Responsible for a significant portion of industrial emissions, the Indian chemical sector is now under intense pressure to innovate and transform its operations to align with the global climate agenda. The journey to net-zero is complex, but it is essential for ensuring a sustainable future.

In such a backdrop, the leading experts spoke at the E-conference on ‘Navigating the Path to Net-zero in the Chemicals Industry’ on July 26, 2024 organized by Indian Chemical News (ICN), in association with Schneider Electric. The discussion was moderated by Pravin Prashant, Executive Editor, Indian Chemical News who shared an overview and emphasized the need for a reality check.

“The major trends that are going to impact the net zero mission is the sense of timing that must be understood well. Apart from that the regulatory requirements such as Carbon Border Adjustment Mechanism (CBAM), a form of carbon tax to avoid ‘Carbon Leakage’ as perceived by the European Union and is applicable on Steel, Aluminium and Cement import in to EU from India, China and other countries. Soon, it may also be applicable to Chemicals. CBAM is going to be effective from 2026. The Govt. of India has protested and opposed CBAM as this will affect the competitiveness of the Indian industry and has challenged it at WTO,” said Girish Satarkar, Executive Director, Deepak Nitrite Limited.

Satarkar further added that the concept of carbon tax is already gaining traction though I believe the carbon offsetting is not exactly net zero. “The second trend will be competitive considerations because no organization would like to be left behind if sustainability is not addressed here and now. This will also create competitive advantage for the corporations in terms of products and customer influence. The other impact trends are the international guidelines, from Kyoto Protocol to Paris COP 2021 agreement. The pressure is building from top down and thus it has become a priority for the companies to adopt sustainability and green options besides declaring their targets to sustain and enhance the stakeholders and investors confidence in them,” he added.

“The regulatory pressure is not just limited to SEBAM but the Business Responsibility and Sustainability Report (BRSR) that is mandatory for top 1000 companies. Their governance is guided by the net zero in all the actions they are taking. Organizations are monitoring their own progress and all their specific goals through BRSR reporting. In the times to come, reasonable assurances are also part of this reporting by the top 150 companies. This is something that is inevitable for the chemical companies to avoid. In terms of biomass or low carbon renewable technologies, these are creating opportunities and AAA challenges i.e ' Availability, Accessibility and Affordability' which needs to be tackled.  Moreover, there are technologies such as Internet of Things (IoT) and Artifical Intelligence (AI) that need to be leveraged. Green products are to be encouraged so that we achieve lower carbon emissions. Electrification is something that has to be looked into and so is the adoption of green hydrogen,” said K. K. Sharma, Whole Whole Time Director – EHS, DCM Shriram Limited.

“From the investor perspective, they are pressurizing the industry to adopt more and more sustainable processes and procedures. They are asking a lot of questions including sustainability goals, progress and also the TCFD report. There are a lot of demands from the investors and now companies are looking at sustainability and ESG. These days even the talent that we are recruiting are also enthusiastic about joining companies with sustainability focus. I was surprised to find that while interviewing candidates they were aware about sustainability reports. Talent attraction these days is also getting linked to sustainability reports. Now at the global stage, there is a growing trend of looking at your sustainability goals and progress towards it. Unless and until we have a sustainable feedstock and procurement system, it is important to reduce the carbon footprint. We have to prove that we are not just economical but we are also moving forward on decarbonization. There is pressure mounting on Indian companies and it is good to see that they are coming out with public commitments including UPL where we have declared that we will achieve carbon neutrality by 2040,” said Dr Mritunjay Chaubey, Global Vice President – Environment & Sustainability, UPL Limited.

Exhorting the companies to implement sustainability practices, Venkat Garimella, Vice President - Strategy & Sustainability, Schneider Electric India said, “If you are not sustainable, investors won’t invest in you; prospective candidates might not join you; and potential customers might not buy from you. As a company that is helping the chemical industry achieve sustainability targets, we are proud to say that we walk the talk ourselves. In terms of deploying technologies and changing mindsets, we have reduced the energy consumption by 52% upto 2022; 57% reduction in water consumption; 50% waste reduction and at SCOPE 1 at 67%. For any ROI negotiations, these reductions are a great factor. This is exactly what we did. Last year one of our factories in Hyderabad was recognized as a Lighthouse by the World Economic Forum. There are just two WEF Lighthouses and we are proud to be one of them. We will be happy to host the players in the chemical industry who want to visit our facility.”

Sharing insights on the technologies offered by his company, Gianluca Merola, Global Business Development for Specialty Chemicals, Schneider Electric said, “We are a global industrial technology leader in electrification, automation and digitization. We have more than one million partners across the globe and we champion the ESG cause. In terms of chemical industry offerings, we offer electrical and automation technologies that converge with software, services and sustainability as enablers for rapid acceleration. While the attention remains fixated on wars, energy shortages and social issues, the climate-related impacts continue to remain an enormous challenge to deal with. Pollution, climate change and biodiversity are the triple planetary crisis before all of us. We can address it through natural products, reuse and recycling and energy transition. Our Electricity 4.0 offers both electric and digital solutions.”

Talking about the challenges and solutions, Rohit Chashta, Sustainability Business Leader, Schneider Electric India said, "Climate urgency demands that temperature rise be kept under 1.5 degree Celsius. In India, 46% of CO2 emissions are from industries including 28% from buildings. We see 10% emission come from the chemical segment including process linked GHG emissions. These come indirectly from energy, feedstock, and directly from chemical production. To tackle the energy demand, one has to look at digital energy efficiency, design and build for low carbon, circularity and electrification. Currently, chemical industry has 16% share of electrification. If we want to achieve decarbonization in the next 25-30, we need to reach 80% of electrification by 2050. For the Indian chemicals industry to become more sustainable and decarbonized, we are working with organizations with an end to end integrated approach. We help them strategize, digitize and decarbonize.”

The path to net-zero for the chemicals industry is fraught with challenges, but it is also filled with opportunities. Companies that lead the way in sustainability will not only mitigate their environmental impact but also gain a competitive edge in a market that increasingly values green credentials. Innovation, collaboration, and commitment to sustainable practices are the cornerstones of this transformation.