As the world gears up for COP30 in Belém, Brazil, the global climate debate is entering a decisive phase one focused not just on ambition but on action. For India, this means demonstrating how an emerging economy can decarbonize its industrial sector without sacrificing growth. Among the sectors that illustrate this challenge most clearly are iron & steel, cement, fertilizers, aluminium, and chemicals particularly the chlor-alkali industry, a relatively smaller but highly energy-intensive segment of India’s manufacturing landscape. Despite its importance, the sector often remains overlooked in the broader industrial decarbonization discourse. More fundamentally, there is a need in India for a sector-specific roadmap for chemical decarbonization, to guide investments, policy incentives, and technology transitions in line with national climate goals.
The chlor-alkali industry plays a vital role in supporting a wide range of essential industries. It produces caustic soda, chlorine, and hydrogen, these three basic chemicals that feed into aluminium refining, textiles, paper, water treatment, and pharmaceuticals. However, production of these essential materials releases significant carbon emissions. Electrolysis of brine, the process used to separate chlorine and sodium hydroxide, consumes high amounts of electricity, which in India is still largely fossil based. Since the process relies on electrolysis, its emissions intensity is tightly linked to the carbon content of the electricity it consumes. In this sense, the chlor-alkali sector mirrors the state of India’s power system, its path to decarbonization depends not only on adopting energy-efficient processes but also on access to reliable and affordable clean electricity.
At COP29, held in Baku, countries discussed how climate finance could better support industrial transitions in sectors like steel, cement, and chemicals. By COP30, the pressure is anticipated be on to show that such support translates into actual projects. India’s Chlor-alkali sector is shifting toward cleaner production methods, making it a realistic testing ground for industrial decarbonisation that aligns with the country’s broader climate goals. In recent years, several Indian producers have begun integrating renewable electricity directly into their operations. For instance, Gujarat Alkalies and Chemicals Limited (GACL) has partnered with Aditya Birla Renewables to develop a 62.7 MW renewable hybrid power project in Gujarat. The plant will supply power exclusively for GACL’s captive use, advancing the company’s transition toward clean energy. The company aims to raise the share of renewables in its total energy mix significantly over the next few years.
Technology upgrades are advancing in parallel. Having phased out mercury cells in line with global environmental standards, Indian producers are now looking toward oxygen-depolarised cathode (ODC) technology, which can reduce energy use by up to 30 per cent compared with conventional membrane cells. While only a few pilot lines are running presently, companies are studying the business case for large-scale conversion. Tata Chemicals, for instance, has committed to substantial energy-efficiency improvements and greater renewable sourcing in its decarbonization roadmap, combining cell-level efficiency with clean-power inputs.
Another promising approach is the treatment of hydrogen long seen as a by-product, as a valuable low-carbon feedstock. Every tonne of chlorine produced yields about 28 kilograms of high-purity hydrogen. Instead of flaring or venting it, several companies are now exploring ways to harness this hydrogen to supply nearby industrial users. Recently, GACL has signed a memorandum of understanding with NTPC Renewable Energy Ltd to collaborate on green hydrogen projects, while Indian Oil’s growing network of hydrogen pilots is creating offtake opportunities that chlor-alkali plants can serve. When the electricity used in electrolysis is renewable, this hydrogen effectively becomes “green,” offering a low-cost source for India’s expanding hydrogen economy. Thus, the chlor-alkali industry has a potential to support decarbonization in different hard-to-abate industrial sector.
These examples show that India’s chlor-alkali industry is moving, but the pace remains slow and uneven. The real constraint lies not in intent or technology, but in the enabling environment. The pathway is hindered by critical implementation challenges:
- Access to affordable finance remains the single biggest bottleneck.
- Upgrading electrolysers, integrating renewables, and installing storage all require high upfront capital. Blended finance mixing concessional international capital with domestic green bonds and credit guarantees can de-risk these projects.
- Public procurement guidelines that prefer low-carbon caustic soda or chlorine in water treatment and pharmaceuticals could create steady domestic demand for cleaner products.
India still needs to build stronger systems to support industrial decarbonization. Developing a national carbon-accounting framework for industrial chemicals would help exporters prepare for carbon-border measures and reward efficiency within domestic markets. In parallel, enabling state utilities to support open-access renewable contracts for energy-intensive sectors can speed up clean electricity use without overloading the grid.
To intensify momentum, India should bring the chlor-alkali sector into the mainstream of its decarbonisation strategy. A dedicated roadmap with clear emission benchmarks to track the progress, renewable energy targets to cut electricity-related emissions, and tailored financial incentives should be embedded within national industrial policy. The sector’s by-product hydrogen, often underutilized, could become a cornerstone for developing industrial hydrogen hubs, linking chemical producers with nearby refineries, fertilizer units, and mobility applications. As global carbon-border measures and green-product standards evolve, ignoring the chlor-alkali industry would be a missed opportunity. Decarbonising this sector is not just about compliance, it is about future-proofing India’s competitiveness in the global chemical supply chain. Prioritizing chlor-alkali now would send a clear signal: that India’s industrial decarbonization story includes not just the big emitters, but also the quiet enablers of its manufacturing economy.
(Views expressed are the authors’ own and don’t necessarily reflect those of ICRIER)
