Agrochemical sector may add 11 GW RE capacity by 2030, require $7 bn investment: Report
New Delhi: India's agrochemical manufacturing sector is expected to integrate up to 11 GW of
renewable energy capacity
by 2030, requiring an investment of $7 billion, according to a report by JMK Research.
The
agrochemical sector
, comprising crop growth chemicals such as fertilisers and biostimulants, and crop protection chemicals such as pesticides, is among the hard-to-abate industries due to its high reliance on fossil fuels for raw materials and energy.
The report states that over 90 per cent of emissions in the agrochemical sector are generated from fertiliser production, with urea accounting for the largest share. Pesticides are more energy and emission intensive per unit weight, but contribute less to overall emissions due to their lower production volume.
'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 per cent . By 2030, this share can rise to 20 per cent , translating to RE additions of approximately 1.7 GW,' the report said.
The report identifies
green hydrogen adoption
as a critical inflexion point in the sector's decarbonisation. Ammonia, an intermediary used in several agrochemical processes, is currently produced using natural gas. Transitioning to green hydrogen is expected to reduce emissions significantly.
Market stakeholders estimate that approximately 10 per cent of hydrogen used in the fertiliser industry will be green hydrogen by 2030.
In addition to renewable energy and green hydrogen, JMK Research highlights carbon capture utilisation (CCU) and the increased production of bio-products such as bio-fertilisers and bio-pesticides as additional pathways to decarbonise the sector.
The report notes that carbon dioxide is a key input in urea manufacturing and could be partially sourced from CCU to promote a low-carbon circular economy.
The report also states that many agrochemical companies in India have not set
net-zero targets
yet. Those that have declared targets have aligned with the 2050 timeline set under the Paris Agreement. As technologies such as green ammonia and green hydrogen mature, more companies are expected to adopt net-zero goals.
JMK Research has recommended the development of a dedicated emission reduction framework by the central government to define green adoption targets for the sector.
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