Switch to Green Electricity and Steel Could Reduce India’s Auto Industry Emissions by 87%: CEEW

A new study by the Council on Energy, Environment and Water (CEEW) suggests that India’s automobile sector could reduce its manufacturing-related emissions by up to 87 per cent by 2050 through the adoption of renewable electricity and low-carbon steel. As the world’s third-largest auto industry, India is seeing growing interest among major manufacturers in electric and hybrid vehicle production, alongside formal commitments to reduce emissions through initiatives like the Science-Based Targets initiative (SBTi).

While many automakers have set targets to lower emissions from their factories and vehicles, upstream supply chain emissions—primarily from materials like coal-intensive steel and rubber—remain a major contributor, accounting for over 83 per cent of the sector’s emissions. The CEEW report tracks emissions under three scopes: Scope 1 (direct manufacturing emissions), Scope 2 (electricity use), and Scope 3 (supply chain emissions), highlighting that the largest reductions must come from upstream sources.

The study uses the Global Change Analysis Model to project future emissions. Under a business-as-usual scenario, vehicle production could grow from 25 million in 2020 to 96 million by 2050, with emissions doubling to 64 million tonnes of CO₂ despite falling per-unit intensity. Steel is expected to remain the largest contributor under this scenario.

If both OEMs and suppliers shift to green inputs, emissions could fall to 9 million tonnes annually. This would involve 100 per cent green electricity for OEMs and a shift to hydrogen-based steelmaking for suppliers, along with greater use of scrap steel and renewable power for rubber production.

CEEW experts suggest that clean manufacturing must be treated as a strategic business move, not just a climate goal. The study also stresses that hybrid vehicles may serve as a short-term bridge but will need to give way to zero-emission models in the long run. A dual approach—accelerating electric vehicle adoption and decarbonising manufacturing—is recommended to align the sector with India’s net-zero ambitions.