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India Sectors

What is Indiaʼs pathway to limit global warming to 1.5°C?

The industrial sector accounts for the largest share of total primary energy demand, at 38% in 2019, growing at an annual rate of 5% during the last 10 years.5 Electricity demand across the sector has steadily increased since 1990, and reached 42% in 2019.5 1.5°C compatible pathways show the share of electricity in industrial energy mix increasing between 30-31% by 2030, and 46-71% by 2050 from the 2019 level of 19%. Additionally, all scenarios show the sector’s direct CO₂ emissions declining rapidly, between 59-60% by 2030, and 88-96% by 2050, from a 2019 level. This decline is mostly driven by an increased share of renewables in the energy mix and energy efficiency measures.

Currently, primary energy demand in industry is dominated by fossil fuels (58% in 2019), comprising of coal (35%) and oil (19%). All analysed 1.5°C compatible scenarios (except one) peak fossil energy demand by 2020, and show a declining trend thereafter to a 4-22% share by 2050.

In 2019, industrial process emissions accounted for 8% of total emissions (excl. LULUCF) (270 MtCO₂e/yr in 2019), and have been increasing since 1990 at an annual rate of 4%.18 The analysed 1.5°C pathways demonstrate a declining trend in process emissions from 2025 reaching -64 to 41 MtCO₂e/yr by 2050.

Energy efficiency measures in industries across India play a significant role in reducing energy consumption of this sector. One of the main energy efficiency instruments is the Perform, Achieve and Trade (PAT) Mechanism.19 Two cycles of PAT between 2012- 2019 resulted in total savings of approximately 92 MtCO₂e. Other energy efficiency initiatives and electrification in the Micro, Small and Medium Enterprises (MSME) sector have led to total avoided emissions of 0.124 MtCO₂ in 2018-19.20,21 India could further explore the scope of mitigation measures in the iron and steel industries, in particular the use of green hydrogen.22,23

1 Climate Action Tracker. India. September 2021 update. Climate Action Tracker. (2021).

2 IRENA. Renewable Power Generation Costs in 2020. (2021).

3 Climate Transparency. Climate Transparency Report. (2020).

4 Climate Action Tracker. Data Portal. (2017).

5 IEA. India. IEA. (2020).

6 Observatory of Economic Complexity. India. Observatory of Economic Complexity (OEC). (2019).

7 Central Electricity Authority. All India Installed Capacity. (2021).

8 Central Electricity Authority. National Electricity Plan. (2018).

9 Climate Action Tracker. India. September 2020 update. Climate Action Tracker. (2020).

10 Kuramochi, T. et al. Ten key short-term sectoral benchmarks to limit warming to 1.5°C. Clim. Policy (2017).

11 NITI Aayog. Ethanol Blending in India 2020-25 Roadmap for Report of the Expert Committee. (2021).

12 Kukreti, I. Union Budget 2021-22: India to launch Hydrogen Energy Mission. (2021).

13 IEA. World Energy Balances 2019. (2021).

14 IEA. CO2 Emissions Statistics. (2019).

15 CEA. Report on Optimal Generation Capacity Mix for 2029-30. (2020).

16 Central Electricity Authority. Annual Generation Report. (2020).

17 Bureau of Energy Efficiency. ECBC Residential. (2020).

18 PIK. The PRIMAP-hist national historical emissions time series. (2021).

19 Dasgupta, S., Van Der Salm, F. & Roy, J. Designing PAT as a Climate Policy in India: Issues Learnt from EU-ETS. Nature, Econ. Soc. Underst. Linkages 315–328 (2016) doi:10.1007/978-81-322-2404-4_16.

20 BEE. PAT scheme (Perform, Achieve and Trade scheme). (2018).

21 MoEFCC. India Third Biennial Update Report to The United Nations Framework Convention on Climate Change. (2021).

22 TERI. Green steel through hydrogen direct reduction. (2021).

23 Bhaskar, A., Assadi, M. & Somehsaraei, H. N. Decarbonization of the iron and steel industry with direct reduction of iron ore with green hydrogen. Energies 13, 1–23 (2020).

24 Ministry of Road Transport and Highways. Notification G.S.R. 749(E). (2018).

25 Clean Energy Ministerial. EV30@30 campaign. Clean Energy Ministerial. (2019).

26 Carpenter, S. India’s Plan To Turn 200 Million Vehicles Electric In Six Years. Forbes. (2019).

27 Economic Times. Bubble alert: India’s electric two wheeler industry maybe headed towards a glut by 2026, Auto News, ET Auto.

28 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches.

29 The generation share was translated to approximate capacity shares based on an assumption of a similar split across technologies as the 175 GW target.

30 Analysed pathways assume the development of negative emissions technologies – BECCS – thus the year of zero emissions provided might be reached earlier than when 100% of the power mix is based from renewables and represent a ‘net zero emissions’ year.

31 Analysed pathways assume the development of negative emissions technologies – BECCS – thus the year of zero emissions provided might be reached earlier than when 100% of the power mix is based from renewables and represent a ‘net zero emissions’ year.

Indiaʼs energy mix in the industry sector

petajoule per year

SSP1 Low CDR reliance
201920302040205020 00030 000
SSP1 High CDR reliance
201920302040205020 00030 000
Low energy demand
201920302040205020 00030 000
High energy demand - Low CDR reliance
201920302040205020 00030 000
  • Natural gas
  • Coal
  • Oil and e-fuels
  • Biofuel
  • Biogas
  • Biomass
  • Hydrogen
  • Electricity
  • Heat

Indiaʼs industry sector direct CO₂ emissions (of energy demand)


  • Historical emissions
  • SSP1 High CDR reliance
  • SSP1 Low CDR reliance
  • High energy demand - Low CDR reliance
  • Low energy demand

Indiaʼs GHG emissions from industrial processes


  • SSP1 Low CDR reliance
  • SSP1 High CDR reliance
  • High energy demand - Low CDR reliance
  • Historical emissions

1.5°C compatible industry sector benchmarks

Direct CO₂ emissions, direct electrification rates, and combined shares of electricity, hydrogen and biomass from illustrative 1.5°C pathways for India

Decarbonised industry sector by
Direct CO₂ emissions
231 to 236
17 to 150
24 to 67
2037 to 2046
Relative to reference year in %
−64 to −63%
−97 to −76%
−96 to −89%
Share of electricity
30 to 31
39 to 55
47 to 72
Share of electricity, hydrogren and biomass
57 to 62
72 to 86
79 to 95