ENERGY TRANSITION FOR INDUSTRY: INDIA AND THE GLOBAL CONTEXT pptx

Nathalie trudeau, CeCilia tam,
dagmar graCzyk aNd Peter taylor
INFORMATION PAPER
ENERGY TRANSITION FOR INDUSTRY:
INDIA AND THE GLOBAL CONTEXT
2011
January
INTERNATIONAL ENERGY AGENCY
The International Energy Agency (IEA), an autonomous agency, was established in
November 1974. Its mandate is two-fold: to promote energy security amongst its member
countries through collective response to physical disruptions in oil supply and to advise member
countries on sound energy policy.
The IEA carries out a comprehensive programme of energy co-operation among 28 advanced
economies, each of which is obliged to hold oil stocks equivalent to 90 days of its net imports.
The Agency aims to:
n Secure member countries’ access to reliable and ample supplies of all forms of energy; in particular,
through maintaining effective emergency response capabilities in case of oil supply disruptions.
n Promote sustainable energy policies that spur economic growth and environmental protection
in a global context – particularly in terms of reducing greenhouse-gas emissions that contribute
to climate change.
n Improve transparency of international markets through collection and analysis of
energy data.
n Support global collaboration on energy technology to secure future energy supplies
and mitigate their environmental impact, including through improved energy
efficiency and development and deployment of low-carbon technologies.
n Find solutions to global energy challenges through engagement
and dialogue with non-member countries, industry,
international organisations and other stakeholders.
IEA member countries:
Australia
Austria

Belgium
Canada
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Japan
Korea (Republic of)
Luxembourg
Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
The European Commission
also participates in
the work of the IEA.
Please note that this publication

is subject to specic restrictions
that limit its use and distribution.
The terms and conditions are available
online at
www.iea.org/about/copyright.asp
© OECD/IEA, 2011
International Energy Agency
9 rue de la Fédération
75739 Paris Cedex 15, France
www.iea.org
Nathalie trudeau, CeCilia tam,
dagmar graCzyk aNd Peter taylor
INFORMATION PAPER
ENERGY TRANSITION FOR INDUSTRY:
INDIA AND THE GLOBAL CONTEXT
2011
January
This information paper was prepared for the Energy Technology Perspective Project of the International
Energy Agency (IEA). It was drafted by the Energy Technology Policy Division of the IEA. This paper reflects
the views of the IEA Secretariat, but does not necessarily reflect those of individual IEA member countries.
For further information, please contact Nathalie Trudeau at

©OECD/IEA2011 EnergyTransitionforIndustry:IndiaandtheGlobalContext

Page|3
Tableofcontents
Acknowledgements 7
Executivesummary 9
Transitiontoalow‐carbonenergyfuture 14
Introduction 17

Chapter1.Industryoverview 19
EnergyandCO
2
savingspotentialinIndi a,basedonbestavailabletechnologies 21
IEAscenariosforIndia’sindustrialsector 22
Furtherconsiderations 25
Chapter2.Sectoralanalysis 27
Ironandsteel 27
Cement 36
Chemicalsandpetrochemicals 43
Pulpandpaper 51
Aluminium 59
Chapter
3.AlternativecaseforIndia:Stronggrowth 69
BasicassumptionforIndia’sstronggrowthcase 69
Materialsconsumptionandproductionunderthestronggrowthcase 70
ScenariosforindustrialenergyuseandCO
2
emissionsinthestronggrowthcase 71
AnnexA:KeytrendsinIndia’sindustrialsector 75
AnnexB:Indicatorsforthechemicalandpetrochemicalsector 81
AnnexC:References 85
AnnexD:Abbreviations,acronymsandunits 89
Listoffigures
FigureES.1:India’sdirectCO
2
emissionsreductionbyindustryinthelow‐demandcase 11
Figure1:GlobalCO
2
emissionsreductionbysectorintheBLUEScenario 17

Figure2:Industrialenergyusebyregion,2007 19
Figure3:Industrialfinalenergyconsumptionbysub‐sectorinIndiaandintheworld,2007 20
Figure4:IndustrialfinalenergymixinIndiaandintheworld,
2007 20
Figure5:Materialsproductionbyregioninthelow‐andhigh‐demandcases 24
Figure6:Useofcokedryquenchingtechnologybycountry,2004 29
Figure7:ReducingagentsconsumptioninBlastFurnacesintheworld2007/2008*/2009** 29
Figure8:Energysavingspotentialin
2007forironandsteel,basedonBAT 30
Figure9:IronandsteelenergyanddirectCO
2
intensityforlow‐demandscenarios,
Indiaandworldaverage 32
Figure10:India’sdirectCO
2
emissionsreductionbytechnologyoptionforironandsteel 33
Figure11:GlobaldirectCO
2
emissionsreductionbytechnologyoptionforironandsteel 33
EnergyTransitionforIndustry:IndiaandtheGlobalContext ©OECD/IEA2011

Page|4
Figure12:RegionalcontributiontoreducingglobaldirectCO
2
emissionsiniron
andsteel,low‐demandcase 34
Figure13:Shareofcement‐kilntechnology 37
Figure14:Thermalenergyconsumption pertonneofclinker 38
Figure15:Energy‐savingspotentialin2007forcement,basedonBAT 39
Figure16:CementdirectCO

2
intensityinIndiaandworldaverage 40
Figure17:India’sdirectCO
2
emissionsreductionbytechnologyoptionforcement 41
Figure18:GlobaldirectCO
2
emissionsreductionbytechnologyoptionforcement 42
Figure19:RegionalcontributioninglobaldirectCO
2
emissionsincement,
low‐demandcase 42
Figure20:Energysavingspotentialin2007forchemicalsandpetrochemicals,
basedonBPT 46
Figure21:India’schemicalandpetrochemical sector energyconsumption,
includingfeedstock 47
Figure22:India’sdirectCO
2
emissionsreductionbytechnologyoptionfor
chemicalsandpetrochemicals 48
Figure23:Globaldirectemissionsreductionbytechnologyoptionforchemicalsand
petrochemicals 49
Figure24:RegionalcontributiontoreducingglobaldirectCO
2
emissionsinchemicalsand
petrochemicals,low‐demandcase 49
Figure25:Pulpandpaperheatefficiencypotentials 53
Figure26:Energysavingspotentialin2007forthepulpandpaper,basedonBAT 54
Figure27:India’spulpandpaperenergyconsumptionbyenergysourceandscenarios 56
Figure28

:India’sdirectCO
2
emissionsreductionbytechnologyoptionforpulpandpaper  56
Figure29:GlobaldirectCO
2
emissionsreductionbytechnologyoptionforpulpandpaper  57
Figure30:RegionalcontributiontoreductioninglobaldirectCO
2
emissionsinpulp
andpaper,low‐demandcase 58
Figure31:Specificenergyconsumptionofmetallurgicalaluminaproduction 60
Figure32:Smeltertechnologymix,1990to2008 61
Figure33:Energysavingspotentialin2007foraluminium,basedonBAT 62
Figure34:India’sdirectandindirectCO
2
emissionsinaluminium 64
Figure35:India’sdirectCO
2
emissionsreductionbytechnologyoptionforaluminium 64
Figure36:GlobaldirectCO
2
emissionsreductionbytechnologyoptionforaluminium 65
Figure37:RegionalcontributiontoreducingglobaldirectCO
2
emissionsinaluminium,
low‐demandcases 66
Figure38:India’smaterialsproductionundertheETP2010andstronggrowthcases 71
Figure39:FinalenergyuseinIndia’sindustry 71
Figure40:India’sdirectenergyandprocessCO
2

emissionsbyindustrialsector 72
Figure41:OptionsforreducingdirectCO
2
emissi onsfromIndia’sindustryinthe
stronggrowth case 73


©OECD/IEA2011 EnergyTransitionforIndustry:IndiaandtheGlobalContext

Page|5
Listoftables
TableES.1:India’sdirectCO
2
emissionsreductionbyindustry 10
TableES.2:Production,energyconsumptionandCO
2
emissionsforIndia’s
ironandsteelin du st ry 11
TableES.3:Production,energyconsumptionandCO
2
emissionsforIndia’s
cementindustry 12
TableES.4:Production,energyconsumptionandCO
2
emissionsforIndia’s
chemicalandpetrochemicalindustry 13
TableES.5:Production,energyconsumptionandCO
2
emissi on sfor
India’spulpandpaperindustry 13

TableES.6:Production,energyconsumptionandCO
2
emissionsforIndia’s
aluminiumindustry 14
Table1:India’sindustrialmaterialsproductionandenergyuse,2007 21
Table2:India’smaterialsdemandinkilogramspercapita(kg/cap) 22
Table3:India’stotalfinalenergyusebyindustry,Mtoe 23
Table4:India’sdirectCO
2
emissionsbyindustry,MtCO
2
 24
Table5:Globalsteelproduction,2007 27
Table6:India’sironandsteelproductionbyscenarios,Mt 31
Table7:Technologyoptionsfortheironandsteelindustry 35
Table8:Globalcementproduction,2007 36
Table9:India’scementindustrymainindicatorsbyscenarios 39
Table10
:Technologyoptionsforthecementindustry 43
Table11:PotentialenergyimprovementsbyBPTintheglobalchemicaland
petrochemicalsector,2006(includingbothprocessenergyandfeedstockuse)
a
 45
Table12:India’sHVC,ammoniaandmethanolproduction 47
Table13:Technologyoptionsforthechemicalandpetrochemicalindustry 50
Table14:Globalpaperandpaperboardproduction,2007 51
Table15:India’spulpandpaperproductionbyscenarios 55
Table16:Technologyoptionsforthepulpandpap
erindustry 58
Table17.Globalprimaryaluminiumproduction,200 7 59

Table18:India’saluminiumproductionbyscenarios 63
Table19:Technologyoptionsforthealuminiumindustry 67
Table20:GDPprojections(%peryear,basedonpurchasingpowerparity) 69
Table21:High‐leveli
ndicatorsforIndiainETP2010andstronggrowthcases 70
Table22:India’smaterialsdemandpercapita,kg/cap 70
TableA.1:Demandprojectionforindustry,kg/cap 75
TableA.2:MaterialsproductionintheBaselineScenario,Mt 75
TableA.3:MaterialsproductionintheBLUESce
nario,Mt 77
TableA.4:FinalenergyuseinindustryintheBaselineScenario,Mtoe 79
TableA.5:FinalenergyuseinindustryintheBLUEScenario,Mtoe 79
TableA.6:DirectCO
2
emissionsinindustryintheBaselineScenario,MtCO
2
 80
EnergyTransitionforIndustry:IndiaandtheGlobalContext ©OECD/IEA2011

Page|6
TableA.7:DirectCO
2
emissionsinindustryintheBLUEScenario,MtCO2 80
TableB.1:BPTvaluesonthespecificenergyconsumptionfortheproduction
ofkeychemicals(left:infinalenergyterms,denotedwithindex”f”;right:
inprimaryenergyterms,denotedwithindex“p”)
1
 82
Listofboxes
BoxES.1:Scenariosfortheindustrialsector 9

Box1:TheETP2010scenarios 23

©OECD/IEA2011 EnergyTransitionforIndustry:IndiaandtheGlobalContext

Page|7
Acknowledgements
ThispaperwaspreparedbystaffoftheInternationalEnergyAgency’sDirectorateofSustainable
EnergyPolicyandTechnologyincollaborationwiththeDirectorateofGlobalEnergyDialogue.
A number  of Indian experts have contributed significantly to improving the data and analysis
presented in this paper. The IEA is grateful for the
 contribution of the India Energy Technology
Perspectives Expert Group and wishes to thank the then Secretary, Ministry of Power, H. S.
Brahma for establishing  the India Energy Technology Expert Group to work with the IEA in
preparingEnergyTechnology Perspectives2010.
The expert group provided invaluable insights to our team
 to develop the India analysis. The IEA
wish to thank for their important contributions: S.M. Dhiman, Member (Planning), Central
Electricit y Auth orit y ,chairmanoftheExpertgroup;DilipChenoy,DirectorGeneral,SocietyofIndian
Automobile Manufacturers (SIAM), chairman of the transportation sub‐group; I.C.P.Keshari,Joint
Secretary,MinistryofPower,chairman
ofthepowersub‐group;Dr.AjayMathur,DirectorGeneral,
Bureau of Energy Efficiency (BEE), chairman of the buildings sub‐group; V. Raghuraman, Chief
Adviser, Jaguar Overseas Ltd, chairman of the industry sub‐group; A. S. Bakshi, Chief Engineer,
Central Electricity Authority (CEA); Amarjeet Singh, Chief Engineer (C&E), (CEA); Anita Gahlot,

DeputyDirector,CEA;andtheconvenerandmembersofthesub‐work ing groups:
Sub‐Groupfo rPowersector
:SewaBhawan,R.K.PuramChiefEngineer,CEA(convener);Ms.Shruti
Bhatia,ConferederationofIndianIndustry(CII);Dr.Pradeep Dadhich,SeniorFellow,The Energy
and Resources Institute (TERI); Mr. D.K.Dubey, AGM (CCT); Shri P.K. Goel, Director, Ministry of

Power; Shri R.B. Grover, Scientific Adviser, Departm ent  of Atomic  Energy (DAE); Shri D.K. Jain,

ExecutiveDirector (Engg),NTPC Ltd; Dr. Sudhir Kapur, Member CII National Committee on Power
and MD & CEO‐CountryStrategyBusine ss ; Shri R.K. Kaul, Joint Advisor,PlanningCommission; Sh.
Sanjeev Mahajan, DGM (PE‐CCT) ;  Shri Sudhir Mohan, Advisor, Ministry of New and Renewable
Energy (MNRE); Mr.B.H.Narayana, Addl.Dir.,
Central Power Research Institute(CPRI); Mr.Sunil
Parwani, Addl. General Manager (Power Sector‐Planning & Monitoring), BHEL; Shri D.N. Prasad,
Director,MinistryofCoal;ShriR.K.Sethi,Director,MinistryofEnvironmentandForests(MOEF);Sh.
ArunSrivastavaScientificOfficer/Engineer‐H,(StrategicPlanningGroup),DAE.
Sub‐GroupforBuildingssector
:Sh.SanjaySeth,EnergyEconomist,BEE(Co nvener);Mr.Pradeep
Kumar,SeniorFellow,TERI;Mr. K.I.Singh,GM(PE‐Infrastruct ureServices),NTPCLtd;Mr.S.Srinivas,
Principal Counsellor, CII Green Business Centre, Hyderabad; Sh. Lekhan Thakkar, Vice President,
GujaratUrbanDevelopmentCompanyLtd.(GUDC);Dr.Vakil,CEPTUniversity,Ahmedabad.
Sub‐Group for
 Industry sector:Sh. Amarjeet Singh, Chief Engineer (C&E), CEA (Convener); Shri
B.N.Bankapur,Director(Ref),IndianOilCorporation(IOC);Mr.M.R.Gandhi,Scientist‐G,Central
Salt&MarineChemicalResearchInstitute;Dr.SatishKumar,ChiefofParty,USAIDECO‐IIIProject,
IRG; Sh. A. Panda, ED (S&EP); Shri K. Murali, Director (Ref), Hindustan Petroleum
 Corporation
Limited (HPCL); Sh. U. Venkata Ramana; Sh. Gautam Roy, GM(T); Mr. Ambuj Sagar, Indian
Institute of Technology Delhi (IIT); Mr. Girish Sethi, Director(EET Division), TERI; Mr. S.P. Singh,
GM (E&P); Sh. S.B. Thakur, DGM (S&EP); Mr. K.S. Venkatagiri, Principal Counsellor,  CII Green
BusinessCentre,Hyderabad;SaurabhYadav,Knowledge
ManagementSpecialist,BEE.
Sub‐Group for Transport sector
: Smt. Neerja Mathur, Chief Engineer (OM), CEA(Convener);
Dr.Ajit Gupta, Retd. Advisor, MNRE; Mr. Saurabh Dalela, Addl. Dir, NATRiP; Sh. Dinesh Tyagi,
Director(Tech)NationalAutomotiveTe stingandR&DInfrastructureProject(NATRiP).

EnergyTransitionforIndustry:IndiaandtheGlobalContext ©OECD/IEA2011

Page|8
AswellasallotherparticipantsattheJointIEA‐IndiaWorkshoponRegionalAnalysisofIndiawho
provided valuable comments and feedback on the Indian analysis including, but not limited to:
Suresh Chander, Chief Engineer, CEA; K.K. Roy Chowdhury, Technical Associate, Cement
Manufacturers’ Association; Sriganesh Gandham, GM‐ Corporate R&D, HPCL;
 Shri Alok kumar
Goyal, Scientist, CPRI; Praveen Gupta, Director, CEA; Shri A.K. Gupta, Chief Engineer, CEA; Ravi
Kapoor, USAID, ECO‐III; Shri S. M. Kulkarni, Hindalco; A.K. Kulshreshtha, CDE (PE‐Mech); Rajesh
Kumar, Assistant Director, CEA; Mr. R.C Mall, IPMA; Dr. Nand, Fertiliser Association of India; P.
Pal, Deputy GM,
Engineering; Prof. V.K. Paul, Head of the Dept of Building Engineering &
Management; Shri M.S. Puri, Chief Engineer, CEA; Prof. P.K. Sarkar, Professor of Transport
Planning; Naveen Kumar Sharma, GM, Grinding Unit, JK Lakshmi Cement Ltd.; K. Sheshadri,
Assistant Director I, CEA; Shri Avtar Singh, Indian Paper Manufacturers Association (IPMA); K.I

Singh,NTPC;HardayalSingh,DeputyDirector,CEA;MajorSingh,ChiefEngineer,CEA;V.K.Singh,
Deputy Director, CEA; Dr. B.P. Thapliyal, Scientist, Central Power Research Institute (CPRI); C.B.
Trivedi,DeputyDirector,CEA;AnilKVarshney,AdditionalVicePresident,BSESRajdhaniPower.

©OECD/IEA2011 EnergyTransitionforIndustry:IndiaandtheGlobalContext

Page|9
Executivesummary
Population growth, the modernisation of lifestyles, higher electrification rates and rapidly
growinggrossdomesticproduct (GDP)in Indiadrivea largeincrease inener gy demandand put
pressure on the security, reliability and affordability of energy supply, all of which are strongly
linkedtoeconomics tabilityanddevelopment.
Globally,theerosion

ofenergy security,thethreatofdisruptivecli matechangeandthegrow ing
energy needs of the developing world all pose major challenges to energy decision makers.
Energy security concerns are compounded by the increasingly urgent need to mitigate
greenhouse‐gas (GHG) emissions, including those relating to energy production and
consumption.
Currentenergyconsumptionandcarbondioxide(CO
2
)emissiontrendsrundirectly
counter to the repeated warnings sent by the United Nations Intergovernmental Panel on
ClimateChange(IPCC),whichconcludesthatonlyscenarios  resultingin a50%  to85%reduction
ofglobal CO
2
emissionsby2050 (comparedto 2000 levels)canlimitthelong‐term global mean
temperatureriseto2.0°Celsius(°C)to2.4°C(IPCC,2007).
TheBLUEScenario,developedbytheInternationalEnergyAgency(IEA)andpresentedinEnergy
Technology Perspectives 2010 (ETP2010) (IEA,2010), examines the least‐cost pathways
for
meetingthegoalofreducingglobalenergy‐relatedCO
2
emissions to50%of2005levels by2050
while also proposing measures to overcome technical and policy barriers. The BLUE Scenario is
consistentwithalong‐termglobalriseintemperaturesof2.0°Cto3.0°C,butonlyifthereduction
inenergy‐relatedCO
2
emissionsiscombinedwithdeepcutsinotherGHGemissions.
ThescenarioenvisagedintheBLUEScenariorequiredCO
2
emissionsreductionacrossalltheenergy‐
consumingsectors. Forindustry,acti onisparticularlycrucialinthefivemost energy‐intensivesectors:
iron and steel; cement; chemicals and petrochemicals; pulp and paper; and aluminium. Globally,

these sectors currently account for 77% of total direct CO
2
 emissions from industry; in India, they
accountfor56%ofindustrialenergyconsumptionand 82%ofdirectCO
2
emi ssion s.
BoxES.1:Scenariosfortheindustrialsector
Each country and region of the world will contribute differently to the reduction in emis sions
from the industrial sector, depending on the expected growth in production as well as the
potentialforenergyandCO
2
savings.
InETP2010,theIEAdevelopedtwodifferentscenariostoanalysetheindustrialsector:
 TheBaselineScenarioreflectsdevelopmentsthatareexpectedonthebasisoftheenergypolicies
thathavebeenimplementedorthathavebeenapprovedandaretobeimplemented.
 TheBLUEScenarioistarget‐drivenandaimstoachievetotalemissionsfromtheindustrythatare
24%lowerin2050thanthe2007level.
Given the recent global economic crisis and uncertainties about projecting long‐term growth in
consumption of materials, the IEA also developed two different cases for each scenario: a low‐
demandandahigh‐demandcaseforindustrialmaterials.Theindustriallow‐demandcaseisused to
developtheglobalBLUEScenariopresentedinETP2010.
Going beyond the analysis presented in the ETP2010, the IEA has developed an alternative strong
growthcase forIndia. Inthisalternativecase,thefuturegrowthof GDPishigherthanthatusedfor
thedevelopmentofETP2010.
EnergyTransitionforIndustry:IndiaandtheGlobalContext ©OECD/IEA2011

Page|10
Inthe caseofIndia,total industrialenergyconsumption between2007and2050 isexpected to
grow 3.5 times under the  Baseline low‐demand scenario and4.2 times under the high‐demand
scenario. By implementing policies and measures defined in the BLUE Scenario, energy

consumptioninIndiawouldbehigherin
2050thanin2007,butbetween121million tonnesofoil
equivalent(Mtoe)and140MtoelowerthanintheBaselineScenarioin2050.Inanyscenario,the
finalenergyusein2030and2050issignificantlyhigherthantoday.
Nosingleoptioncanyieldthenecessaryemissionreductions.Energy
efficiencyalonewillnotbe
sufficient to reduce emissions in the industrial sector as the production growth in India by far
exceeds the savings potential from energy efficiency. Gover nment policies are needed to
facilitateatransitiontomoreefficientandlower‐carbontechnologies.
Asignificantreduction inCO
2
emissions in Indianindustry willonlybe  possible ifallsub‐sectors
contribute. Direct industry emissions can only be limited to an increase of 100% and 268% of
currentlevelsby2050ifallsub‐sectorssignificantlyreducetheirfutureemissionsbelowthelevel
anticipated in the Baseline Scenario (Table
ES.1). In the BLUE Scenario, all sub‐sectors need to
reduceemissionssubstantiallyin2050and,fortheoverallindustrialsector,obtainlevelsthatare
46%(low‐demandcase)and51%(high‐demandcase)lowerthanintheBaselineScenario.
TableES.1:India’sdirectCO2emissionsreductionbyindustry

Total
industry
Iron and
steel
Cement
Chemicals and
petrochemicals
Pulp
and
paper

Aluminium
Other
industries
Direct CO
2
emissions in industry, Mt CO
2

2007 413 151 128 48 8 4 74
2050

Baseline low-demand 1 564 703 422 132 36 14 256
Baseline high-demand 1 852 858 483 173 62 21 256
Baseline strong growth 2 807 1 153 1 060 229 87 22 256

BLUE low-demand 827 333 275 68 17 12 122
BLUE high-demand 906 362 291 77 31 16 129
BLUE strong growth 1 519 532 676 119 50 22 122


Changes in BLUE 2050 vs. 2007
BLUE low-demand 100% 121% 114% 42% 113% 214% 65%
BLUE high-demand 120% 140% 126% 61% 285% 321% 74%
BLUE strong growth 268% 253% 426% 149% 507% 469% 65%

Changes in BLUE 2050 vs. Baseline 2050
BLUE low-demand -47% -53% -35% -48% -52% -16% -53%
BLUE high-demand -51% -58% -40% -55% -49% -24% -50%
BLUE strong growth -46% -54% -36% -48% -43% -1% -53%
Eachindustrialsub‐sectorwillcontributetolimitthegrowthindirectCO

2
emissionsinIndiaunder
the BLUE low‐demand scenario  (FigureES.1). Direct CO
2
 emissions reduction is limited in the
aluminiumsectorgivenitshighshareofelectricityuse.Theironandsteelsectorwillcontributethe
©OECD/IEA2011 EnergyTransitionforIndustry:IndiaandtheGlobalContext

Page|11
mosttothereduction.Thescenarioisconsistentwitha50%reductioninglobalCO
2
emissionsand
a24%reductionintheglobalindustrysectorin2050,comparedtothe2007level.
FigureES.1:India’sdirectCO
2
emissionsreductionbyindustryinthelow‐demandcase

Ironandsteel
India’scrudesteelproductionisprojectedtoincreasefivetotentimesbetween2007and2050,
underboththeBaselineandBLUEscenarios.Energyconsumptionalsoincreasesbutataslower
pace(TableES.2).Severaloptionsexistintheironandsteelsectortoreducethelevelofenergy
use and associated CO
2
 emissions. In the BLUE Scenario, energy consumption in 2050 is about
28% lower than in the Baseline Scenario. Direct CO
2
 emissions in 2050 in the BLUE Scenario
wouldbetwiceashighthanin2007,butabout50%lowerthanintheBaselineScenario.
TableES.2:Production,energyconsumptionandCO
2

emissi on sforIndia’sironandsteelindu stry

2007 Baseline–2050 BLUE–2050
 
low‐
demand
high‐
demand
strong
growth
low‐
demand
high‐
demand
strong
growth
Crudesteelproduction
(Mt)
53 266 355 550 266 355 550
Energyconsumption
(Mtoe)
38 173 211 286 122 153 209
DirectCO
2
emissions
(MtCO
2
)
151 703 858 1153 333 362 532
TheresultsoftheBLUEScenarioarebasedonthepursuitoffourmaintechnicaloptions:

 Improving energy efficiency through the deployment of existing best available technologies
(BATs)andthedevelopmentofnewtechnologies;
 Fuel switching through gas‐based direct reduced iron (DRI), reducing coal‐based DRI
production,usingCO
2
‐freeelectricityandhydrogen;
 Improvingthematerialsflowmanagement(highrecyclingrates);and
 Providingcarboncaptureandstorage(CCS).
EnergyTransitionforIndustry:IndiaandtheGlobalContext ©OECD/IEA2011

Page|12
Cement
DemandforcementinIndiawillbebetween3.8and9.7timeshigherin2050thanitwasin2007.
ProductionisprojectedtobethesameundertheBaselineandBLUEscenarios(TableES.3).
TableES.3:Production,energyconsumptionandCO
2
emissionsforIndia’scementindustry

2007 Baseline–2050 BLUE–2050
 
low‐
demand
high‐
demand
strong
growth
low‐
demand
high‐
demand

strong
growth
Cementproduction(Mt) 170 646 742 1656 646 742 1656
Energyconsumption
(Mtoe)
13 42 48 105 48 55 126
DirectCO
2
emissions
(MtCO
2
)
128 422 483 1060 275 291 676
Based on the technology characteristics of India’s cement industry, it appears  clear that the
efficiency of India’s cement production is better than the world average. The majority of large
kilns are among the most energy efficient in the world. As such, little improvement can be
achievedbyapplyingBATsinthese
large kilns,butthereislargepotentialtoimproveefficiencyif
BATisappliedin smallerunits.Othermeasurescoulddeliverlargeenergy and/orCO
2
emissions
reduction.Thosemeasuresinclude:
 Improving cement productionenergy efficiencyby deployingexisting BATs for new plants and
smallunits,andphasingoutwetkilnsandretrofittingtomoreenergy‐efficienttechnologies;
 Expandingtheuseofclinkersubstitutes;
 Fuel switching to less carbon‐intensive fossil fuels, and
expanding the use of biomass and
alterativefuels;and
 ProvidingCCS.
Chemicalsandpetrochemicals

India’schemicalandpetrochemicalsectorcontinuestobeveryinnovative,butisitunclearhowit
will develop in future if, for example, substantially higheroil and gas  pricesslow demand.Even
though the pace is expected to slow to some extent, the sector is still expected to grow
significantlyin
thecomingdecades,bothinIndiaandglobally.
A growing world population is likely to require more fertilisers to produce food and to meet
increaseddemandforbiomassasafuelandafeedstock.Inthelastfewdecades,thesectorhas
experienced substantial growth world wide. The production of
high‐valued chemicals (HVC)
1
 in
India is projected to be between 4.3 and 10times higher in 2050 than in 2007. Ammonia and 
methanolproductionwillalsoincreasesubstantially(TableES.4).



1
High‐valuechemicalsincludeethylene,propylenefromthepyrolysisgasofsteamcrackers,benzene(containedamounts,excluding
extractedamounts),butadiene(alsocontained),acetyleneandhydrogen(soldasfuel).
©OECD/IEA2011 EnergyTransitionforIndustry:IndiaandtheGlobalContext

Page|13
TableES.4:Production,energyconsumptionandCO
2
emissionsforIndia’schemicaland
petrochemicalindustry

2007 Baseline–2050 BLUE–2050
 
low‐

demand
high‐
demand
strong
growth
low‐
demand
high‐
demand
strong
growth
Production(Mt) 
‐ High‐valuechemicals 10 45 80 104 39 59 91
‐ Ammonia 13 30 33 47 30 33 47
‐ Methanol 0.1 0.8 1.0 1.4 0.8 1.0 1.4
Totalenergy
consumption(Mtoe)
27 83 126 165 74 100 153
TotaldirectCO
2

emissions(MtCO
2
)
48 132 173 229 68 77 119
Iftheexpectedsubstantialgrowthinthechemicalandpetrochemicalsectoristobesustainable
and consistent with achieving broader goals for CO
2
 emissions reduction, steps will need to be
taken,notablyon:

 Implementingbestpracticetechnologies(BPT)intheshorttermandnewtechnologiesinthe
longterm;
 Expandingtheproductionofbio‐basedplasticsandchemicals,andcontinuingtoswitchaway
fromoilfeedstock;
 Improvingtheflowmanagemen t
ofmaterials;and
 ProvidingCCS.
Pulpandpaper
Demandfor paperand paperboardinIndiaisexpected to increasefrom 7.7kilogramper capita
(kg/cap) today to 43kg/cap in the low‐demand case, 76kg/cap in the high‐demand case and
120kg/capinthestronggrowthcase.Thesestrongincreasesindemandwilldrivetheproduction
of
 paper and paperboard in India from 7.6Mt in 2007 to between 81Mt and 232Mt in 2050.
Despite this strong increase in production, the energy consumption associated with the
production of pulp and paper will only be 6.1 to 15times higher in the BLUE Scenario in 2050
thanin2007(TableES.5).
TableES.5:Production,energyconsumptionandCO
2
emissi onsforIndia’spulpandpaperindustry

2007 Baseline–2050 BLUE–2050
 
low‐
demand
high‐
demand
strong
growth
low‐
demand

high‐
demand
strong
growth
Production(Mt) 
‐ Pulp 4 13 21 19 11 19 16
‐ Paperandpaperboard 8 81 148 232 81 148 232
Totalenergy
consumption(Mtoe)
3 19 33 47 17 31 43
TotaldirectCO
2

emissions(MtCO
2
)
8 36 62 87 17 32 50
EnergyTransitionforIndustry:IndiaandtheGlobalContext ©OECD/IEA2011

Page|14
The following options are available to limit the growth  in energy use and associated CO
2

emissionsinthepulpandpaperindustry:
 Deploying BATs, including black liquor and biomass gasification, increasing waste heat
recovery, developing and implementing new paper‐drying technologies, and increasing the
useofcombinedheatandpower(CHP);
 Fuelswitchingfromfossilfuelstocombustiblebiomass;
 Increasingtheuse
ofrecoveredpaper;and

 ProvidingCCS.
Aluminium
Indiais animportant playerinthealuminiumsector,especially becauseof itsabundant bauxite
reserves. In 2007, India was the eighth‐largest producer of primary aluminium world wide. The
strong growth in production between 2007 and 2050 (Table ES.6) will mostly be driven by the
growthinaluminiumusedin
transportation,buildingandpowersectors.
TableES.6:Production,energyconsumptionandCO
2
emissionsforIndia’saluminiumindustry

2007 Baseline–2050 BLUE–2050
 
low‐
demand
high‐
demand
strong
growth
low‐
demand
high‐
demand
strong
growth
Primaryaluminium
production(Mt)
1 11 17 20 10 16 20
Energyconsumption
(Mtoe)

3 16 25 28 14 20 26
DirectCO
2
emissions
(MtCO
2
)
4 14 21 22 12 16 22
Data available on the sector suggest that average energy intensity of primary aluminium
productioninIndiaiscurrentlyclosetotheworldaverage.Thereisstillroomtofurther improve
theenergyefficiencyandreduceCO
2
emissionsby:
 Implementingenergyefficiencymeasuresinbothrefiningandsmelting;
 Increasingtheuseoflow‐carbonelectricitysources;
 Increasingrecycling;and
 Introducingnewsmeltingtechnologies.
Transitiontoalow‐carbonenergyfuture
Atrulyglobalandintegratedenergytechnologyrevolutionisessentialtoaddresstheintertwined
challengesofenergysecurityandclimatechangewhilealsomeetingthegrowingenergyneedsof
thedevelopingworld.ForIndiatoplayitspartinrealisingtheglobalgoalsoftheBLUEscenario,it
willneed to
achieve rapideconomicdevelopmentoverthenext 40years withonly avery small
increaseinCO
2
emissions.Currentlythereisnoprecedentforsuchalow‐CO
2
developmentpath.
It will need to be based on meeting the increasing energy needs of India’s growing population
throughthewidespreaddeploymentofarangeofexistingandnewlow‐carbontechnologies.

©OECD/IEA2011 EnergyTransitionforIndustry:IndiaandtheGlobalContext

Page|15
In the industrial sector, the application of BATs and the development of breakthrough
technologieswillhelpinreducingemissions.CCSwillbeneededtokeeptheincreaseinemissions
inlinewiththeoverallreductiontargets.PriorityshouldbegiventoreducingtheCO
2
intensityin
the three largest industri al sectors (iron and steel, chemicals and petrochemicals and cement).
Specialattentionshouldfocusoncoal‐basedDRI,pulpandpapermakingandsmall‐scalecement
kilns.Therethreeareasofferinterestingopportunitiestoincreaseefficiencyandlimitthegrowth
inenergyconsumption.
Thechallenge
forIndiawillbetoachieveastrongeconomicgrowthwhileimprovingtheirenergy
security but without locking in high emissions. In identifying the step towards achieving this,
national technology roadmaps for the most promising low‐carbon technologies should be
developed. It will also require international collaboration on a number of
 initiatives. Enhanced
internationalco‐operationforresearching,developing,sharingandtransferringtechnologieswill
be required. International mechanisms for reducing carbon such as the Clean Development
Mechanism(CDM)willneedtoplayaroleindeployinglow‐carbonenergytechnologiesinIndia.
EnergyTransitionforIndustry:IndiaandtheGlobalContext ©OECD/IEA2011

Page|16
©OECD/IEA2011 EnergyTransitionforIndustry:IndiaandtheGlobalContext

Page|17
Introduction
Thefourthas sessmentreportoftheUnitedNations IntergovernmentalPanelonClimateChange
(IPCC), released in Novem ber 2007, concluded that global carbon dioxide (CO

2
) emissions must
bereducedbybetween50%and85%by2050(comparedto2000levels)ifglobalwarmingisto
belimitedtobetween2.0°Celsius(°C)and2.4°C.
Following the publication of the IPCC report, the urgency to address climate change rose
significantly.AgeneralguidelineisthatglobalCO
2
emissionsmustbehalved.
In 2010, the International Energy Agency (IEA) pub lished Energy Technology Perspectives 2010
(ETP2010)(IEA,2010).Thebookexplainshowtotransformtheglobalenergyeconomyoverthe
coming decades. A BLUE Scenario was developed to explore the energy and technology
implicationsofreducingglobalenergy
‐relatedCO
2
emissionsto50%ofthe2005levelsby2050.If
fullyimplemented,theBLUEScenariocouldlimitthelong‐termglobalmeantemperatureriseto
between 2.0°C and 3.0°C. The analysis indicates that beyond 2030, the end‐use sectors
(residential, services, industry and transport) have an increasingly  important role to
play in
reducing emissions (Figure1). Achieving such a significant reduction requires maximum energy
efficiencyworldwideandavirtuallydecarbonisedpowersector.
Figure1:GlobalCO
2
emissionsreductionbysectorintheBLUEScenario

Note: CO
2
 emissions savings from fuel transformation have been allocated to the transport sector and the reduction in CO
2
 from

electricitysavingshasbeenallocatedtoend‐usesector.
Source:IEA,2010.
Toachievea50%reductioninCO
2
emissionsgloballyby2050,ETP2010calculatedthat,basedon
a“least‐costapproach”,industrywouldhavetoreduceits overallemissionsto24% ofthe2007 
levelsby 2050. Thecontributionfrom different countries andindustrial sectorsvaries according
to their respective potential to reduce emissions through energy efficiency,
the availability of
fuel‐switching and recycling options, and their potential for deploying carbon capture  and
storage(CCS).
EnergyTransitionforIndustry:IndiaandtheGlobalContext ©OECD/IEA2011

Page|18
AspartoftheETP2010analysis,theBaselineandBLUEscenariospresentedinthepreviou s ETP
report(ETP2008,IEA,2008a)havebeenelaboratedtoincludemoreinformationonthefollowing
fourcountries/regions:China,India,OECDEurope
2
andtheUnitedStates. 
ThisworkingpaperfurtherdevelopstheanalysispresentedintheIndiachapterofETP2010and
provides insights on the implications of achieving deep energy and CO
2
 emission cuts in the 
industrial sector both for India and globally. It investigates
 from a Baseline Scenario the least‐
cost options to significantly reduce energy and CO
2
emissions in India’s industrial sector, while
enablingtheIndianeconomytocontinuetogrowandalleviateenergypoverty.Itdoes sofroma
techno‐economical perspective– buildingondetailed resource andtechnology data forIndia.It

also identifies the key technologies for India, as well as the energy and CO
2
 savings that would
resultfromtheirdeployment.Itanalysesthepossibilitiesforenergyefficiencyimprovementsand
CO
2
emissions reductionforthe fivemost energy‐intensiveindustrialsectorsincluding:iron and
steel; cement; chemicals and petrochemi cals; pulp and paper; and aluminium. Each sector
presentsareviewofrecenttrendsbasedonthelatestIEAindustryindicators
3
andananalysisof
thepotentialofexistingtechnologiestoincreaseenergyefficiencyandreduceCO
2
emissionsfor
Indiaandfortheworld.
Theintentisnot
toexami newhatkindofenergysavingsorCO
2
emissionsreductionIndiashould
makeinthefutureoranalysehowtoachievethedeployment oflow‐carbontechnologyinIndia,
or what technology transfer should look like and in which areas it would be needed. However,
discussionofgenerictechnologytransferissuesisincludedinETP2010.
Thepaper
comprisesthreechapters:
Chapter1pr ovidesanoverviewoftheresultsfortheindustrialsectorbothforIndiaandforthe
world.Theresults arepresentedforthetwodifferentvariantsoftheindustrialsectorincludedin
ETP2010–thelow‐andhigh‐demandcases.
Chapter 2 examines the
energy and emissions trends by sub‐industry, both for India and the
globaleconomy.Italsoprovidesinsightsintothefutureenergytechnologiesthatwillplaya part

inreducingemissionsforIndiaandatthegloballevel.
Chapter 3 presents an alternative case using stronger growth in gross domestic product
 (GDP)
and materials production for India. The “strong growth” case shows the implication of a strong
growth in India assuming the same level of research, development, demonstration and
deployment(RDD&D)andthecarbonpriceisthesameasintheBLUEScenario.

2
 OECD Europe includes: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland,
Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey and the United
Kingdom.
3
Inthecontextofthispublication,an“indicator”isdefinedasanyinformationthathelpstoexplainanenergysituationorachangein 
energy at the economy, industry, country or global level. Indicators in this paper include: energy intensity; use of a particular
technologyorfeedstock;efficiencyimprovement;and
savingspotential.
©OECD/IEA2011 EnergyTransitionforIndustry:IndiaandtheGlobalContext

Page|19
Chapter1.Industryoverview
In India, industrial  energy use
4
 reached 150million tonnes of oil equivalent  (Mtoe) in 2007
accounting for 38% of the country’s final energy used. From a global persp ective, India is the
fourth‐largest industrial energy consumer with a 5% share of total industrial energy use,
surpassedonlybyChina,theUnitedStatesandRussia(Figure
2).
Globally,industryaccountsforone‐thirdofalltheenergyusedandforalmost40%ofworldwide
carbon dioxide (CO
2

) emissions. In 2007, total final energy use in industry amounted to
3019Mtoe.Directemissions
5
ofCO
2
inindustryamountedto7.6gigatonnesofCO
2
(GtCO
2
)and
indirectemissions
6
to3.9 GtCO
2
.ReducingCO
2
emissionsfromindustrymustbeanessentialpart
of a global action to prevent dangerous climate change. The International Energy Agency  (IEA)
analysis shows that industry will need to reduce its current direct emissions by about 24% of
2007levelsifitistohalveglobalemissionsfrom2005levels
by2050.
Figure2:Industrialenergyusebyregion,2007

Note:Thisincludescokeovens,blastfurnacesandpetrochemicalfeedstock.
Sources:IEA,2009b;IEA,2009c.


The five most energy‐intensive industrial sectors (iron and steel, cement, chemicals and
petrochemicals, pulp and paper, and aluminium) accounted for 56%of India’s industrial energy
consumption in 2007. Globally, these five sectors accounted for 66% of industrial energy

consumption(Figure3).




4
Inthisdoc ument,ironan dsteelincludesenergyuseforcokemaking.Theenergydataforchemicalsandpetrochemicalsincludefeedstock.
5
Directemissionsincludefuelcombustionandprocess‐relatedCO
2
emissionsfromwithintheindustry.
6
Indirectemissionsareemissionsfromthepowergenerationsectorduetoelectricityuseinindustry.
EnergyTransitionforIndustry:IndiaandtheGlobalContext ©OECD/IEA2011

Page|20
Figure3:Industrialfinalenergyconsumptionbysub‐sectorinIndiaandintheworld,2007

Note:Thisincludescokeovens,blastfurnacesandpetrochemicalfeedstock.
Sources:IEA,2009b;IEA,2009c;IEAanalysis.
The final energy mix of Indian industry is dominated by coal and oil (Figure4). The share of
biomassuseinIndianindustryislargecomparedtoother countries.InIndia,industryconsumes
about45%ofallelectricitygeneratedinthecountry.Intheindustrialsector,electricityaccounts
for 15% of
 energy consumption. About 30% of the electricity used by industry is generated by
captivepowerplants.
7

Figure4:IndustrialfinalenergymixinIndiaandintheworld,2007


Note:Thisincludescokeovens,blastfurnacesandpetrochemicalfeedstock.
Sources:IEA,2009b;IEA,2009c.
Animportantshortcoming of the data on India’s energy use, asreportedin theIEA statistics, is
that over 22Mtoe of electricity, 28Mtoe of biomass and waste, and 7Mtoe of natural gas
consumption are not allocated to particular sub‐sectors but are  reported under “non‐specified
industry”.Overall,
about43%ofindustrialenergyuseinIndiaisreportedunderthenon‐specified

7
Captivestationsareunitssetupbyindustrialplantsfortheirexclusivesupply.
©OECD/IEA2011 EnergyTransitionforIndustry:IndiaandtheGlobalContext

Page|21
category(Table1).Furthermore,thestatisticsforbiomassconsumptionarehighlyuncertain.Asa
consequence,itisnotpossibletoperformdetailedenergyefficiencyanalysesfortheindustryas
awholebasedonthesedata.TheIEAhasdevelopedestimatesofIndia’senergyconsumptionby
compiling a mixture of top‐down
 and bottom‐up sources. The energy use as reported in IEA
statistics(IEA,2009c)aswellastheestimatesusedinthecurrentanalysisarepresentedinTable
1.Theseestimatesarebasedoncurrentproductionlevelsandenergyintensitiesfromarangeof
sources.Thereisstillaneed
tovalidatethesedata.
Table1:India’sindustrialmaterialsproductionandenergyuse,2007

Production
Reported
energy use
Reported
electricity use
Estimated

energy use
Estimated
electricity use
Estimated
direct CO
2

emissions

(Mt) (Mtoe) (Mtoe) (Mtoe) (Mtoe) (Mt CO
2
)
Industry sector 150 22 150 22 413
Iron and steel 53 33 38 3.3 151
Chemicals and
petrochemicals
27 27 48
Non-ferrous metals

0.4

Total aluminium
2 - - 2.9 1.6 3.8
Non-metallic minerals

11

Cement
170 - - 13 1.1 128
Pulp, paper and

printing
1.4

8.2
Paper and
paperboard
8 - - 1.4 0.4
Pulp
4 - - 1.7 0.3
Recovered paper
1 - - 0.1 0.0
Food and tobacco

10 n.a. n.a. n.a.
Textile and leather 1.3 n.a. n.a. n.a.
Other

2 66 15 74
Non-specified industry 65 22
Notes:Iron andsteelincludesenergyuseforcoke makingand theenergydata forchemicalsandpetrochemicals include feedstock.
Thetablehasbeencompiledfromamixtureoftop‐downandbottom‐upsourcesandsothetotalsmaynotmatch.
Sources:Worldsteel,2009;USGS,2009a;IAI,2009a;IPMA,2010a;
IEA,2009a,b,c;IEAanalysis.
Energy and CO
2
 savings potential in India, based on best
availabletechnologies
8

InordertoquantifytheenergyandCO

2
savingspotentialbyapplyingbestavailabletechnologies
(BATs), the IEA developed a top‐down approach. In this approach the theoretical minimum
energyconsumptioniscalculatedbyassumingeachprocessinasectorwouldapplyBAT(orbest
practice technology [BPT] in the case of the chemical and petrochemical sector). In
order to
assess the potential reduction inenergy and CO
2
 emissions, the estimatedenergy consumption
valuesarecomparedtothereportedactualenergyconsumption.

8
 Defining best available technology (BAT) requires consideration of bothtechnical and economic factors. In the IEA’s analysis, BAT
designation in relation to energy efficiency in a  particular industry has been drawn from a range of sources, including technical
documentation produced for the European Union Directive 96/61/EC concerning integrated pollution prevention
and control, and
other technical and peer reviewed literature. In contrast to BAT, BPT is  a term that applies to technologies and processes that are
currentlydeployed.BATcould,inmanycases,beidenticaltoBPT.Inothercases,anewtechnologymayhavejustemergedbutisnot
yetdeployed.
Ifthisisthecase,theBATenergyefficiencymaybebetterthanBPT.
EnergyTransitionforIndustry:IndiaandtheGlobalContext ©OECD/IEA2011

Page|22
Asisthecaseinmostcountries,significantenergyandCO
2
savings inIndianindustryarepossible
when BATs are implemented. It is estimated that applying BATs in the five industrial sectors
analysed(ironandsteel,pulpandpap er,chemicalsandpetrochemicals,cementandaluminium)
couldreduceIndia’sfinalenergyuse bybetween10%and25%. TotalestimatedsavingsinIndia
could amount to 17Mtoe per year, which is equivalent to 11% of the industrial energy

consumptionin2007and4%ofIndia’stotalenergyconsumption.
The BAT analysis does not take into account the potential improvements in energy efficiency
fromindustrialcaptivepowerplants.Itisimportanttoanalysethe
energyefficiencypotentialof
those captive plants to assess the overall reduction potential. However, the peculiarities of
India’sindigenousresourcesandindustry,suchasthehighsilica contentinironore,low‐quality
coalandtheexistenceofnumeroussmall‐scaleplants,meansthatthesesavingsmightbeharder
to
achieveand maybe overstated. Furthermore,it will notbe possible toachievethese savings
immediately. The rate of implementing BATs in practice depends on a number of factors,
includingcapitalstockturnover,relativeenergycosts,rawmaterialavailability,ratesofreturnon
investmentandregulation.
IEAscenariosforIndia’sindustrialsector
Worldwide implementation of BATs is just the first step in improving energy efficiency and
makingdeepcutsinCO
2
emissionsinindustry.Adetailedmodellingframewor kisusedtoanalyse
the long‐term potential for new technologies to improve energy efficiency and reduce CO
2

emissionsandtoexaminedifferentscenariostotheyear2050.
IfIndia follows atraditionalgrowth modelwithatransitionfromanagriculturalsocietyto ahighly
urbanised society, the need for materials will be enormous. This is reflected in the demand
projecti onsfor2030and2050(Table2)and 
raisesquestionsreg ardingtheavailabilityofresources.
Table2:India’smaterialsdemandinkilogramspercapita(kg/cap)

2007

2030

2050

low-demand high-demand low-demand high-demand
Primary aluminium 0.9 3.5 5.9 6.3 8.8
Cement 151 325 364 400 460
Chemicals and petrochemicals

HVC
9 17 27 28 50
Methanol
0.1 0.4 0.4 0.6 0.7
Ammonia
12 16 19 19 23
Iron and steel 49 150 175 200 250
Paper and paperboard 8 23 39 43 76
Industrial materials production, energy use and CO
2
 emissions are all projected to rise. As the
production of materials increases, industrial energy consump tion is expected to reach between
524Mtoeand634Mtoein2050undertheBaselineScenario(Table3).
©OECD/IEA2011 EnergyTransitionforIndustry:IndiaandtheGlobalContext

Page|23
Table3:India’stotalfinalenergyusebyindustry, Mtoe
2007

Baseline – 2050 BLUE – 2050
low-demand high-demand low-demand high-demand
Aluminium 3

16 25 14 20
Cement 13

42 48 49 55
Chemicals and petrochemicals 27

83 126 74 100
Iron and steel 38

173 211 122 153
Pulp and paper 3

19 33 17 31
Other industries 66

191 191 126 134
Total 150

524 634 402 624
Sources:IEA,2009c;IEAanalysis.
The Baseline Scenario considers all policies implemented to date. A BLUE Scenario, in which global
industrial energy‐related emissions would be 24% lower by 2050 compared to 2007 levels, has been
investigatedwithmaximumuse ofenergyefficiency,highlevelsofrecycling,greatersharesofbiomassuse
andtheimplementationof
carboncaptureandstorage(CCS)intheironandsteel,cement,chemical,and
pulpandpapersectors.IntheBLUE ScenarioforIndia,finalenergyuseis approximately22%lowerthanin
the Baseline Scenario, but still between 2.7 and 3.3times higher than the 2007 level. Because the
product ion
growthfarexceedsthesavingspotentialfromenergyefficiencyandotherreductionoptions,in

allscena riosthefinalenergyusein2030and2050willbesignificantlyhigherthantoday.
Box1:TheETP2010scenarios
IntheBaselineScenario forIndia,totaldirectindustrialCO
2
emissionsareprojectedtorisefrom
413milliontonnes ofCO
2
(MtCO
2
)in 2007 tobetween1568 Mt CO
2
and 1852MtCO
2
in  2050
(Table 4). In the BLUE Scenario, total industrial CO
2
 emissions rise by a much lower rate to
TheETP2010BaselineScenariofollowstheReferenceScenario,outlinedintheWorldEnergyOutlook
2009,to2030,andthenextendsitto2050.TheBaselineScenarioassumesthatgovernmentswillnot
introduce new energy and climatepolicies. In contrast, the BLUE Scenario(with several variants) is
target‐orientated:itsetsthegoalofhalvingglobalenergy‐relatedCO
2
emissionsby2050(compared
to 2005 levels). It examines the least‐cost means of achieving that goal through the deployment of
existingandnewlow‐carbontechnologies.
These scenarios are not predictions. They are internally consistent analyses of the least‐cost
pathways that may be available to meet energy policy objectives, given a certain set of optimistic
technologyassumptions.
For the industry sector, given the recent global economic crisis and uncertainties about projecting
long‐term growth in consumption of materials, a low‐demand and a high‐demand case have been

developedforeachindustryandforallcountriesanalysed.Inthefivesectorscoveredinthisanalysis,
the difference in materials demand between the low‐ and high‐demand cases to 2050 varies by
between 20%and 50%. As both the BLUE low‐ and high‐demand scenarios aim to achieve the same
levelof CO
2
emissionsin 2050,agreater reduction inemissions levels is neededin the high‐demand
casethaninthelow‐demandone.As aresult,costsarealsohigherinthehigh‐demandcase.
The industrial scenarios take an optimistic view of technology development and assume that
technologies are adopted as they become cost‐competitive. The analysis does not assess the
likelihoodoftheseassumptionsbeingfulfilled.ButitisclearthatdeepcutsinCO
2
emissionscanonly
beachievedifallcountriesplaytheirpart,bothinseekingtoachievethatoutcomeandindeveloping
anddeployingthetechnologiesthatcanhelptobringitabout.