DECARBONIZING MSME:
ECONOMY
News: Recently,
a study on decarbonisation of 7 MSME clusters (Alathur, Asansol-Chirkunda,
Bengaluru, Delhi-NCR, Coimbatore, Ludhiana and Tiruppur) has revealed that
adopting renewable energy solutions and energy efficient measures could lead to
significant annual savings and reduction in emissions of CO2.
It covered sectors such as pharmaceuticals,
refractories, aluminium die-casting, bakeries and textiles units across these
clusters.
Whats in the news?
'Decarbonisation' refers to the process of reducing
'carbon intensity', lowering the amount of greenhouse gas emissions produced by
the burning of fossil fuels.
Key Findings
MSME
Energy Consumption:
Approximately 31% of MSMEs operate in the manufacturing sector, contributing
20%-25% of the country's industrial energy consumption. Over 80% of this energy
is utilized for thermal processes, such as heating in boilers and furnaces.
Initial
Investment & Cost Saving: Implementing energy-efficient measures and
renewable energy solutions in seven key MSME clusters would require an
investment of Rs 90 crore, leading to annual cost savings of Rs 37 crore.
Emission
Reduction:
Decarbonizing these sectors could result in a reduction of 136,581 tonnes of
CO2 emissions annually.
Recommendations
- Improve Access to Finance:
- Offer
affordable, collateral-free financing for MSMEs by reviewing loan
eligibility.
- Build
capacity for financial institutions.
- Explore
carbon financing options.
- Tailor MSME Policies:
- Set
emission reduction targets.
- Support
energy audits, research and development, pilot projects, and financing
for energy efficiency and renewable energy.
- Develop Biofuel Ecosystem:
- Expand
biomass policies.
- Include
biodiesel in government schemes.
- Facilitate
the sale of bio-CNG.
- Increase Renewable Energy
Use:
- Promote
rooftop solar and open-access systems.
- Rationalize
charges and aggregate demand.
- Utilize
cluster development schemes.
- Regulatory Incentives:
- Provide
incentives for MSMEs to switch to cleaner fuels.
- Simplify
the adoption of clean fuels.
- Monitor
Scope 3 emissions (indirect emissions that are a consequence of the
company’s activities, upstream and downstream of the manufacturing site).
Source: https://indianexpress.com/article/india/decarbonising-seven-key-msme-clusters-could-annually-save-rs-37-cr-study-9441279/