Global Collaborations and Partnerships for accelerating Industry transitions in India

10 Nov 2022 10 Nov 2022
Taruna Idnani
Auditorium B, Business Pavilion for Climate Leadership, We Mean Business Pavilion, Blue Zone at COP27

COP 27 Global collaborations and partnerships

On 10th November 2022 | 13:30 Hrs - 14:30 Hrs EET

The success of implementation of NDC commitments requires inclusive partnerships — at the global, regional, national, and local levels. Climate leadership of Indian businesses along with global partnerships and collaborations would play a key role in accelerating the pace of climate action. India has joined the First Movers Coalition, a global initiative aimed at decarbonizing the heavy industry and long-distance transport sectors. It is, therefore, vital to discuss the pathways to decarbonize these sectors to ensure that India stays on track to meet its emission targets whilst ensuring economic growth.

On the Science Day at COP 27; deliberations delved into potential pathways and role of global partnerships to accelerate India's aspiration for building a low carbon economy. The session drew upon perspectives from Indian business leaders, government representatives, the global community and civil society.

Summary of Discussions

In her opening remarks, Dr Vibha Dhawan, Director General - TERI, spoke about the need to nurture partnerships and collaborations that aid knowledge sharing and help speed up climate action. “Even though India’s per capita emissions remain low, however, the large size of the population and future development of the country present challenges and opportunities for climate action.” Some of the challenges include financing climate commitments; while the opportunities presented include partnering with like-minded countries to fine tune, and research and develop cleaner alternatives that help large industries and small and medium enterprises in their decarbonization drives.

Mr. Mahendra Singhi, CEO & MD, Dalmia Cement (Bharat) Limited highlighted the importance of collaboration in just transition, energy transition, technology transition and a just-leader transition, meaning the importance of nurturing young leaders. Importance of creating collaborations include enhancing the lack of resources such as finance and envisioning a clear roadmap for the future. Mr. Singhi cited examples of initiatives such as LeadIT and the creation of a sectoral decarbonization-based approaches as part of a decarbonization roadmap. To create low carbon products, there has to be a two-way approach wherein the demand for the green product is stable along with sustained availability of requisite technology to manufacture such green products. Mr. Singhi emphasized that how technology comes to an emerging market like India is dependent on meaningful global collaborations – a dialogue which started at COP26. He also pointed out that creation of demonstration projects will be key to the scaling up of initiatives in the emerging economies and in India. Herein, Mr. Singhi reiterated the importance of creating a roadmap for the $100 billion climate fund and the means to have access to such funds. Sustainable plantation leveraging the wasteland, more policy advocacy and collaboration with government and global organizations will be critical in realizing implementable nature-based solutions. Speaking on the importance of hydrogen, Mr. Singhi reiterated that collaboration in green hydrogen will help create a cleaner climate and protect the younger generation. Mr. Singhi, further, echoed the COP27 theme of “Togetherness for implementation” – and urged that speed is required to realize the vision.

Setting the context for the moderated panel, Mr. RR Rashmi, Distinguished Fellow at TERI, highlighted the importance of differentiating between the near term and long-term targets India has set for itself.

Coal remains part of the energy mix in India’s energy transitions pathways till 2050, which adds to the worry. India has two types of targets viz. till 2030 and till 2070. For 2030, the targets are intensity targets – on which we are making good progress bring down emission intensity by 45%; similarly, we have been able to create large capacity of installed capacity of renewable energy which is 42% of India’s total electricity production – exceeding the 2030 target that India has set for itself.

The real problem is net zero target by 2070 or an advanced timeframe in which the technologies are made available. Coal transition alone is not an answer to this entire problem. Instead, the entire energy system should make a transition together. The discussions in an earlier session ‘Accelerating Actions towards fulfilling India’s Climate Ambitions’ organized by TERI and BCG pointed out several recommendations. These recommendations were that:

  • 1. We will need to develop alternative fuels. These alternate fuels are green hydrogen, biofuels, ethanol, methanol (through coal methanation process).
  • 2. Circularity to be introduced at a large scale in the industries
  • 3. Offsets. Because despite all the policy measures undertaken, there will be a lot of emissions left in the energy system. And to overcome that we will need to create a CCS or CCUS or some kind of carbon sink. This can happen only with the help of carbon markets.

Mr. Rashmi pointed out that there are several specific areas where global collaborations can help. While numerous technologies exist, the major challenged that is being faced is the availability of systems and global collaborations at the right scale. Mr. Rashmi suggested areas where we can truly collaborate with global stakeholders:

  • 1. Development of green hydrogen. Here the challenge is that at the moment it is very expensive. Green hydrogen for the entire energy system is very expensive. Collaboration at the global level on technology innovation will be crucial to bring the costs down.
  • 2. India-Sweden coalition LeadIT – this should be strengthened to ensure that technology development is fast tracked, innovation is available to everyone, and demonstration projects are set up as quickly as possible.
  • 3. Carbon markets. Access to carbon finance from developed countries should be enabled. The voluntary markets are already functioning, but we now need to ensure that the finance available for mitigation in the voluntary market, is also available at the same level for the compliance market. This compliance market is under development in many developed countries including India. The Government of India is working on the guidelines for the domestic carbon market – which will act as the major framework through which trading can take place. Since Scope 3 emissions are quite large for industries to mitigate on their own, they need to resort to carbon markets and this would need collaboration at the global level.
  • 4. Goal of net zero and ambitious NDCs by 2030. It will be difficult to achieve these goals if we do not have the right financial architecture in place. This architecture does not necessarily limit to finance coming from budgets of governments; instead, we need to create a collaborative architecture at global level of financing where the international capital that is available goes into the right areas and at affordable costs. Private sector financing is not going into areas relevant to India’s NDCs and net zero goals. This is happening because the investors see a risk in these areas. How do we ensure a financial system which covers these risks partly at the domestic level and largely at global levels is something we need to look at? There is a need to establish a financial architecture of that distributes and mitigates risk arising out of international capital, equally. Costs will be much less if this financing comes from private sector than the public budgets or the government. We need innovative models of risk sharing and risk mitigation in the global financial system.

Moving forward the panel discussion moderated by Ms. Helen Clarkson, CEO, Climate Group, highlighted the importance that business climate leadership plays in accelerating climate action.

Mr. Jingdong Hua, Vice President - International Sustainability Standards Board, stated that global collaborations require global solutions. From a standard making perspective, it is necessary to transform the myriad disclosure standards into a uniform global baseline of climate and sustainability related financial reporting. Once discussions around the standards are standardized, these will help bring comparability, accountability, and transparency to company disclosures.

Speaking on the importance of data Ms. Sue Duke, Vice President and Global head of Public Policy and Economic Graph - LinkedIn, highlighted that LinkedIn’s database of labour market activity helps identify trends and developments in the green labour market, and are leveraged to help empower people upskill, especially in the green labour market. Some of the insights that have recently been released by LinkedIn include, first, the increase in the stock of green talent which has risen over 40% in the past 5 years across traditional and non-traditional sectors.

Second, in the next five years demand will outstrip the supply of workforce. Third, just transitions in the green labour market is necessary to bridge the inequities erupting in the market where people with an educational degree, and men rather women are better placed to leverage the opportunities present in the green labour market.

Mr. Peter Levi, Industry Lead, Energy Technology and Policy Division - International Energy Agency, laid out three buckets or policies that are ingredients of a transition in the industrial sector. These include providing high temperature heat required in industrial processes and overcoming high level of emissions prevalent in these processes, and taking stock of current assets which are capital intensive and long lived.

His response in addressing the aforementioned challenges include a push mechanism where investments can be diverted to the innovative technologies that help address these challenges. On the pull side, these include collaborating to conclude the right definitions for initiatives such as steel zero. And the third is the need to level the playing field by ensuring that policies devised in one part of the world are reflective of the dynamics of another countries.

Mr. E R Raj Narayanan, Chief Manufacturing Officer and Business Head -UltraTech Cement Limited, shared the framework on which decarbonization can be aided which includes – technology, product, circularity, government support and financial support. “The line-of-sight technologies can only take us thus far. To reach net zero will require significant collaborations across different partners.”

Dr Paravastu Rambabu, Advisor and Chief Sustainability Officer - Greenko, also spoke about five elements of decarbonization in India. These include electrification, and re-electrification of industrial processes via renewable energy, the development of zero carbon processes, improving material circularity in the economy, and via carbon capture, usage and storage.

“There is a positive story about decarbonization of the energy sector in India, wherein the reduced costs of renewable sources, and the development of pumped hydel storage present opportunities to create a 100 GW of energy storage capacity by 2024 – 25”. There exists an architecture on storage obligations in India, and energy storage as a service.

“There is an excitement in India about the architecture that can produce green hydrogen at costs lower than in other countries”. India has signed certain offtake contracts with Europe in supplying green ammonia. There is a need for India to commercialize already proven technologies and undertake new innovations for achieving the beyond 2030 decarbonization commitments.

Key Recommendations

  • 1. The deliberations echoed the theme of COP 27 on Togetherness for Implementation. Global collaborations and partnerships would ensure that technology development is fast tracked, innovation is available to everyone, and demonstration projects are set up as quickly as possible.
  • 2. The panel reiterated the significance of just transitions. Just transitions in the green labour market is necessary to bridge the inequities erupting in the market.
  • 3. It’s vital for the success of the low-carbon transition that the heavy emitting sectors are setting ambitious targets and following them up with real and measurable action.
  • 4. Net-zero commitment of India will require collaborations and partnerships across different sectors. There is a need for India to commercialize already proven technologies and undertake new innovations for achieving the beyond 2030 decarbonization commitments.
Agenda_0.pdf958.51 KB
Energy transitions
Power utilities/industries
Renewable energy industries