With a major bankroller of India’s net zero targets facing financial strain, are the nation’s green goals at risk?

The loss of half of the value of the Adani Group leaves questions over whether their pivotal green energy projects in India will be seen through. The affair has led some to call for more diversified investment strategies.
With a major bankroller of India’s net zero targets facing financial strain, are the nation’s green goals at risk?

India’s net zero plans

With 2.9 GtCO2e of net annual emissions, India is the third largest GHG emitter after China and the US, although its per-person emissions of 1.96 tCO2e are less than one-third of the global average of 6.55 tCO2e. Therefore, India’s path to decarbonisation is vital to the global push for net zero. India currently emits 2.9 GtCO2e of net GHGs annually (after subtracting 0.3 GtCO2e of negative emissions). The five industries that account for the majority of these emissions (70 per cent) are power, steel, automotive, cement, and agriculture. Over the past ten years, India has cut its emission intensity by 1.3 per cent annually and successfully decoupled emissions from GDP growth. As a result, economic emissions (excluding agricultural emissions) decreased by 24 per cent in 2016 compared to levels in 2005.[i]

Prime Minister Narendra Modi set a goal for the nation to become net zero by 2070 at COP26. India presented its first long-term Strategy for Low Carbon Development (LTS) at COP27 the year after, giving the economy and specific sectors a strategic direction supporting the previously declared and submitted targets. India identifies sector-specific action areas in the LTS, focusing on the power, industry, transport, construction, and urban sectors. However, the Climate Action Tracker says that the LTS does not provide adequately detailed policy guidance on how the government expects to attain net zero beyond its current policies and programmes.[ii] Overall, the Climate Action Tracker rates India’s plan as highly insufficient.

Source: Climate Action Tracker

Sunil Dahiya, an analyst at the Centre for Research on Energy and Clean Air, reiterated the barriers to the advancement of India’s climate goals. He said:

“India has just set a net zero target...But it lacks concrete sectoral targets and trajectory...and short-term milestones and targets. There is much work for India to do,”[iii]

Nidhi Aggarwal, founder of Spacemantra, an online construction and interior design marketplace, also voiced concern for how the nation will meet its targets and opined on the key issue:

“India’s stumbling block is the availability of funding and future technologies,”[iv]

With funding such a critical issue for India’s advancement of its net zero goals, it was significant when, in 2021, Adani Investment group announced its intentions to support Prime minister Modi and the Indian government with a $70 billion dollar investment to advance the decarbonisation of the energy sector.[v] Unfortunately, this investment is now at risk as the Adani Group faces a crisis.

The crisis for the Adani Group and what’s next for India’s net zero journey

The ports-to-energy conglomerate, which owns seven publicly held companies, was valued at $220 billion as of the middle of January 2023. But, since Hindenburg Research, a short seller, accused the organisation of "brazen" stock manipulation and accounting fraud on January 24, its valuations have almost halved. The company’s creator, Gautam Adani, has lost billions from his own wealth and is no longer included among the top 20 richest individuals in the world. The Adani Group has refuted the claims, labelling them as "malicious" and "baseless," and asserts that its plans have not changed. Investors, though, are understandably still anxious.[vi] Whilst a spokesperson for the Adani Group told the BBC, "All our ongoing projects continue according to the plan. Adani Group's core fundamentals remain unchanged" the organisation is still the subject of scrutiny. Investors and credit rating agencies are extensively examining its capacity to obtain capital and make debt repayments. Two Adani companies now have a negative outlook from S&P Global Ratings, and the group's significant, debt-financed capital spending programme continues to be a major concern, according to a statement from the credit rating agency ICRA last week.[vii] The first impact, in terms of India’s net zero plans, comes in the form of a postponed $4 billion investment by the French oil and gas company TotalEnergies. The green hydrogen project with the Adani Group has been delayed until additional "clarity" has been provided.[viii]

The Ambanis are another significant player in green energy, in addition to the Adani Group. Gujarat, a state in western India, would receive $80 billion in renewable energy projects from Mukesh Ambani of Reliance Group, the country's largest corporation. The Tata Group is also reported to be stepping up its clean energy initiative. Yet according to analysts, India needs a lot more players to meet its ravenous energy needs.[ix]

Ashwini K Swain of Centre for Policy Research, a Delhi-based think tank, said:

"If we need to meet so much of energy demand, we need many more private players, a few big and many small,"

"We cannot work with half a dozen players and a couple of players who are disproportionately big,"[x]


[i] McKinsey- Decarbonising India: Charting a pathway for sustainable growth

[ii] Climate Action Tracker- India

[iii] WEF- These are the challenges facing India's net-zero target

[iv] Ibid

[v] Adani Group- Investments Synchronised to Turbocharge Decarbonisation of India’s Power Sector

[vi] BBC- Adani Group: Can embattled India tycoon recover from $100bn loss?

[vii] Ibid

[viii] BBC- Gautam Adani: Will tycoon’s wealth woes hit India’s green energy dreams?

[ix] Ibid

[x] Ibid


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