Background
Climate change: The UNEP has warned that the world could cross the 1.5°C warming threshold in the coming years.
Infrastructure expansion: India’s building stock, steel production, cement output and electricity demand are expected to increase significantly.
Development opportunity: A large share of India’s future infrastructure is yet to be built, providing an opportunity to adopt energy-efficient and low-carbon technologies from the beginning.
Global context: Advanced economies already have much of their infrastructure in place, making decarbonisation more dependent on retrofitting existing assets.
Policy framework: India has introduced energy-efficiency building codes, a green-steel taxonomy and the Carbon Credit Trading Scheme (CCTS).
Features
Buildings and energy efficiency
NITI Aayog estimates that 86% of India’s building stock in 2070 is yet to be built.
Building codes such as the Energy Conservation and Sustainable Building Code (ECSBC) 2024 and Eco-Niwas Samhita (ENS) 2024 can improve energy efficiency.
States need to strengthen implementation through building permits, occupancy certificates and grid connections.
Power sector transition
India has rapidly expanded renewable energy generation, but transmission infrastructure has not kept pace.
Transmission bottlenecks have reportedly held back around 60 GW of renewable capacity, according to the article’s IEA reference.
Transmission networks and energy storage must be developed alongside renewable generation.
Decarbonising steel and cement
Green hydrogen-based steel production is not yet commercially viable at scale in India.
Large-scale carbon capture in cement remains a longer-term option.
Government procurement can create demand for low-emission steel and cement without forcing industries to adopt a particular technology.
Green finance
The cost of capital for grid-scale renewables in India is estimated to be about 80% higher than in advanced economies.
Payment-security mechanisms, partial credit guarantees and concessional loans can reduce financing barriers.
Public finance should be used carefully where technologies remain unproven.
The Issue in the Power Sector
Expanding Transmission and Storage
India has expanded renewable-energy generation rapidly, but transmission infrastructure has not kept pace.
The IEA estimates that transmission bottlenecks have constrained approximately 60 GW of renewable capacity.
Meanwhile, the Ministry of Power plans around 590 GW of generation additions between 2023 and 2032.
Without adequate transmission and storage, renewable electricity may not reach consumption centres reliably.
Electrification of transport, cooling and industry will further increase demand.
Therefore, transmission networks and energy storage must be developed alongside, or sometimes ahead of, new generation capacity.
Decarbonising Steel and Cement
Decarbonising steel and cement is more difficult because technologies such as hydrogen-based green steel and large-scale carbon capture remain economically or technologically challenging.
Premature technology mandates could increase costs and lock industries into inefficient processes.
Using Public Procurement to Encourage Green Industry
Instead, public procurement can create demand for low-emission materials.
Government agencies, Indian Railways and the National Highways Authority of India purchase substantial quantities of steel and cement, giving them considerable influence over industrial practices.
India’s green-steel taxonomy and proposed aggregated procurement through competitive bidding offer a practical approach.
Tenders can establish emissions-intensity thresholds without prescribing production methods.
Competition would encourage innovation, reveal the additional cost of greener materials and allow standards to become progressively stricter.
Aligning these thresholds with the Carbon Credit Trading Scheme (CCTS) would ensure consistent policy incentives and encourage industrial decarbonisation.
Challenges
Rising energy demand: Rapid urbanisation, industrialisation and infrastructure development will increase electricity and material consumption.
Implementation gap: Building-efficiency standards exist, but their adoption and enforcement remain uneven across States.
Transmission constraints: Inadequate grid infrastructure can prevent renewable electricity from reaching consumers.
Technological limitations: Green steel and carbon capture still face cost and commercial viability challenges.
High financing costs: Expensive capital can make clean-energy projects financially unattractive.
Risk of stranded assets: Investments in carbon-intensive infrastructure may require costly retrofits or early retirement.
Policy uncertainty: Mandating immature technologies may increase costs and lock industries into inefficient technological pathways.
Way Forward
Integrate efficiency into new infrastructure: Enforce building codes through permits, inspections and occupancy approvals.
Prioritise transmission and storage: Plan grid expansion alongside, or ahead of, renewable generation and electrification.
Use green public procurement: Introduce emissions-intensity thresholds for steel and cement purchased by government agencies, Indian Railways and highway authorities.
Adopt technology-neutral policies: Set emission-reduction outcomes instead of prescribing specific production methods.
Improve access to finance: Use guarantees, payment-security mechanisms and concessional financing for commercially viable clean infrastructure.
Align policy instruments: Link green-material procurement with emissions targets under the Carbon Credit Trading Scheme.
Preserve technological flexibility: Support innovation while avoiding premature investment in technologies that are not yet commercially mature.
Strengthen Centre–State coordination: Ensure consistent implementation of energy-efficiency and decarbonisation standards.
Conclusion
The need for development in India and its climate pledges should be pursued simultaneously. The next round of investments provides an opportunity not to become locked into carbon-heavy infrastructure. The basic premise would be to use low-carbon technologies that have already been proven while retaining some flexibility in case the technology has not yet matured.
