What is Decarbonisation and Its Importance? - GRM Institute

What is Decarbonisation and Its Importance?


By Tanush N Anil, Madhusai Reddy, PGDRM July’21-22

Sriram R, T Rakesh Patro, PGDRM Jan’22-23


What is Decarbonisation and the need for it?

Decarbonization refers to the process of reducing carbon dioxide (CO2) emissions resulting from human activity in the atmosphere.

Carbon Footprint

A carbon footprint is the total greenhouse gas (GHG) emissions caused directly and indirectly by an individual, organization, event, or product, and is expressed as a carbon dioxide equivalent.


Global commitment towards Decarbonisation: The Paris Agreement



Image Source: Urbanplanet

  • The Paris Agreement is a legally binding international treaty on climate change.
  • Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.
  • To achieve this long-term temperature goal, countries aim to reach global peaking of greenhouse gas emissions as soon as possible to achieve a climate-neutral world by mid-century.


How does the Paris Agreement work?

  • Country submits their plans for climate action is known as nationally determined contributions (NDCs).
  • In their NDCs, countries communicate actions they will take to reduce their Greenhouse Gas emissions.
  • The Paris Agreement invites countries to formulate and submit long-term low greenhouse gas emission development strategies(LT-LEDS).

Image Source: Rajawali Siber

Image Source: Rajawali siber


How are we tracking progress?

  • With the Paris Agreement, countries established an enhanced transparency framework (ETF).
  • The information gathered through the ETF will feed into the Global stocktake which will assess the collective progress towards the long-term climate goals.
  • This will lead to recommendations for countries to set more ambitious plans in the next round.


Mostly used Technical solutions for Decarbonisation

  • Electrification of heat.
  • The use of hydrogen as fuel in a furnace or as feedstock in chemicals, or as a reactant in chemical processes.
  • The use of biomass as fuel or feedstock.
  • Carbon capture and storage.
  • Carbon capture and usage.


Why does India need Decarbonisation?

  • India is very vulnerable to climate change, notably due to the melting of the Himalayan glaciers and changes in weather cycles.
  • India’s carbon emissions stand at 2.46 billion tonnes today (6.8% of the world’s total).
  • Assuming a similar growth rate today, the country’s emissions will rise to around 4 billion tonnes by 2030.

India’s contribution:

– Increase non-fossil energy capacity to 500 GW (gigawatts) by 2030.

Image Source: Platform on disaster management

– Meet 50 percent of energy requirements from renewable energy (RE) by 2030.

– Reduce the total projected carbon emissions by 1 billion tonnes (BT) by 2030.

– Reduce the carbon intensity of the economy by less than 45 percent.

– Achieve net-zero carbon by 2070.

  • India’selectricity pricing policy needs to be significantly overhauled.
  • Absorbing a greater percentage of variable renewable energy (VRE).
  • Banking sector reforms.


What is Net-zero, and why it is relevant?

Net-zero is a climate outcome where greenhouse emitted into the atmosphere are balanced by removal in equal amounts. The ‘net’ effect is that the global temperature remains unchanged.


Why Should Companies Care?

  • Climate Risk plays a major role in an organization`s future forecast.
  • If companies didn`t consider the climate risk, there is a chance of potential business losses from
  • Physical phenomena like climate uncertainty.
  • Emerging regulations.
  • Emission caps.
  • Changing customer behavior and preferences.
  • Potential legal issues.

Image Source: BQ Prime


What Can Companies Do?

Image Source: SustainLab

It’s easier for companies to achieve net zero that doesn’t affect the fundamentals of their business. The challenge will be a lot bigger for companies that will have to fundamentally alter their business. The energy sector, for instance, is still largely coal-powered and contributes more than half of India’s emissions.


Key commitments by companies toward Decarbonisation

Reliance: To meet its net carbon zero target, the firm said it will use newer technologies to reduce emissions and plans carbon capture and storage.

HDFC Bank: It aims to reduce water consumption, and single-use plastic and plant 25 lakh trees to offset its carbon footprint.

JSW Steel: JSW is prioritizing resource utilization, for which it has invested in and implemented a range of iron and steel-making technologies.

HUL: Ends coal use across its plants in sustainability push.

Image Source: BQ Prime


How To Assess these Pledges?

  • See the companies’ history of clean energy adoption.
  • Their ability to access finance to deploy such solutions can be another parameter to assess whether their plans are realistic or not.
  • Government regulations.


Get the full study here: decarbonisation pdf



This report has been produced by students of Global Risk Management Institute for their own research, classroom discussions and general information purposes only. While care has been taken in gathering the data and preparing the report, the student’s or GRMI does not make any representations or warranties as to its accuracy or completeness and expressly excludes to the maximum extent permitted by law all those that might otherwise be implied. References to the information collected have been given where necessary.

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