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The OEM Revolution in India’s Sustainable Transformation
The OEM market in India is growing rapidly, which has created new challenges. According to EY, the Indian Electronic Manufacturing services is currently valued at $19 billion and is poised to reach $54 billion by 2027 at a CAGR of 33%. However, as India strives to meet its climate commitments under the Paris Agreement, Original Equipment Manufacturers or OEMs across various sectors are not just players but the driving force in achieving sustainability. Fuel efficiency and carbon neutrality are not just key priorities but also the responsibility of OEMs in industries like automotive and manufacturing, energy, electronics and aerospace.
Understanding The Need For Fuel Efficiency and Carbon Neutrality
India, as the third-largest emitter of carbon dioxide globally, urgently needs to address its carbon footprint. With 7% of the world’s emissions originating from the country, the transportation, manufacturing, and energy sectors are significant contributors. The fuel consumption within these industries not only depletes valuable resources but also leads to increased carbon emissions. Given the growing global focus on climate change, it has become vital for Indian OEMs to prioritise energy-efficient processes and carbon neutrality within their manufacturing scenes.
The Government of India has set ambitious targets, such as reducing carbon emissions by 33-35% from 2005 levels by 2030. This has led to developing policies like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, the Perform, Achieve and Trade (PAT) scheme for energy efficiency, and corporate sustainability reporting regulations.
Fuel Consumption Across Different Sectors
The Indian automotive industry, which accounts for nearly 20% of the country’s industrial emissions, actively strives to improve fuel efficiency and reduce carbon footprints. One of the most prominent trends in this sector is the shift toward electric vehicles (EVs). Leading OEMs such as Tata Motors and Mahindra are making substantial investments in electric mobility, which aligns with the government’s objective of having 30% of vehicles operating on Indian roads powered by electricity by 2030.
OEMs use lightweight materials such as aluminium and carbon fibre composites to enhance fuel efficiency. For instance, Tata Motors has engineered lighter models with improved aerodynamics, which has reduced fuel consumption substantially.
Another innovative approach includes developing hybrid models that combine combustion engines with electric motors to boost fuel efficiency. In the realm of manufacturing processes, Indian OEMs (OEMs) such as Maruti Suzuki and Ashok Leyland are currently incorporating energy management systems (EMS) to enhance the efficiency of energy utilisation across their production lines. According to the Society of Indian Automobile Manufacturers (SIAM), these changes have resulted in a 10-15% reduction in energy consumption across several automotive plants.
Energy Sector
India’s energy sector is also witnessing a gradual transformation toward carbon neutrality.
OEMs that supply equipment for energy generation are increasingly incorporating fuel-efficient technologies and processes into their products.
For example, Bharat Heavy Electricals Limited (BHEL) has incorporated ultra-supercritical technology in power generation, increasing fuel efficiency by 5-8%. This reduction in the overall carbon footprint of thermal power plants is significant, as these plants continue to play a major role in India’s energy mix.
Renewable energy OEMs such as Suzlon and ReNew Power significantly contribute to the industry by developing advanced wind turbines and solar modules that offer increased efficiency. According to the Ministry of New and Renewable Energy (MNRE), solar and wind power have helped India avoid 56 million tonnes of CO2 emissions annually.
Aerospace
Though smaller in scale than the automotive and energy sectors, the aerospace industry is crucial in promoting fuel efficiency. Aircraft manufacturers such as Hindustan Aeronautics Limited (HAL) are currently focusing on developing new designs that aim to reduce drag and weight, resulting in decreased fuel consumption.
These design advancements are essential for improving the efficiency and sustainability of modern aircraft. The implementation of biofuels and hybrid propulsion systems represents a notable area of advancement for OEMs. In 2021, SpiceJet launched India’s inaugural indigenous biofuel-powered flight. It used bio-jet fuel manufactured by the Indian Institute of Petroleum. This landmark achievement highlighted the potential for carbon reduction in the aviation industry. While biofuels are still in the developmental phase, their large-scale adoption could reduce aviation emissions by 50% by 2050, according to the International Air Transport Association (IATA).
Is Collective Approach The Only Resort?
Along with attempts to lower fuel consumption or increase fuel efficiency, OEMs also incorporate other methods to ensure reduced carbon emissions. OEMs increasingly shift to renewable energy sources like solar rooftops, wind power, and energy storage to reduce reliance on fossil fuels. Companies such as Tata Steel and Hindalco have adopted these solutions, which, according to the Confederation of Indian Industry or CII, can lower industrial emissions by 15-25%. OEMs also embrace the circular economy model, focusing on recycling and minimising waste. Tata Motors, for example, has recycled over 95% of its automotive waste through its Re-WoRkS initiative. Additionally, using recycled metals like aluminium can reduce emissions by 80%. This can help achieve India’s ambitious carbon-neutral goal in the next 50 years.
