Carbon Neutrality — India: The path to ‘net zero’

By Somit Dasgupta & Diya Dasgupta

On January 11, 2021, the Executive Director of the International Energy Agency (IEA) issued a statement announcing the release of a roadmap to reach net zero by 2050. While the IEA aims at providing an all-encompassing plan, it may not be able to fully capture country-specific issues, especially since countries have different emission levels, different levels of renewable generation and, above all, different levels of economic development. So, one can’t adopt a one-size-fits-all approach. Incidentally, more than 100 countries have already declared their goal of becoming net zero emitters by 2050 and, separately, some cities/corporations have also announced the same intent.

In addition, some estimates indicate that more than 1,000 corporations have announced becoming net zero by 2050 and many more are expected to follow suit prior to COP26, to be held in Glasgow towards the end of 2021. In fact, some of the more enterprising corporations have decided to reduce their ‘legacy emissions’ as well, which involves getting rid of past cumulative emissions that the company(ies) may have emitted.

Now, what is net zero? While there is no standard definition of net zero, the broad understanding is that it involves a combination of approaches targeted at reducing and removing emissions. The idea is to maintain a balance between greenhouse gas (GHG) emissions produced and removed from the atmosphere. The fact that more than 100 countries have announced their net zero ambitions puts some kind of pressure on India, especially when China too has declared that it would become a net zero economy by 2060. This is not to say that all countries that have declared net zero ambitions are actually working towards it.

Under the Paris Agreement, all countries were to submit their revised Intended Nationally Determined Contributions (INDCs) in 2020, bringing in stiffer targets than what they had set out for themselves in 2015. It is reported that about 71 countries have already submitted their revised INDCs (January 2021), but only a few of them have introduced stiffer targets, though not necessarily net zero complaint. India and a 100 other signatories are yet to submit their revised INDCs.

The moot point is whether India is in a position to declare that it too would turn net zero by the middle of this century or a few years after that. To understand that, one has to first familiarise oneself with the macro picture as far as emissions are concerned. To do so, one can rely on the data available in the Second Biennial Update Report (BUR) prepared by India in 2018, giving data till 2014. No doubt, the data is old, though it can still be relied on given the fact that in terms of ratios nothing much would have changed. The BUR mentions that India emitted about 1.99 gigatonnes (GT) of carbon dioxide (CO2) in 2014.

The largest share of CO2 emissions is accounted for by electricity production (54%), followed by manufacturing industries and construction (25%) and transport (12%). While India emitted 1.99 GT of CO2 in 2014, it emitted other GHGs as well like methane, nitrous oxide and fluorinated gases. The combined effect of all GHGs was equivalent to having about 2.6 GT of CO2 (as against pure CO2 of 1.99 GT) in the atmosphere. Though the quantum of other gases compared to CO2 is minimal, they are far more lethal in terms of their capacity to make atmospheric temperature rise. Going by the data given in the BUR (2014), though the quantum of methane in GHG (in gigagrams) is only about 1% (where CO2 is 98%), it is 21 times more potent than CO2 when it comes to global warming.

The CO2 emissions that were 1.99 GT in 2014 are estimated at about 2.3 GT in 2019 (IEA). Even if one focuses only on CO2, India will have to find ways and means to absorb this high dose of CO2, which is not feasible at present. In 2014, the total sink that was available was only about 0.3 GT. Sinks are processes that absorb CO2, the plant kingdom being the best example. Considering the fact that coal still accounts for a little more than 70% of our conventional power generation and also keeping in mind that our peak demand occurs at 8:00 pm when there is no solar power, we have no alternative but to continue with coal-based generation for many years to come. Even batteries, though their capital costs have gone down by 80% during the last 10 years, cannot provide economically-viable storage for more than four hours. Similarly, in the transport sector, 90% is accounted for by road transport, which means burning of fossil fuels. Besides, our penetration of electric vehicles is minuscule.

The only way India can turn net zero is by removing CO2 using carbon capture and storage (CCS) technology. CCS refers to capturing CO2 from point sources, transporting it to preselected locations and storing it underground. CCS technology is nothing new and has been known since 1938. The first plant came about in the 1970s in the US, which had a capacity of removing 1.4 million tonnes (MT) of CO2 per year. Today, there are about 19 major CCS plants (including two plants in the power sector, though one has since been mothballed being economically unviable) and their combined capacity is about 40 MT of CO2 per year.

CCS is an extremely expensive technology and it has a host of other issues like finding potential reservoirs for storage having stable geological environment, low seismic activity, etc. Given the high costs involved, there is practically no demand for CCS technology. Some reduction in capital costs, however, has been observed as mentioned in the Global CCS Report (2019), which states that the cost of capturing carbon has reduced from $100 per tonne of CO2 at the Boundary Dam facility (Canada) to $65 per tonne of CO2 at the Petra Nova facility (the US) over a span of three years.

The story of CCS is primarily a chicken-and-egg story. Developers of the technology will only venture into the field when there is sufficient demand, and the flip side is that demand will only grow when costs are low. It is only the government that can break this impasse by investing in CCS technology, at least for a few demonstration units. The government of India has a large presence in the power sector, which in any case accounts for about 54% of the emissions and, therefore, it is here where the action should originate.

The government should identify centrally-owned generating stations that still have sufficient life and set up CCS units in these plants. Other emitting sectors, such as industrial, transport and agricultural, are dominated by private enterprise that, of course, don’t have the means to invest in this technology. Initial government investment may trigger a fall in capital costs, which may lead to further adoption of the technology. Finally, it would not be out of place to mention that the best way to promote this technology would be to make it a part-and-parcel of the INDCs, which would have guaranteed quick percolation at reduced cost due to economies of scale.

Somit is former member, CEA, and senior visiting fellow, ICRIER; Diya is research assistant, ICRIER