For several years, a steady wave of sustainability has been spreading across diverse domains globally, including India. One sector influenced by the shift towards sustainability is the chemical industry, covering bulk chemicals, specialty chemicals, agrochemicals, polymers and petrochemicals.

Industry Overview

With more than 80,000 commercial items, India’s chemical industry employs more than 2 million people and represents 2.5% of the universal chemical sales with exports to 175-plus nations. The country is also the world’s sixth-largest chemical producer and fourth-largest in agrochemicals, following the US, Japan and China. Valued at about $220 billion in 2023, the sector is projected to touch $300 billion this year.

Considering its advantages, the National Chemical Policy intends to transform India into a global chemical manufacturing hub. This is important as the chemical industry is associated with high carbon emissions and environmental pollution. Stringent environmental regulations and the consumer demand for sustainable products and practices are nudging chemical companies to deploy cleaner technologies and renewable sources of energy to reduce their carbon footprint.

Range of Green Products and Practices

Consequently, the industry is turning increasingly to green practices and making investments in bio-based, renewable chemicals. This is encouraging greater research and innovation in fields such as biodegradable plastics, energy-efficient processes, renewable feedstocks and water treatment solutions. The focus on circular economy principles covers reduction in waste, recycling and resource efficiencies.

Another promising element is bio-based plasticizers. Functioning as critical additives, these eco-friendly plasticizers are enhancing the flexibility, functionality and durability of plastics by restricting their environmental footprint. Unlike conventional plasticizers such as phthalates that could contain harmful chemicals, bio-based plasticizers are an eco-friendly alternative derived from renewable sources or customized to lower both toxicity and ecological risks.

Policies Promoting Sustainability

The Government of India has introduced varied measures to promote sustainable practices. The Green Chemistry initiative from the Ministry of Chemicals and Fertilizers encourages the deployment of green technologies and sustainable processes. Similarly, the National Chemical Policy promotes innovation in the sector by fostering a favourable environment to boost international investments.

There are also universal initiatives such as Responsible Care (RC) that focus on a verifiable compliance model linked to aspects of products, community, safety and sustainability. The Indian Chemical Council advances RC efforts in India. Such initiatives are the need of the hour to achieve net-zero targets by 2070 as the chemical industry accounts for around 5% of global GHG (greenhouse gas) emissions. Moreover, consumers, investors and other stakeholders now demand eco-friendly products based on sustainable manufacturing, making sustainable chemical practices both a moral and business imperative.

Addressing the Gaps

While most entities have shifted partially or wholly to sustainable practices, more institutional measures are required to accelerate the pace of transition. In context, green finance can play a major role. However, green finance comprises barely 25% of the requirement. To address this situation, the government must create a green taxonomy ecosystem that establishes a clear, standardised classification for green funds.

This will require implementing an integrated MRV (measurement, reporting and verification) system that tracks these finances, pinpoints specific constraints and highlights spheres needing more funds and greater transparency. Coordinated policy interventions that incentivise new-age technology while mainstreaming supply chains could spur such investments in segments that are lagging at present.

Given that the industry remains the largest industrial energy user and the third-largest sub-segment vis-à-vis direct carbon emissions, the role of decarbonisation via energy efficiency measures must also be encouraged. This could involve the adoption of bio-based, low-carbon feedstocks, electrifying high-temperature procedures and using green hydrogen. Further, CCUS (carbon capture, utilisation and storage) solutions can be pivotal in curbing CO₂ emissions. Such mechanisms will reduce carbon footprints and lower operational costs by stabilising power grids.

Ultimately, the long-term success of chemical manufacturing in the country will be contingent on industry players integrating a series of measures. These will include renewable feedstocks, holistic decarbonisation efforts and circular economy practices. If the right boxes are ticked, the industry should be well on course to achieve its net-zero commitments much before 2070 even as it emerges as a key player in the global chemical landscape.