Green Power Procurement in the Agrochemical Sector in India
Case Study: UPL Ltd
The Indian agrochemical sector broadly comprises crop growth (fertilizers, plant growth regulators, biostimulants, etc.) and crop protection (pesticides) chemicals. Agrochemicals manufacturing, having a significant reliance on fossil fuels for both raw materials and energy sources is a hard-to-abate industrial sector.
In India, over 90% of emissions from the agrochemical industry originate from fertilizer production, with urea being the most significant component. In contrast, pesticides are more energy and emission-intensive than fertilizers on a per-weight basis. However, due to their lower annual production and consumption levels, their overall contribution to the energy use and emissions in the agrochemical sector is much smaller.
Many Indian agrochemical companies have not yet set net-zero targets. The ones who have declared have aligned their targets with the timeline agreed upon in “The Paris Agreement,” i.e., 2050. As key decarbonization technologies such as green ammonia and green hydrogen develop and mature in the coming years, it is likely that more agrochemical manufacturers will announce their net-zero targets in near future.
As part of its broader decarbonization journey, Agrochemical manufacturing industry is set to integrate renewable energy (RE) via two near-term opportunities:
- The rising share of RE in electricity usage: Incorporating RE into operational electricity usage currently represents the low-hanging fruit decarbonization opportunity. The current penetration of RE in electricity consumption in the agrochemical industry is approximately 3%. By 2030, this share can rise to 20%, translating to RE additions of approximately 1.7 GW.
- Green H2 adoption in the fertilizer industry: Transition from using natural gas to green H2 in producing ammonia (an intermediary product in several agrochemical processes) will be the most critical inflexion point in Agrochemical decarbonization journey. Market stakeholders estimate that approximately 10% of the hydrogen used in the fertilizer industry will be produced from RE.
Figure 1: RE installations outlook in the agrochemical sector by 2030
Source: JMK Research
Basis the scenarios described above, India’s agrochemical manufacturing sector (including fertilizers) is likely to integrate up to 11 GW of RE capacity by 2030, necessitating an investment of US$ 7 billion.
In addition to renewable energy and green hydrogen, carbon capture utilization (CCU) and the increased production of bio-products, such as bio-fertilizers and bio-pesticides, present significant opportunities for decarbonization in this sector. Carbon dioxide is a crucial raw material in the manufacturing of urea, which can be partially derived from CCU, thereby promoting a low-carbon circular economy.
With increased consumer demand and awareness of lower-carbon products, the importance of a push towards sustainability has never been higher. As one of the world’s largest and most carbon-intensive industries, agrochemical sector decarbonization will require collaborative action from all market stakeholders. The central government must devise a dedicated emission reduction framework to set clear green adoption targets for all agrochemical manufacturers. As a large share of Indian population is still directly involved in agriculture, decarbonizing agrochemical production is vital to India achieving its long-term decarbonization goals.
Table of Contents
- Indian Chemical Industrial Sector Overview
- Brief Overview of the Indian AgrochemicalManufacturing Sector
- Manufacturing Process and Emission Sources
- Ways to Decarbonize
- Decarbonization Policy and Regulatory Measures
- Leading Players
- Case Study -UPL Limited
- Company Overview
- UPL Limited business segments
- UPL India energy consumption and emissions
- Sustainability initiatives and targets
- Renewable energy consumption
- Renewable energy benefits
- Other decarbonization and sustainability measures
- Way Forward for the Agrochemical Sector
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