Indian chemical industry's journey from grey to green

The Indian chemical industry is on the threshold of a revolution as it embarks on a mission to adopt sustainable practices and green innovations as it targets net-zero emissions by 2070. This aligns with the country’s broader commitment made at the United Nations Climate Change Conference (COP26 Summit) in 2021.

For the sector – comprising bulk chemicals, agrochemicals, speciality chemicals, polymers, and petrochemicals – now is the time to embark on the green journey. The need to shift is largely driven by consumer demand for sustainable products and stricter environmental regulations. The industry has been increasingly adopting green chemicals – that minimise waste, use eco-friendly solvents and reaction conditions – and sustainable practices.

This sector is the largest industrial energy consumer and the third-largest industry sub-sector in terms of direct carbon dioxide (CO2) emissions.

Chemical industry - particularly producers of ammonia and methanol – has been traditionally relying on fossil fuels, but this can be produced sustainably through electrolysis, using hydrogen. Thus, electrolytic hydrogen can also be used to produce sustainable aviation fuel and synthetic natural gas from hydrogen and CO2. This helps to avoid fossil fuels, apart from significant reduction of carbon footprint.

A Greener Future

India's chemical industry requires a transformative shift towards more sustainable practices, which includes exploring alternative feedstocks and adopting low-carbon fuels such as biomass, hydrogen, and bio-Compressed Natural Gas. Innovations in bioplastics (such as biodegradable polymers and edible straws made from seaweed) can greatly reduce plastic pollution and dependence on single-use plastics.

Harnessing Hydrogen

Missions such as National Green Hydrogen Mission (NGHM) aim to establish India as a global hub for green hydrogen, apart from promoting hydrogen as a clean energy source to develop infrastructure, supporting policies, and encouraging public-private partnerships. Key strategies include transitioning from grey hydrogen to green hydrogen in ammonia production and blending green hydrogen with existing natural gas and refinery operations.

This approach can significantly reduce India's carbon footprint, enhance energy security, and position the country as a leader in the hydrogen economy. The mission supports research and development (R&D), infrastructure development, and financial incentives to foster a robust green hydrogen ecosystem.

The Indian chemical sector ranks as the sixth-largest producer globally and third in Asia, contributing about 7% to India’s GDP in 2023. Valued at $220 billion in 2022, the sector is projected to grow to $1 trillion by 2040, driven by increasing consumer demand, urbanisation, and robust government support.

As of 2023, it directly contributes around 4% of India’s greenhouse gas (GHG) emissions. This sector faces significant environmental challenges, including the rampant use of toxic chemicals and high GHG emissions. To address these issues, the industry needs a comprehensive sustainability roadmap that ensures growth while minimising its environmental footprint.

Grey Versus Green Ammonia

Grey ammonia production, which utilises natural gas or coal via steam methane reforming (SMR) or coal gasification, releases significant CO2 emissions, contributing to GHGs and environmental degradation.

Conversely, green ammonia is produced using renewable energy through water electrolysis to generate hydrogen, which is then combined with nitrogen from the air via the Haber-Bosch process. This method significantly reduces or eliminates CO2 emissions, offering a sustainable and eco-friendly alternative. Summing up, India is at a pivotal juncture, with the potential to lead the way in green efficiency. By adopting sustainable practices, exploring innovative technologies, and leveraging policy support, the industry can significantly reduce its environmental impact while continuing to drive economic growth.

Author is MD & CEO at Tata Consulting Engineers