Estimated Reading Time: 9-10 minutes

Key Takeaways

• NITI Aayog released decarbonisation roadmaps for cement, aluminium, and MSME sectors on January 22, 2026, to achieve net-zero emissions by 2070.
• Cement sector targets 80-85% GHG emission reduction by 2070 through refuse-derived fuels, clinker substitutes, and carbon capture technologies.
• Aluminium production is projected to surge from 4 million tonnes (2023) to 37 million tonnes (2070), requiring transition to renewable energy, nuclear power, and CCUS.
• MSMEs—accounting for 36% of manufacturing output—emitted approximately 135 million tonnes of CO2 equivalent in 2022 alone.
• A new National Project Management Agency (NPMA) is proposed to coordinate MSME green transition through cluster-based implementation.
• The roadmaps address India’s vulnerability to EU’s Carbon Border Adjustment Mechanism (CBAM) on carbon-intensive exports.
• Three-phase aluminium decarbonisation: short-term (until 2030) renewable energy adoption; medium-term (2030-2040) nuclear power; long-term (beyond 2040) carbon capture integration.

Table of Contents

• Background and Context
• Strategic Rationale and Policy Drivers
• Cement Sector Decarbonisation Strategy
• Refuse-Derived Fuels (RDF)
• Clinker Substitution
• Carbon Capture, Utilisation and Storage (CCUS)
• Aluminium Sector Decarbonisation Strategy
• Short-Term Phase (until 2030)
• Medium-Term Phase (2030-2040)
• Long-Term Phase (beyond 2040)
• MSME Green Transition Framework
• Institutional Implementation: National Project Management Agency
• Global Trade and Competitiveness Implications
• Alignment with National Development Goals
• Timeline of Decarbonisation Initiatives
• Quotes on India’s Green Transition

India’s Decarbonisation Roadmaps for Key Industries

On January 22, 2026, India’s government think tank NITI Aayog released three comprehensive decarbonisation roadmaps. These roadmaps target the cement, aluminium, and micro, small, and medium enterprises (MSME) sectors. This initiative is designed to guide the country toward its ambitious net-zero emission target by 2070.

The roadmaps establish sector-specific emission reduction strategies. These are carefully aligned with India’s Paris Agreement commitments. They also incorporate new greenhouse gas emission intensity reduction targets set for 2026-27. These initiatives aim to support India’s economic expansion goals, including increasing manufacturing’s GDP share from 17% to 25% by 2047. Simultaneously, they seek to reduce carbon footprints across high-emitting industries. Key recommendations include transitioning to renewable energy, scaling carbon capture technologies, and establishing a national project management agency for MSME implementation. The roadmaps also position India to navigate the European Union’s Carbon Border Adjustment Mechanism (CBAM) by reducing carbon intensity in export-oriented sectors.

Background and Context

India’s government think tank, NITI Aayog, released three decarbonisation roadmaps on January 22, 2026. This represents a coordinated policy response to the country’s climate commitments and economic expansion goals. This initiative follows India’s obligations under the Paris Agreement. It also reflects the government’s recent decision to set specific greenhouse gas emission intensity reduction targets for traditionally high-emitting sectors including aluminium, cement, petrochemical, and textile, with targets to be achieved by 2026-27 compared to a 2023-24 baseline. The roadmaps are part of India’s broader aspiration to become a “Viksit Bharat” (developed India) by 2047. This includes achieving a USD 30 trillion economy while simultaneously reaching carbon neutrality by 2070.

Strategic Rationale and Policy Drivers

The decarbonisation initiative addresses several interconnected challenges. First, India’s domestic demand for aluminium is projected to increase sharply from 4 million tonnes in 2023 to over 37 million tonnes by 2070. This is almost three times the projected global growth rate. Second, MSMEs, which represent over 36% of India’s manufacturing output, rely heavily on fossil fuels for energy and process requirements. They collectively generated approximately 135 million tonnes of carbon emissions (MtCO2e) in 2022 alone.

Third, India faces external trade pressures from the European Union’s Carbon Border Adjustment Mechanism (CBAM). This mechanism imposes tariffs on carbon-intensive goods entering the 27 EU nations. If India does not decarbonise these sectors, export-oriented products will incur tariff burdens that could damage the country’s international competitiveness.

According to B V R Subrahmanyam, CEO of NITI Aayog, these roadmaps serve as “reference manuals” for India to achieve the unique dual objective of becoming a developed country while simultaneously decarbonising industry. Suman Bery, vice chairperson of NITI Aayog, emphasized that MSMEs are critical members of domestic and international supply chains. He prioritised technology adoption, access to affordable finance, skilling, regulatory reforms, and increased female workforce participation to enhance sector competitiveness.

Cement Sector Decarbonisation Strategy

The cement sector roadmap proposes reducing carbon intensity from 0.63 tCO₂e per tonne of cement to approximately 0.09-0.13 tCO₂e per tonne by 2070. This represents an 80-85% reduction in greenhouse gas emissions. The roadmap identifies three primary solutions:

• Refuse-Derived Fuels (RDF): The strategy prioritizes increasing the usage of RDF from municipal solid waste to substitute thermal heating that currently relies on coal. This reduces both emissions and waste disposal burdens.
• Clinker Substitution: The roadmap recommends increased usage of supplementary cementitious materials and clinker substitutes. This reduces process emissions associated with clinker production, which is the most carbon-intensive component of cement manufacturing.
• Carbon Capture, Utilisation and Storage (CCUS): Scaling up CCUS technologies is proposed to capture CO2 from process emissions in the cement industry, enabling long-term deep decarbonisation.

The roadmap also calls for effective implementation of carbon credit trading schemes. These schemes will enable market-based incentives for emissions reductions across the sector.

Aluminium Sector Decarbonisation Strategy

The aluminium sector roadmap identifies a three-phased approach to reduce the sector’s carbon footprint in response to projected demand increases:

• Short-Term Phase (until 2030): Transition to renewable energy-round-the-clock (RE-RTC) power and enhanced grid connectivity. This phase emphasizes immediate adoption of renewable electricity sources to displace coal-based power generation.
• Medium-Term Phase (2030-2040): Adoption of nuclear power to provide consistent, low-carbon baseload electricity for aluminium smelting operations.
• Long-Term Phase (beyond 2040): Integration of Carbon Capture, Utilisation and Storage (CCUS) with captive coal-based generation for residual emissions management.

This phased approach reflects the sector’s need for reliable, continuous power supply while transitioning from fossil fuels to zero-carbon energy sources.

MSME Green Transition Framework

The MSME roadmap focuses on three key operational levers for green transition:

• Energy-Efficient Equipment Deployment: Modernising production facilities with energy-efficient machinery to reduce per-unit energy consumption.
• Alternative Fuels Adoption: Transitioning from fossil fuel-based heating and processing to cleaner energy alternatives.
• Green Electricity Integration: Incorporating renewable electricity into MSME operations to displace coal and natural gas consumption.

NITI Aayog recommends that transitioning to greener operations enables these enterprises to reduce carbon footprints, conserve resources, and minimize waste. This also enhances productivity and cost-efficiency, creating economic co-benefits alongside environmental gains.

Institutional Implementation: National Project Management Agency

To operationalise the MSME green transition, NITI Aayog proposes establishing a National Project Management Agency (NPMA). This agency would function as an independent consultative and advisory entity. The NPMA would be monitored through an inter-ministerial committee. It would be tasked with driving on-ground implementation by closely working with MSME clusters through an effective and transparent selection process. The agency would identify interested MSME clusters and industrial associations by floating expressions of interest (EoI) that detail cluster selection criteria. MSME clusters would be encouraged to form Special Purpose Vehicles (SPVs) to participate in the green transition programme.

NITI Aayog’s call emphasises supporting MSMEs in terms of technology upgradation, market access, and green transition to fulfil “Viksit Bharat” goals by 2047.

Global Trade and Competitiveness Implications

The decarbonisation roadmaps directly address India’s vulnerability to the EU’s Carbon Border Adjustment Mechanism (CBAM). By reducing carbon footprints in manufacturing processes for aluminium, cement, and other GHG-intensive goods, India can minimize tariff burdens on exports to EU nations. An official from India’s environment ministry noted that the roadmaps will “help India navigate through the European Union’s carbon border tax on GHG intensive goods such as aluminium and cement by reducing carbon footprints in the manufacturing processes of these sectors.” This positions India’s export-oriented industries to remain competitive in increasingly carbon-conscious global markets.

Alignment with National Development Goals

The roadmaps are explicitly designed to support India’s broader economic objectives. Increasing the manufacturing sector’s share in GDP from 17% to 25% is identified as a key national objective. This is central to India’s developmental goals and aspirations to achieve a USD 30 trillion economy by 2047. The decarbonisation strategies enable this industrial expansion while simultaneously meeting climate commitments. This demonstrates that economic growth and environmental sustainability are not mutually exclusive objectives in India’s development model.

Timeline of Decarbonisation Initiatives

• 2023: Baseline year established for greenhouse gas emission intensity reduction targets; aluminium production stands at 4 million tonnes; MSMEs generated approximately 135 million tonnes CO2e emissions.
• January 22, 2026: NITI Aayog releases three decarbonisation roadmaps for cement, aluminium, and MSME sectors; government sets GHG emission intensity reduction targets for high-emitting sectors to be achieved by 2026-27.
• 2030: Target completion date for short-term aluminium sector decarbonisation phase: transition to renewable energy-round-the-clock power and enhanced grid connectivity.
• 2040: Target completion date for medium-term aluminium sector phase: adoption of nuclear power for baseload electricity supply.
• 2047: India’s aspiration date for becoming ‘Viksit Bharat’ (developed India) and achieving USD 30 trillion economy with manufacturing representing 25% of GDP.
• 2070: India’s net-zero carbon neutrality target; cement sector targets reduction of carbon intensity from 0.63 to 0.09-0.13 tCO2e per tonne (80-85% reduction); aluminium production projected to reach 37 million tonnes; full integration of CCUS technologies in long-term decarbonisation phases.

Quotes on India’s Green Transition

“These roadmaps will not only help these sectors reach their emission intensity reduction targets but also contribute immensely towards achieving India’s net-zero goal (carbon neutrality) of 2070.”

“These roadmaps would serve as reference manuals for India to achieve its unique goal of becoming a developed country as well as decarbonising the industry simultaneously.”

“By using these three solutions, the Indian cement sector may reduce 80-85 per cent GHG emission by 2070.”

“Transitioning to greener operations enables these enterprises to reduce their carbon footprint, conserve resources, and minimize waste, while enhancing productivity and cost-efficiency.”

“The NPMA to be an independent consultative and advisory entity, to be monitored through an inter-ministerial committee and shall be responsible for driving the on-ground implementation of the programme by closely working with MSME clusters.”

“If India does not take steps to decarbonise these sectors, they will attract a tariff burden on such products and impact the country’s exports.”

Frequently Asked Questions (FAQ)

What is the specific timeline and funding mechanism for establishing the National Project Management Agency (NPMA) for MSME green transition?

The NITI Aayog proposal for the NPMA suggests it will be an independent consultative and advisory entity. While the exact timeline and funding mechanisms are not explicitly detailed in the roadmaps, its establishment is critical for driving on-ground implementation through MSME clusters.

How will the roadmaps be enforced or incentivised across the cement, aluminium, and MSME sectors? Are there penalties for non-compliance or subsidies for early adoption?

The roadmaps are designed to guide the transition, aligning with India’s Paris Agreement commitments and new GHG emission intensity reduction targets. While specific enforcement mechanisms or penalties are not detailed, the mention of carbon credit trading schemes suggests market-based incentives. Avoiding EU CBAM tariffs also serves as a strong economic incentive for export-oriented sectors.

What is the estimated total investment required to implement all three decarbonisation roadmaps across these sectors?

The roadmaps emphasize technological upgrades and transitions to cleaner energy sources. A precise total investment figure is not provided in the publicly available summaries. Such large-scale transitions typically require substantial capital deployment across industries.

How will technology transfer and access to carbon capture, utilisation and storage (CCUS) technologies be facilitated, particularly for MSMEs and smaller cement producers?

The roadmaps highlight the importance of technology adoption. For MSMEs, the proposed NPMA is expected to play a crucial role in coordinating and facilitating access to technologies. For larger sectors like cement, scaling up CCUS implies significant investment and potentially international collaborations for technology transfer.

What specific role will international finance institutions and climate funds (e.g., Green Climate Fund) play in supporting India’s decarbonisation implementation?

The roadmaps focus on domestic policy and strategy. While not explicitly mentioned in the summaries, international finance and climate funds often play a role in supporting large-scale national decarbonisation efforts in developing countries through investments and technical assistance.

How will the roadmaps address regional variations in infrastructure readiness, renewable energy availability, and industrial capacity across different Indian states?

The MSME roadmap emphasizes a cluster-based implementation approach, which suggests a recognition of regional variations. This localized strategy aims to address specific needs and capacities within different industrial clusters across India.

What mechanisms will ensure just transition and worker protection in these sectors as fossil fuel-dependent processes are phased out?

The roadmaps highlight skilling and increased workforce participation, particularly for MSMEs. Ensuring a just transition would involve retraining programs, social safety nets, and economic diversification strategies to support workers affected by the shift away from fossil fuel-dependent processes.

Have detailed cost-benefit analyses been conducted for each sector, comparing the transition costs against long-term economic and trade benefits?

While the roadmaps cite economic co-benefits like enhanced productivity and cost-efficiency, and the avoidance of CBAM tariffs, detailed, publicly available cost-benefit analyses for each sector are not specified in the given information. Such analyses are crucial for large-scale policy implementation.

How frequently will these roadmaps be reviewed and updated as technology and climate science evolve?

The roadmaps serve as “reference manuals” for a long-term transition towards 2070. Regular review and updates would be essential given the dynamic nature of technology and climate science, but a specific frequency for these updates is not outlined in the provided content.

What are the specific emission reduction targets for the interim period (2026-2070), beyond the 2026-27 baseline and 2070 end-target?

The roadmaps outline broad targets like the 2026-27 intensity reduction and the 2070 net-zero goal, along with phased approaches for sectors like aluminium. Detailed interim targets for specific years between 2026 and 2070 are not explicitly stated in the summaries but would be crucial for tracking progress.