Key Messages

Small industries or micro, small, and medium enterprises (MSMEs) are a crucial sector in India’s development. They have a large carbon footprint, partly because of the nature of energy consumption, with over 80% of the energy consumed being required for thermal processes to produce heat (e.g. in boilers and furnaces). These thermal energy demands have traditionally been met through fossil fuel sources (such as coal, natural gas, and pet coke), making MSMEs a hard-to-abate sector. Thus, emission reduction in the MSME sector is necessary for achieving India’s ambitious net-zero targets by 2070.

Energy efficiency (EE) technologies are widely accepted as energy-saving measures in industries. Research studies and energy audits are regularly conducted in MSME clusters to identify measures to reduce waste energy consumption. However, these EE measures have certain technical limitations in terms of emission reduction. Thus, deep decarbonisation measures for the MSME manufacturing sector need to be further explored.

The Center for Study of Science, Technology and Policy (CSTEP) conducted a 2-year study to assess the technical feasibility and financial viability of deep decarbonisation technologies in selected MSME clusters, covering a range of sectors and geographies across the country. The study informs specific policy recommendations to support the decarbonisation of this sector. This includes tailoring state-wise MSME policies to include emission reduction targets and a roadmap, development of a reliable ecosystem for the production and supply of biofuels, promoting the use of renewables such as RTPV and open-access systems, and providing regulatory incentives from governments and clients to nudge MSMEs towards fuel switching.

Click here to read the full report and cluster-based reports.

Please find the Press Release here.