Downsizing Carbon Footprint
CSTEP study evaluates the potential for decarbonisation in the MSME manufacturing sectors.
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. Decarbonisation of MSMEs is, therefore, necessary to reduce fossil-fuel dependency in the industrial sector and propel clean energy transition. While several large-scale industries have implemented energy efficiency and conservation measures, MSME industries are lagging.
CSTEP conducted a two-year study to assess the potential for decarbonisation in the MSME manufacturing sectors and mitigating greenhouse gas emissions. Seven clusters, with an aggregate of 66 MSME units, from five energy- and emission-intensive sectors were included, and a detailed techno-economic analysis was conducted.
The study found that the implementation of a combination of the recommended energy efficiency measures, renewable energy 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 with an initial investment of INR 90 crore. The study highlights the necessity to devise a specific decarbonisation roadmap tailored for each location and informs specific policy recommendations to support the decarbonisation of this sector.
The findings of this study have been documented in a full-length report titled ‘Scope for Deep Decarbonisation in the MSME Manufacturing Sector’, which comprehensively documents research data, study gaps, methodology, and major takeaways. CSTEP also published one policy brief to highlight policy recommendations and seven cluster-wise reports with cluster-specific details on the recommended measures and technoeconomic assessments.
