sectoral economic costs and benefits of ghg mitigation - IPCC

Somnath Bhattacharjee
technological obsolescence, information deficiency and poor management practices to nonavailability
of credits. There are some highly energy intensive sub sectors where the cost of
energy forms a sizeable proportion of the total production cost and offers tremendous scope for
energy efficiency improvement and pollution reduction through technology up gradation.
As is clear from the preceding discussion, the energy intensive industries in India offer huge
potential for energy saving with a corresponding reduction in global as well as local emissions.
The costs associated to affect this change and the associated benefits are, however, sector
specific. In this paper, for illustrative purposes, three case studies are presented, primarily based
on the research findings at TERI. These case studies pertain to two energy intensive sectors
under large-scale industry namely pulp and paper and cement, and one energy intensive smallscale
industry sector - the case iron foundry industry.
Case Study I Pulp and paper industry
The pulp and paper industry is one of the key industrial sectors in India, and is the country’s sixth
largest consumer of energy. The energy cost presently accounts for about 25% of the total cost of
manufacturing, and is steadily rising every year. The average size of paper mills in India is only
45tpd, as against 900tpd in Europe and North America. As against a total installed capacity of 4.3
million tonnes (in 96/97), the production was only 3.26 million tonnes, on account of low
capacity utilisation.
Energy performance
The main fuel used by the industry is coal, which accounts for about 70% of the total energy use.
The primary energy consumption in the sector rose from 45.9 PJ in 1981–82 to 74.5 PJ in 1993–
94.
Figure 2 International comparison of energy efficiency trends for the pulp and paper industry
specific energy consumption (GJ/ton)
45
40
35
30
25
20
15
10
5
0
1982
1984
1986
1988
1990
1992
1994
Japan
India
The trend in specific energy consumption (sec) for the sector is shown in figure 2. As can be seen
from the figure, the sec has declined from 41 GJ/ton in 1981-82 to 35 GJ/ton in 1993–94. This is
primarily attributed to both modernization and technology up gradation as well as proliferation of
a large number of small sized plants based on recycled paper. On the same figure, the sec for the
Japanese pulp and paper industry is also superimposed. As can be seen, the Japanese industry sec
is about 23 GJ/tonne. The reason for choosing Japan for comparison purposes is based on the fact
that the pulp/paper ratio of the Indian industry closely matches that of Japan, and thereby offers a
good basis for comparison.
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