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Highlights

South Asia accounts for 8% of global CO2 emissions

Hydrogen use could cut emissions by 85%-95%

India on track to generate 450 GW renewable energy by 2030

South Asia, responsible for about 8% of global CO2 emissions, requires collaborative government funding and a favorable policy framework to cut its carbon footprint and boost the use of clean fuels and technology, Vivek Sharma, senior director, CRISIL Infrastructure Advisory said at the S&P Global Platts Asia Pacific Petroleum Conference Sept. 28.

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"If we adopt new energies including hydrogen, it could reduce CO2 emissions by 70%," Sharma said speaking about the role of clean fuels in meeting the UN Conference of the Parties, or COP, commitments, with a focus on South Asia. "If I also include implementation of energy efficiency measures, we can tackle 85%-95% of our overall emissions."

Sharma's comments came as developing nations lie in wait for the $100 billion in funds promised by developed nations under the UN climate agreement to advance clean fuel technologies. The funding was expected by 2020 but has been delayed amid the COVID-19 pandemic.

The COP26 meeting Nov. 1-12 is expected to put a spotlight on the nations that have not yet established a net zero emissions target set by the 2015 Paris Agreement. The target requires global temperatures to be lowered by over 2 degrees Celsius, preferably 1.5 degrees Celsius, compared with pre-industrial levels.

India, which accounts for about 7% of global carbon emissions, is among the South Asian countries that have not agreed to the UN's net zero target. The country, however, aims to generate 450 GW renewable energy by 2030, and has already added 100 GW of renewable energy capacity, as it looks to decouple its economic growth from carbon emissions.

India's Nationally Determined Contributions (NDC) as per the Paris Agreement are to cut carbon emissions by 30%-35% per unit of GDP by 2030, from the 2005 level, while increasing afforestation.

"Policy and financial support are critical," Sharma said. "We need to have clear target setting and timelines for (renewable) power generation."

Other South Asian nations could look to India's policy framework, such as, renewable purchase obligation and public-private partnership model of gap financing and use it "as a case study" to boost renewable energy generation, Sharma said.

The state of affairs

Industrial emissions account for 24.2% of the total emissions in South Asia, making up for the biggest chunk of greenhouse gases in the region, Sharma said. That includes emissions from steel, chemicals, cement, and other process driven industries, which are mainly powered by coal.

The use of renewable hydrogen fuel was the most efficient method to cut industrial emissions, but it required technology readiness, according to Sharma.

"I don't think any other technology can address the energy emissions coming from industries," he said. "CO2 removal can help but that has a huge cost."

India's upcoming hydrogen policy could set capacity targets for electrolysers for hydrogen production and place a premium on renewable hydrogen through feed-in tariffs, Sharma said, adding that the country could adopt tradable energy certificates for hydrogen to grow the market.

"We have to go back to our old story that CO2 needs to be priced, or traded, so that people start adopting renewables," he said.

South Asia's transportation sector was still miles away from adopting electric vehicles on a mass scale due to the high production cost of EVs. India was moving in that direction gradually having floated a couple of tenders for renewable power storage, Sharma said.

The adoption of renewable power storage and the manufacturing of lithium batteries in India could bring the "cost curve down slowly," he said. "Initially it will require global level intervention, (and) country level intervention to ensure these technologies get adopted."

NDCs of South Asian countries:

Bangladesh: 15% cut in GHG by 2030

Maldives: 10% cut in emissions by 2030, increasing to 24% on the receipt of external funds, resources

Nepal: Net zero GHG by 2050

India: Reduce emissions per unit of GDP by 33%-35% by 2030 from 2005 level, increase carbon sinks

Pakistan: Cut up to 20% of 2030 projected GHG emissions

Sri Lanka: 23% cut in GHG by 2030

Bhutan: Remain carbon neutral

Source: CRISIL