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Bengaluru, 28 June 2024: The Micro, Small and Medium Enterprises (MSMEs) contribute to 31% of India’s gross domestic product, almost 50% of exports, and 57% of all employment in manufacturing sectors, making them crucial to the economy. However, they are highly energy- and emission-intensive. MSMEs are also vulnerable to the surge in energy prices and have rather high energy costs as a share of their total manufacturing costs. Thus, decarbonisation of MSMEs is necessary to reduce fossil fuel dependency in the industrial sector and to propel the clean energy transition. While several large-scale industries have implemented energy efficiency and conservation measures, MSME industries are lagging in this aspect.

The Center for Study of Science, Technology and Policy (CSTEP) has published a report titled ‘Scope for Deep Decarbonisation in the MSME Manufacturing Sector’. The 2-year scoping study evaluated the potential for decarbonisation in the MSME manufacturing sectors and for mitigating greenhouse gas (GHG) emissions. Seven clusters, covering an aggregate of 66 MSME units, from five energy- and emission-intensive sectors were included. A detailed techno-economic analysis was conducted to evaluate the feasibility of decarbonisation technologies (e.g. process electrification and fuel switching).

The study found that the implementation of a combination of the recommended Energy Efficiency (EE) measures, Renewable Energy (RE) solutions, and Advanced Technologies could result in potential savings in emissions of 1,36,581 tCO₂, energy usage of 3,85,383 GJ, and energy costs of INR 37 crore. Of note, except Asansol–Chirkunda clusters, all clusters experienced decreased energy costs.

Full research report and seven cluster reports: Link

Policy brief: Link