Maharashtra MSMEs to Cut Over 4 Mn in Carbon Emissions by 2031 Despite Green Funding Hurdles

Maharashtra’s State Energy Efficiency Action Plan (SEEAP) has set targets to reduce carbon emissions by up to 55.15 million metric tonnes of CO2 by 2031 through comprehensive energy efficiency and decarbonisation measures, reported TOI.

Greenhouse gas emissions from India’s MSME sector are projected to increase from approximately 30 million tonnes of CO2- equivalent (MtCOe) in 2016-17 to over 72 MtCO2e by 2029-30, more than doubling in just over a decade, according to a 2022 report by The Energy and Resources Institute (TERI). 

Maharashtra’s current plan, TOI cited Asar, a social impact advisory forum focused on environmental and social issues, emphasises a cluster-based approach — targeting hubs like Pune Forging, Kolhapur Foundry and Bhiwandi Textile — using mandatory energy audit, technology upgrades and policy incentives to maximise energy savings and achieve emissions reductions of over 4.05 million metric tonnes of CO2 by 2031. This would be equivalent to taking about 9 lakh cars off the road for a year or eliminating the annual emissions from burning 2 million tonnes of coal, Asar noted.

Hard to Decarbonise

These enterprises generate approximately 40% of the state’s Gross State Domestic Product (GSDP) and provide livelihoods to over 1.3 crore people, reported TOI. However, many of these units, especially those in metal casting and foundry operations (melting and casting metal for vehicles, machinery and infrastructure) still rely on high-emission fuels such as coke and coal. They are yet to fully benefit from energy efficiency tools or emissions tracking mechanisms.

TOI also outlined that an estimated 8,259 MSME units are operating in the secondary steel and foundry sector alone in Maharashtra, collectively expected to consume 11.8 million tonnes of oil equivalent (Mtoe) in energy annually and emit 58.2 Mt CO2 collectively, according to Sameeeksha, India’s energy efficiency platform for MSMEs.

“Foundries are indispensable to India’s manufacturing economy, which boasts the world’s second-largest foundry sector, but they’re also incredibly hard to decarbonise,” Rahul Patil, Chairman, Indian Institute of Foundrymen, Kolhapur, told TOI.

However, according to Carbon Copy, experts warned that the adoption will stall without green financing and technical support. According to a 2022 IEEFA report, credit limits and high costs make it difficult for MSMEs to access decarbonisation funds. It also suggested a specialised green finance platform through Small Industries Development Bank of India (SIDBI). Additionally, as per a report by ET, a recently launched $100 million AFD-SIDBI credit line provides reasonably priced loans for investments in clean technology.