A Guide to Help India’s Industry Overcome the Decarbonisation Challenge
As industrial leaders increasingly focus on decarbonisation, it has become evident that energy efficiency is an aspect that is often overlooked. But the potential gains from using energy more efficiently could be significant, as it could save 11% of the global carbon emissions forecast for 2030. That’s why the Energy Efficiency Movement (EEM) has published “The Case for Industrial Energy Efficiency,” a guide with ten actions that could deliver financial savings of over $437 billion across global industrial enterprises.
The Case for Industrial Energy Efficiency
“The Case for Industrial Energy Efficiency” builds on the Industrial Energy Efficiency Playbook that EEM published in 2022. The guide presents a roadmap to energy efficiency for industrial companies that is practical and cost-effective. The guide provides ten actions that range from the simple and obvious to the complex and ambitious. These actions include:
- Conducting an energy audit: This will help identify areas where energy is being wasted, and where efficiencies can be made.
- Sizing and powering machinery correctly: An often-overlooked issue is ensuring that the machinery used in industries is sized and powered correctly.
- Using intelligent building management systems: Integrating the building management systems based on Artificial Intelligence/Machine Learning to improve energy utilization and reduce GHG emissions
- Moving data storage and processing to the cloud: This measure is one of the complex and ambitious ones, which could result in significant cost savings.
The guide is informed by expert advice from top industrial players, including ABB, Alfa Laval, and Microsoft. The IEA also provided expert advice.
Ways to Improve Efficiency Today
The actions outlined in The Case for Industrial Energy Efficiency are measures that can be implemented today and will deliver returns almost immediately. In fact, upgrading motor-driven systems to energy-efficient IE3 or IE4 models will result in significant financial savings for industrial players. The need for this is highlighted by the fact that only 15% of motors produced in India are energy-efficient, while 70% of electricity consumed by the industry is from motor-driven systems. EEM modeling shows that the global industry could save almost $72 billion a year from more efficient motors.
Higher efficiency motors aren’t merely a preference; they are a collective responsibility towards industries, the environment, and India’s sustainable future.
Three Key Actions for Energy Efficiency
The Case for Industrial Energy Efficiency outlines three actions that account for around 70% of the energy efficiency savings available to the global industry by 2030. These actions include:
- Connecting assets: By connecting assets, factories can constantly monitor their energy consumption, which will help identify areas of improvements which will eventually save energy and cost.
- Installing heat pumps: Heat from natural sources can be extracted from the environment and used for industrial processes, thus reducing energy consumption costs.
- Creating smarter buildings: This can be done by improving insulation, installing more efficient heating and cooling systems, and intelligent building management systems. New buildings can be built with sustainable energy solutions to avoid energy waste in the future.
EEM’s guide contains practical and cost-effective solutions that companies can implement today to address the decarbonisation challenge.
Timely Guide to Address New Regulatory Environment
India’s industrial leaders face a daunting task over the next couple of decades. They need to sustain their growth while undergoing deep decarbonisation transforms to keep up with industrial growth that hit 10.3% annually in August 2023. Industrial players are increasingly having to consider carbon pricing as part of production as lawmakers mull emissions reduction targets for industries such as cement, petrochemicals, iron and steel, and pulp and paper. The national carbon market, set to launch in 2025, will make sustainability an even more significant issue for industrial giants.
Already, seven export sectors, including steel, cement, and hydrocarbons, have to report on their emissions to comply with the European Union’s carbon border adjustment mechanism, which will result in a tax of up to 35% on imports to the EU from January 2026. This creates a lose-lose situation for Indian industries as they will either make heavy investments in decarbonisation or face steep taxes on export goods, which will hit profits.
However, the companies can save money and emissions at the same time by saving energy. Accessing these benefits is not hard; it starts with becoming aware of how much energy efficiency can be achieved.
A Managerial Voice for the Energy Efficiency Movement
Enabling this awareness and promoting energy efficiency practices at the industry and policy-making levels is exactly what the Energy Efficiency Movement is all about. The movement brings together over 400 like-minded global stakeholders, including major companies such as Accenture, DHL, Microsoft, and Tata Steel, to innovate and act for a more energy-efficient world. Mike Umiker is the managing director of the Energy Efficiency Movement.
Conclusion
India’s industrial leaders must address the decarbonisation challenge to avoid significant financial losses. The solution lies in adopting a practical and effective energy efficiency plan. The Energy Efficiency Movement’s “The Case for Industrial Energy Efficiency” provides a roadmap for creating energy-efficient factories, including actions that can be implemented with immediate effect. The guide provides Indian industries with the means to reduce emissions and save money, addressing sustainability issues while maintaining healthy bottom lines.
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