India’s next investment cycle will shape its carbon future, Pg6

Key Highlights:

• The United Nations Environment Programme (UNEP) warned that the world could exceed the 1.5°C warming threshold soon, increasing pressure for faster decarbonisation.
• India has a unique opportunity as an estimated 86% of its 2070 building stock is yet to be constructed, allowing for early integration of efficiency.
• Total floor space is projected to more than double from 18 billion sq m in 2020 to 42 billion sq m by 2070, alongside significant growth in steel and cement production.
• The International Energy Agency (IEA) estimates transmission bottlenecks have held back approximately 60 GW of renewable capacity in India.
• India's cost of capital for grid-scale renewables is about 80% higher than in advanced economies, impacting project viability.

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Detailed Insights:

• India's future emissions will largely depend on the choices made in building new infrastructure and the technologies embedded in these investments.
• In contrast, advanced economies, according to the IEA, will use existing building stock for about 80% of their needs by 2050, facing challenges with retrofitting old structures.
• The Bureau of Energy Efficiency (BEE) reports that while 27 states notified the Energy Conservation Building Code (ECBC) 2017, only 21 legally incorporated it.
• BEE has since issued the Energy Conservation and Sustainable Building Code (ECSBC) 2024 for commercial buildings and the Eco-Niwas Samhita (ENS) 2024 for residential buildings.
• The Ministry of Power plans for roughly 590 GW of generation additions between 2023 and 2032, making the unresolved transmission gap a critical issue.
• Decarbonising sectors like steel and cement is challenging, with hydrogen-based green steel not yet viable in India and large-scale carbon capture for cement still distant.
• Public procurement by entities like Indian Railways and the National Highways Authority of India can create an early market for lower-emission materials.
• India has a green-steel taxonomy, and the Ministry of Steel proposed aggregated procurement with emissions-intensity thresholds, aligning with the Carbon Credit Trading Scheme (CCTS).
• Targeted financial instruments such as payment-security mechanisms and partial credit guarantees can help ease financing risks for clean infrastructure projects.

Key Concepts Involved:

• Decarbonisation: The process of reducing or eliminating carbon dioxide emissions from energy sources.
• Stranded Assets: Assets that have suffered unanticipated or premature write-downs, devaluations, or conversion to liabilities.
• Carbon Credit Trading Scheme (CCTS): A market-based mechanism that allows entities to trade carbon credits to meet emission reduction targets.
• Energy Conservation Building Code (ECBC): A set of guidelines and standards for energy-efficient design and construction of buildings in India.