In a significant step toward addressing climate challenges and safeguarding export competitiveness, NITI Aayog has unveiled comprehensive decarbonisation roadmaps for India’s cement and aluminium sectors. These two industries are among the highest contributors to industrial carbon emissions and are also key export segments that could be affected by the European Union’s Carbon Border Adjustment Mechanism.
The Carbon Border Adjustment Mechanism, introduced by the European Union, is designed to impose a carbon cost on imports of high emission goods such as cement, aluminium, iron and steel, and fertilisers entering its 27 member countries. The policy aims to prevent carbon leakage by ensuring that imported goods face similar emission costs as products manufactured within the EU. For countries like India, which rely on carbon intensive production processes, this mechanism could lead to higher tariffs on exports if emission levels remain unchanged.
NITI Aayog’s newly released roadmaps outline a phased strategy for reducing emissions in the cement and aluminium sectors through cleaner technologies, energy efficiency improvements, and increased use of renewable energy. The think tank has emphasised that these measures will not only help industries adapt to evolving global trade regulations but also align with India’s climate commitments under the Paris Agreement.
The cement sector, which contributes significantly to industrial emissions due to clinker production and fossil fuel usage, is expected to benefit from strategies such as alternative fuels, low carbon cement formulations, and carbon capture technologies. Similarly, the aluminium sector, known for its high electricity consumption, is being encouraged to shift toward renewable power sources and adopt energy efficient smelting processes.
According to policy experts, failure to decarbonise these sectors could result in Indian exporters facing increasing cost pressures under the EU’s carbon tax regime. This could reduce the competitiveness of Indian products in European markets over time. By adopting the proposed roadmaps, industries may gradually lower their carbon footprint and reduce exposure to such trade barriers.
NITI Aayog has also indicated that these roadmaps are not limited to just two sectors. They are intended to serve as reference frameworks for decarbonising other carbon intensive industries in the future. This sector wise approach is seen as a practical pathway to achieving India’s long term target of carbon neutrality by 2070, while balancing economic growth and industrial development.
Industry stakeholders have welcomed the initiative, noting that clear policy guidance can help businesses plan investments in clean technologies with greater certainty. However, they have also highlighted the need for financial support, innovation incentives, and infrastructure development to ensure successful implementation.
Overall, the decarbonisation roadmaps mark an important policy intervention as India navigates the intersection of climate responsibility and global trade dynamics. By proactively addressing emission challenges, the country aims to strengthen its position in international markets while advancing its domestic climate action agenda.
