sixth globally in corporate net-zero commitments.

The study revealed a notable shift toward renewable energy in the power sector, especially among companies with a net-zero commitment to reducing emissions.

Sectoral Shifts

The power sector contributes approximately 40 percent of India’s emissions and has seen increased renewable energy adoption among firms with net-zero targets.

Despite this progress, coal-based power generation remains a significant contributor to overall emissions.

In the cement industry, emissions from clinker production — a key ingredient in cement — are being addressed using alternative fuels such as biomass, fly ash and municipal solid waste, and emerging carbon capture technologies.

However, the metal and mining sector showed varied emission levels, with only some firms adopting sustainable practices.

The Broader Picture

India, which accounts for 7 percent of global GHG emissions, has seen its emissions rise to 2.8 billion tons of carbon dioxide equivalent in 2023, an 8 percent increase from 2019.

As per the Niti Aayog’s India Climate and Energy Dashboard database, the energy sector is the largest contributor with 75.8 percent emissions, followed by agriculture at 13.4 percent, industrial processes and produce use at 8.4 percent and waste management sectors at 2.33 percent.

Further, major energy sub-sectors, such as the electricity generation segment, generated about 40 percent of emissions, followed by cement at 6 percent, iron and steel at 5 percent, refinery at 3 percent and aluminum at 2 percent.

The government has set an ambitious target of achieving 50 percent non-fossil capacity by 2030.

Challenges and Opportunities

While Indian companies are making strides in reducing emission intensities, absolute emissions in critical sectors remain high. Only 7 percent of companies with net-zero commitments via SBTi belong to the power, cement, and metal sectors, collectively contributing 55 percent of India’s emissions.

“Indian corporates are taking meaningful steps toward sustainability, but achieving net-zero targets will require more widespread adoption of science-based frameworks and collaborative efforts to tackle hard-to-abate sectors,” the report stated.

Global Comparisons

Globally, 3,500 companies have committed to net-zero targets through SBTi, with the United Kingdom leading in corporate commitments despite contributing just 1 percent of global emissions.

Notably, China, contributing around 27 percent toward global emissions, had a lower share of 7 percent, with 233 companies committing to net-zero goals.

The USA, the second-largest emitter of GHG emissions, had a 13 percent share, with 425 companies committed to the net-zero goals via SBTi.

While contributing only about 1 percent to global emissions, the UK has the highest share of 21 percent, or 702 companies, pledging to net-zero goals.

The Road Ahead

The Indian corporates considered for this study have been implementing innovative strategies by transitioning to renewable energy and implementing energy efficiency measures, which have led to stability or decline in their emission intensities to a certain extent.

However, they still require concrete action plans to reduce absolute emissions for extended periods.

For India to align corporate commitments with its 2070 net-zero goal, the study said that it must adopt a multifaceted approach that includes accelerating renewable energy deployment, fostering innovation in carbon capture and storage technologies, and implementing stringent policies to drive sector-wide decarbonization.

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