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. Electricity demand across the sector has steadily increased since 1990, and reached 42% in 2019. 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%. 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. 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., India could further explore the scope of mitigation measures in the iron and steel industries, in particular the use of green hydrogen.,