Europe and India: Equal Partners in the Path to Become Net Zero

Europe and India: Equal Partners
in the Path to Become Net Zero

Vincent van Noord | 5th Jan 2022

Climate change is one of the most pressing global challenges facing the world today. It is an issue that affects every person from all walks of life. As a root cause, it drives natural disasters, environmental degradation, rising sea levels and much more. Extreme weather conditions disrupt harvests, deplete fisheries, erode livelihoods and spur infectious diseases. This has the potential of leaving millions of people without food or income.

Acknowledging and responding to the challenge requires collective will and a workable plan.. Comprehensive-, aligned- and integrated strategies to address social, economic and environmental consequences are imperative.

A significant milestone was achieved in 2015. 195 parties to the UN Framework Convention on Climate Change endorsed the Paris Agreement. Signatories pledged to curb emissions to minimise the rise in temperatures and strengthen capacities to manage climate risks.

This Paris Agreement was followed by the 26th United Nations Climate Change Conference (COP26) in held in late 2021. The Summit has highlighted that there is an urgent need to ensure net-zero global emissions by mid-century, to keep the 1.5 degrees global warming limit achievable .

Europe Leading the Way:

For its part, the European Union has committed to net-zero emissions by 2050 and is already leading the way in adopting new technologies, solutions, policies and frameworks that can facilitate this goal.

By 2030, 64% of the European Union’s emissions reduction would be achieved by large-scale electrification and increase in energy efficiency, accounting for 47% and 17%, respectively. Demand-side measures and circularity would reduce emissions an additional 15%. Hydrogen would contribute another 13%. The remainder would come from ramping up the use of biomass, land-use changes, and other innovations.

Europe: India’s Equal Partner:

In the fight against climate change, the European Union and India have already undertaken several important steps to increase cooperation. Through the EU-India High-Level Dialogue on Climate Change held on April 28th 2021 , both sides have signaled their intention to increase collaboration on ‘the deployment of renewable energy, promotion of energy efficiency, collaboration on smart grids and storage technologies, as well as on modernizing the electricity market’ . Other areas of cooperation revolve around the increased adoption of wind energy and cooperation in the field of green and blue hydrogen for the mobility sector.

One of the key outcomes of the EU-India Leaders’ Summit, which took place in May 2021, was the renewed focus on the connectivity partnership between both sides, particularly in terms of climate and environmental sustainability .

India is already leading the way in terms of building installed renewable power capacity globally, and projects to have renewable sources of energy contributing 50% to its installed power generation capacity by 2030, by which time it aims on reducing total projected carbon emissions by 1 billion tons .

Furthermore, the European Union is an active stakeholder by being a strategic partner of the International Solar Alliance (ISA), launched by India and France, following the Paris Climate Conference of 2015. The EU has engaged with ISA on several concrete actions, such as the development of the ISA’s collaborative and knowledge platform, the development of financing mechanisms for increasing solar power and scaling up the mobilisation of private capital towards environmentally sustainable investments .

Financing Sustainability

India’s climate-investment potential between 2018 and 2030, required to meet the nationally determined contributions (NDC) targets undertaken by Government, is estimated to be more than EUR 2.6 trillion. Green Buildings and EVs are expected to be the key areas requiring about 66% (EUR 1.7 trillion) of overall estimated market.

Clearly, financing for projects that can help India reach its net zero carbon emissions targets is key. I am pleased to note that the European Union and various European Development Finance Institutions (DFIs), banks and NBFCs are supporting India on various projects related to clean energy, energy efficiency and urbanization.

For instance, in 2021, the State Bank of India (SBI) and the European Investment Bank (EIB) agreed to back an initiative of financing EUR 100 million for climate action and sustainability in India. Additionally, the European Union, in partnership with India's Ministry for New and Renewable Energy (MNRE), has launched the Grid Connected Rooftop and Small Solar Power Plants programme (GCRT) to support India's goal of installing 40,000 MWs of photovoltaic rooftop solar systems by 2022 .

Additionally, the Connectivity Partnership announced following the EU India Leaders’ Summit of 2021 has also sought to streamline and align the European Investment Bank’s (EIB) and national EU DFIs mechanisms for the financing of projects in India.

The European Investment Bank (EIB) has already financed EUR 3.81 billion for sustainable investment projects in India, with the majority dedicated towards renewable energy and sustainable urban mobility .

The Way Forward

The European Union and India are already entertaining a variety of Policy Dialogues, and many commitments are dove tailed by projects such as the Resource Efficiency Initiative (REI), the Clean Energy & Climate Partnership (CECP), the India EU Water Partnership (IEWP), the India EU Urban Partnership (IEUP) and the International Urban and Regional Collaboration (IURC) – all looking at sustainability, green technology and innovative solutions, at a technical, business and project level. In consequence, in many cases, the activities drive towards the net zero target. The aim of these Policy Dialogues is to strengthen cooperation on policies that relate to the implementation of ways to fight climate change and ensuring the United Nations’ SDG are met.

As mentioned, strengthening of policy cooperation must be dovetailed with increasing opportunities for EU-India business cooperation in these sectors. At the European Business and Technology Centre (EBTC), we seek to strengthen the EU-India business corridor through actionable intelligence on concrete project opportunities. On a daily basis we strive to make this happen through strategic collaborations, the development of sectoral clusters and dedicated programmes backed by our body of knowledge with a strong focus on sustainability, innovation, green technology and internationalisation.

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