SDG 7: Affordable and Clean Energy | SDG 9: Industry, Innovation and Infrastructure | SDG 12: Responsible Consumption and Production | SDG 13: Climate Action
NITI Aayog | Bureau of Energy Efficiency (BEE) | Ministry of Steel | Ministry of Commerce & Industry
The NITI Aayog report “Scenarios Towards Viksit Bharat and Net Zero - Sectoral Insights: Industry” mentions that the industrial sector, accounting for 24% of India’s total GHG emissions (2020), is central to achieving a USD 30 trillion economy by 2047 while reaching Net Zero by 2070 . Heavy industries like steel, cement, and aluminium currently rely on fossil fuels for approximately 83% of their energy mix, a figure that must fall to 26% under the transformative Net Zero Scenario (NZS).
Addressing the "Green Premium"—the additional cost of low-carbon technologies—is vital, as hydrogen-based steelmaking currently faces up to 40% higher capital investment and 15–25% higher operating costs than coal-based routes. To bridge this gap, the report details an ambitious technological pivot toward green hydrogen, electrification, and circular material flows, requiring a cumulative investment of USD 6.1 trillion by 2070.
Strategic Pillars for Industrial Decarbonization and Growth The roadmap identifies several critical foundational pillars to decouple rising production from carbon emissions:
Green Hydrogen as a Decarbonization Vector: Projected demand for green hydrogen rises from a near-zero base to 42 million tonnes by 2070 in the NZS, serving as a primary reducing agent in steelmaking and a feedstock for green ammonia in fertilizers.
Deepening Circular Economy Practices: Transitioning to 40% scrap utilization in steel and aluminium by 2070 is essential to reduce reliance on energy-intensive ore-based smelting.
Accelerating Industrial Electrification: NZS assumes industrial electrification will surge to 55% of the energy mix by 2070, driven by non-fossil captive power including renewables and Small Modular Reactors (SMRs).
Innovative Material Substitution: Adoption of Limestone Calcined Clay Cement (LC3) can reduce process CO2 emissions in the cement sector by 40%, while clinker-to-cement ratios are targeted to reach 0.55 by 2070.
Carbon Capture and Last-Mile Abatement: For point-source-amenable residual emissions, Carbon Capture, Utilisation, and Storage (CCUS) must scale to roughly 1,000 MtCO₂/yr by 2070.
What is the “Green Premium” in industrial decarbonization? The “green premium” refers to the additional cost incurred by using a low-carbon or zero-carbon technology or material compared to its conventional, fossil-fuel-based counterpart. For example, hydrogen-based DRI steel plants currently face approximately 30-40% higher capital investment costs and 15-25% higher operating costs compared to traditional coal-based routes. Bridging this premium through policy instruments like Viability Gap Funding (VGF), carbon credits, and green public procurement is vital to encourage early private sector adoption of technologies that are not yet cost-competitive at scale.
Policy Relevance
The NITI Aayog findings represent a transition from discrete energy savings to a systemic industrial “leapfrogging” toward low-carbon leadership. By institutionalizing the Net Zero Scenario, the Ministry of Commerce & Industry and BEE are providing a roadmap to shield Indian exports from global carbon regulations like the EU’s CBAM while creating a competitive “Green Growth” edge.
Safeguarding Trade Competitiveness: Establishing a “Green Steel” taxonomy and eco-labeling through a “Green Stamp” initiative can distinguish low-carbon Indian products in price-sensitive and carbon-conscious global markets.
Scaling Domestic Manufacturing (Atmanirbharta): Expanding Production Linked Incentive (PLI) schemes to cover the full value chain of electrolysers, CCUS (Carbon Capture, Utilization, and Storage) components, and SMRs is critical to reducing import dependency on clean technologies.
Empowering the MSME Ecosystem: Implementing ADEETIE (Assistance in Deploying Energy Efficient Technologies in Industries and Establishments) and scaling ESCO (Energy Service Company) models can provide the 63.3 million Indian MSMEs with the financial depth and technical support needed for motor and boiler upgrades.
Securing Critical Mineral Supply: Aligning with the Nuclear Energy Mission, securing long-term international agreements for minerals like Nickel and Lithium is essential for the domestic manufacture of industrial-scale batteries and electrolysers.
Follow the full report here: NITI Aayog: Scenarios Towards Viksit Bharat and Net Zero - Industry