Climate Investment Opportunities in India’s Cooling Sector Climate Investment Opportunities in India’s Cooling Sector 01 2022 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions and funding from the European Union. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent, nor of the European Union. Although The World Bank and GFDRR make reasonable efforts to ensure all the information presented in this document is correct, its accuracy and integrity cannot be guaranteed. Use of any data or information from this document is at the user’s own risk and under no circumstances shall The World Bank, GFDRR, the European Union or any of their partners be liable for any loss, damage, liability, or expense incurred or suffered which is claimed to result from reliance on the data contained in this document. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank, nor of the European Union concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions—The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Attribution—The World Bank, 2022. Climate Investment Opportunities in India’s Cooling Sector. Washington, DC: The World Bank. Any queries on rights and licenses, including subsidiary rights, should be addressed to The World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; email: pubrights@ worldbank.org. Study Conducted by Iora Ecological Solutions Ecological Solutions, Energe-se, TESSOL and Vertiver Design by Vertiver 02 Climate Investment Opportunities in India’s Cooling Sector Climate Investment Opportunities in India’s Cooling Sector Climate Investment Opportunities in India’s Cooling Sector 03 Acknowledgements The development of the roadmap to support of the following experts and organizations the implementation of the India Cooling Action during this study: Plan (ICAP) has been a multistakeholder • Ministry of Power: Mr. Vishal Kapoor, Director effort, with inputs from various Government of • Energy Efficiency Services Limited (EESL): India ministries and agencies, private sector Mr. Saumya Garnaik, Executive Director companies, industry associations, think tanks, • Bureau of Energy Efficiency (BEE): Mr. research institutions and individual subject Saurabh Diddi, Director experts. • IIT Bombay: Dr. M. V. Rane, Professor, Mechanical Engineering (Expert on Energy Sincere thanks to Mr. Jigmet Takpa, Hon’ble Conservation, HVAC&R and Alternate Joint Secretary, Ministry of Environment, Forest Energy Resources) and Climate Change (MoEFCC), Government • National Institute of Urban Affairs (NIUA) of India, Ms. Rajasree Ray, Economic Adviser, • United Nations Environment Programme MoEFCC, and particularly Mr. Aditya Narayan (UNEP): Ms. Lily Riahi, Programme Manager Singh, Additional Director. Ozone Cell, for and Global Lead – District Energy Initiative providing their valuable inputs which helped and Mr. Benjamin Hickman Regional, guide the study and development of the sectoral Technical Advisor for Asia and Europe roadmaps. • BSES Delhi: Mr. Abhishek Ranjan, Vice President, System Operation, Power A special mention needs to be made of the Markets and Head, Renewable, Smart & support provided by the Alliance for Sustainable DSM projects: Habitat, Energy Efficiency and Thermal Comfort • Ashok B. Lall Architects: Mr. Ashok Lall, for All (SHEETAL), a civil society organization Principal Architect (Buildings Energy initiative led by The Energy and Resources Efficiency Expert) Institute (TERI) and partners Alliance for an • Danfoss: Mr. Nagahari Krishna, Director, Energy Efficient Economy (AEEE) and Council Industrial Affairs and Regional Hotspots on Energy, Environment and Water (CEEW) • Tabreed: Mr. Sudheer Perla, India Country supported by the Children Investment Fund Manager Foundation (CIFF), for engaging with the • Voltas Limited: Mr. Srinivasu Moturi, Head, study team and providing the platform for the R&D Center final stakeholder consultation at the World • Godrej & Boyce Manufacturing Co. Ltd.: Mr. Sustainable Development Summit 2022. Santosh Salian, Assistant Vice President - Finally, the report benefitted from several Product Group Head, Air Conditioners rounds of consultations with technical experts in • Amazon: Mr. Alex Rudee, Senior Manager – The World Bank Global Practices and thematic Nature-based Solutions (NbS) areas, experts from the International Finance • Oorja Energy Engineering Services: Mr. Corporation (IFC) and study peer reviewers and Madhusudan Rapole, Managing Director subject experts, Dr. S.N. Srinivas and Professor • Coldstar: Mr. Sameer Verma R.S. Agarwal. We would like to acknowledge the • Rinac India Ltd.: Mr. P. Sukumaran, Director active participation and invaluable contributions • Indian Society of Heating, Refrigerating and 04 Climate Investment Opportunities in India’s Cooling Sector Air Conditioning Engineers (ISHRAE): Mr. • Prof. R. Saravanan, Refrigeration and Vikram Murthy, National President and Dr. Air conditioning Division, Department of Roshini Eashow, Past President of ASHRAE Mechanical Engineering, Anna University, Mumbai Chapter and Past President of College of Engineering, Guindy Campus, ISHRAE Mumbai Chapter Chennai • Trufrost: Mr. Neeraj Seth, Co-Founder & • Emerson Climate Technologies: Managing Director Mr. Chetan Shetty, Sales Manager • Valeo Motherson Thermal Commercial (Technology Companies and Strat-ups) Vehicles India Ltd.: Mr. Tarun Malhotra, RMI India Head of Sales, Marketing and Business Development (OEM Business) This study was financed by the EU-funded • Subros Ltd.: Mr. Arun Goel, Assistant Vice EU-SAR Capacity Building for DRM Program, President (NTD, Design, R&D & Materials), managed by the Global Facility for Disaster Subros Technical Centre Reduction and Recovery. This report, ‘Climate Investment Opportunities The team worked under the overall guidance in India’s Cooling Sector’ is a collaborative effort of Auguste Tano Kouame (Country Director, of the World Bank (WB), and a consortium of India), John A. Roome (Regional Director, South environmental and climate action advisory firms, Asia Sustainable Development) and Abhas led by Iora Ecological Solutions, comprising of K. Jha (Practice Manager, South Asia Region Energe-se, Tessol and Vertiver. Climate Change and Disaster Risk Management At the World Bank, the report is produced by Unit). The team also gratefully acknowledges a core team led by Mehul Jain and includes the support of Junaid Kamal Ahmad (Vice Catriona Palmer, Deepak Singh, Devika Shisheer President, Operations, Multilateral Investment Panse, Karan Mangotra, Khyati Rathore, Thomas Guarantee Agency, then Country Director, India) Michael Kerr and Yeshika Malik. The sectoral under whose guidance the report was initially contributors include Adarsh Kumar, Alexander conceived. Sharabaroff, Anupam Joshi, Ashok Sarkar, Gayatri Acharya, Gerald Paul Ollivier, Gayane The study is authored by Mr. Swapan Mehra, Ms. Minasyan, Joanna Mclean Masic, Johannes Sriya Mohanti, and Dr Aakriti Wanchoo from Iora Heister, Manivannan Pathy, Martina Bosi, Monyl Ecological Solutions, Ms. Smita Chandiwala from Toga, Natalya Stankevich, Nitika Man Singh Energe-se, Mr. Rajat Gupta from Tessol, and Ms. Mehta, Patsy D’Cruz, Poonam Ahluwalia Khanijo, Chhaya Bhanti from Vertiver. Rahul Srinivasan, Rajesh Kumar Miglani, and Sudip Mozumder. Other contributors include Ananda Swaroop, Anup Karanth, Peeyush Ramawtar Sekhsaria, Ritu Ahuja and Sumit Gulati. Climate Investment Opportunities in India’s Cooling Sector 05 Table of Contents List of Figures 08 List of Tables 09 Abbreviations and Acronyms 10 Executive Summary 13 Chapter 1: Introduction 35 1.1 Cooling India: Development Prerogatives and Need for Sustainable Cooling 36 1.2 Study Objectives and Methodology 41 Chapter 2: Space Cooling 45 2.1 Summary 46 2.2 Sectoral Overview 46 2.3 Landscape of Cooling Opportunities in the Sector 47 2.3.1 Reduce demand by integrating passive measures in buildings 47 2.3.2 Improve efficiency of cooling technologies 50 2.3.3 Shift demand to district cooling technologies 53 2.3.4 Adapt cities to manage heat stress 55 2.4 Prioritized Opportunities for Concessional Finance 57 2.4.1 Mainstream thermal comfort parameters in affordable housing policies and 58 programs at the national and state levels 2.4.2 Enable market transformation towards super-efficiency for high energy impact 59 cooling technologies 2.4.3 Support uptake of tri-generation and district cooling systems 60 2.4.4 Mainstream passive cooling measures in urban planning 62 Chapter 3: Cold Chain and Refrigeration 67 3.1 Summary 68 3.2 Sectoral Overview 69 3.3 Landscape of Cooling Opportunities in the Sector 70 3.3.1 Development of new energy efficient and sustainable cold chain networks 71 3.3.2 Improve energy efficiency, integrate RE in existing cold chain infrastructure and 71 strengthen systems 3.4 Prioritized Opportunities for Concessional Finance 72 3.4.1 Support development of sustainable and energy efficient end-to-end cold chain 72 networks, including refrigerated transport 3.4.2 Promote better operations and servicing through capacity building of all 78 stakeholdersand incorporation of effective monitoring system Chapter 4: Passenger Transport Air Conditioning 85 4.1 Summary 86 4.2 Sectoral Overview 87 4.3 Landscape of Cooling Opportunities in the Sector 88 4.4 Prioritized Opportunities for Concessional Finance 89 Chapter 5: Refrigerants 93 5.1 Summary 94 5.2 Sectoral Overview 95 5.3 Landscape of Cooling Opportunities in the Sector 95 5.3.1 Support HFC phase down through roadmaps, policies and public procurement 96 5.3.2 Promote domestic R&D and indigenous production of low-GWP refrigerants 97 5.3.3 Improve servicing, maintenance and disposal to reduce refrigerant demand 99 5.4 Prioritized Opportunities for Concessional Finance 100 Chapter 6: Conclusion and Way Forward 103 References 108 Annexes 116 Annex 1: Prioritization of sustainable cooling opportunities 116 Annex 2: Detailed roadmap for space cooling sector 121 Annex 3: Detailed roadmap for cold chain and refrigeration sector 136 Annex 4: Detailed roadmap for passenger transport air conditioning sector 147 Annex 5: Detailed roadmap for refrigerants 151 07 List of Figures Figure 1: Rising temperatures across India 36 Figure 2: Annual growth in cooling demand, refrigerant demand, energy 40 consumption and GHG emissions, Figure 3: Thematic areas and goals of ICAP 41 Figure 4: Projected growth in commercial and urban and rural residential 47 floor space, Figure 5: Projected annual energy consumption for key space cooling 52 technologies in reference and intervention scenarios Figure 6: Refrigerant demand in cold chain and refrigeration 70 Figure 7: Energy demand projection due to MAC in passenger cars, buses 88 and railways under two scenarios (MAC shares being 15 percent and 18 percent of the total energy consumption) Figure 8: Annual refrigerant demand under the BAU scenario 96 08 Climate Investment Opportunities in India’s Cooling Sector List of Tables Table 1: Roadmap for prioritized opportunities in the space cooling sector 63 Table 2: Gaps in cold chain infrastructure in India in 2014-15 69 Table 3: Roadmap for prioritized opportunities for the cold chain and 81 refrigeration sector Table 4: Projected results for MAC energy consumption and emissions 89 under BAU and improved scenarios Table 5: Roadmap for prioritized opportunities in passenger transport air 91 conditioning sector Table 6: Roadmap for prioritized opportunities in refrigerants sector 102 Climate Investment Opportunities in India’s Cooling Sector 09 Abbreviations and Acronyms APEDA Agricultural and Processed Food Products Export Development Authority APMC Agricultural Produce Market Committee BAU Business As Usual BEE Bureau of Energy Efficiency BIS Bureau of Indian Standards BLDC Brushless Direct Current °C degree centigrade CaaS Cooling as a Service CAFCS Corporate Average Fuel Consumption Standards CAFÉ Corporate Average Fuel Economy CAGR Compound Annual Growth Rate CREDAI Confederation of Real Estate Developers Associations of India CSIR-IICT Council of Scientific and Industrial Research - Indian Institute of Chemical Technology CSISAC Central Sector Integrated Scheme on Agricultural Cooperation CSR Corporate Social Responsibility DAY-NRLM Deendayal Antyodaya Yojana – National Rural Livelihoods Mission DBT Department of Biotechnology DCS District Cooling System DFI Doubling Farmers' Income Discom Distribution Company DPIIT Department for Promotion of Industry and Internal Trade DST Department of Science & Technology DX Direct Expansion EC Act Energy Conservation Act ECBC Energy Conservation Building Code EDGE Excellence in Design for Greater Efficiencies EESL Energy Efficiency Services Ltd ENS Eco- Niwas Samhita EPR Extended Producer Responsibility ESCO Energy Service Company FAME Faster Adoption and Manufacturing of Electric Vehicles FI Financial Institution FPO Farmer Producer Organization FSSAI Food Safety and Standards Authority of India GDP Gross Domestic Product GeM Government e Marketplace GHG Greenhouse Gas GRIHA Green Rating for Integrated Habitat Assessment GSP Good Servicing Practice GWP Global Warming Potential GW gigawatt 10 Climate Investment Opportunities in India’s Cooling Sector HCFC Hydrochlorofluorocarbons HFC Hydrofluorocarbons HFO Hydrofluoroolefins HUDCO Housing and Urban Development Corporation Ltd. HVAC Heating, Ventilation and Air Conditioning HWD Heat Wave Duration HWF Heat Wave Frequency ICAP India Cooling Action Plan ICAR Indian Council of Agricultural Research IEA International Energy Agency IFC International Finance Corporation IGBC Indian Green Building Council IISc Indian Institute of Science IITs Indian Institutes of Technology IoT Internet of Things IPCC Intergovernmental Panel on Climate Change ISHRAE Indian Society of Heating, Refrigerating and Air Conditioning Engineers KIP Kigali HFC Implementation Plan KwH Kilowatt-hour LEED Leadership in Energy and Environmental Design MAC Mobile Air Conditioning MDB Multilateral Development Bank MEPS Minimum Energy Performance Standards MIDH Mission for Integrated Development of Horticulture MIS Management Information System mm millimeter MNRE Ministry of New and Renewable Energy MoAFAHD Ministry of Fisheries, Animal Husbandry and Dairying MoAFW Ministry of Agriculture and Farmers Welfare MoCI Ministry of Commerce and Industry MoEFCC Ministry of Environment, Forest and Climate Change MoFAHD Ministry of Fisheries, Animal Husbandry and Dairying MoFPI Ministry of Food Processing Industries MoHFW Ministry of Health and Family Welfare MoHUA Ministry of Housing and Urban Affairs MoRD Ministry of Rural Development MoRTH Ministry of Road Transport & Highways MoUD Ministry of Urban Development MSDE Ministry of Skill Development & Entrepreneurship MT metric ton mtCO2e million ton of carbon dioxide equivalent mtoe Million tons of oil equivalent Climate Investment Opportunities in India’s Cooling Sector 11 MW megawatt NbS Nature-based Solutions NCCD National Centre for Cold-chain Development NDMA National Disaster Management Authority NEMMP National Electric Mobility Mission Plan NHB National Horticulture Board NHB National Housing Bank NHM National Horticulture Mission NIT National Institute of Technology NIUA National Institute of Urban Affairs NSDC National Skill Development Corporation O&M Operation and Maintenance PHFI Public Health Foundation of India PM-KUSUM Pradhan Mantri Kisan Urja Suraksha evem Utthan Mahabhiyan PMAY Pradhan Mantri Awas Yojana PMFME PM Formalisation of Micro food processing Enterprises PMKSY Pradhan Mantri Kisan Sampada Yojna PMKVY Pradhan Mantri Kaushal Vikas Yojana PNGRB Petroleum and Natural Gas Regulatory Board PWD Public Works Department R&D Research and Development RAC Room Air Conditioner RCP Representative Concentration Pathway RE Renewable Energy S&L Standards and Labelling SAPCC State Action Plan on Climate Change SDG Sustainable Development Goal SIDBI Small Industries Development Bank of India SMAM Sub-Mission of Agriculture Mechanizatio sq km square kilometer TCPO Town and Country Planning Organisation TR Ton of Refrigeration TWh terawatt-hour UDD Urban Development Department UHI Urban Heat Island ULB Urban Local Bodies UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Change URDPFI Urban and Regional Development Plans Formulation and Implementation VRF Variant Refrigerant Flow W watt 12 Climate Investment Opportunities in India’s Cooling Sector Executive Summary Climate Investment Opportunities in India’s Cooling Sector 13 India’s cooling strategy can of an air-conditioning unit can vary between simultaneously mitigate the US$260 and US$500, air-cooling systems are heat related risks on lives a luxury available only to a few.4 According to and livelihoods, lower carbon analysis presented in the India Cooling Action emissions, and position India as Plan (ICAP), only 8 percent of Indian households a global hub for green cooling own air-conditioning units.5 Indoor and electric manufacturing. fans can help to maintain thermal comfort, but these too are expensive to buy and inefficient. 1. Severe heat waves, responsible for As a result, many poor and marginalized thousands of deaths across India over the last communities across India are more vulnerable to few decades, are increasing with alarming extreme heat, living in inadequately ventilated, frequency. The country is experiencing higher hot, crowded homes without proper access to temperatures that arrive earlier and stay cooling. Staying cool during extreme heat is far longer. In April 2022, India was plunged about more than just comfort – it can constitute into the grip of a punishing early spring heat the precarious line between life and death. In wave that brought the country to a standstill, a 2021 study by the Lancet Planetary Health with temperatures in the capital, New Delhi, journal, researchers found that nearly 740,000 topping 46 degrees Celsius (oC) (114 degrees excess deaths in India annually can be attributed Fahrenheit). The month of March, which to abnormal hot and cold temperatures related witnessed extraordinary spikes in temperatures, to climate change.6 was the hottest ever recorded. 4. Rising heat across India can jeopardize 2. Soon India could become one of the first economic productivity. Up to 75 percent of places in the world to experience heat waves India’s workforce, or 380 million people, depend that break the human survivability limit.1 The on heat-exposed labor, at times working in recent heat wave supports what many climate potentially life-threatening temperatures. With scientists have long cautioned about with heat-exposed worki contributing to nearly half of reference to rising temperatures across South the country’s Gross Domestic Product (GDP), the Asia. In August 2021, the Sixth Assessment country is extremely vulnerable to job losses.1 Report of the Intergovernmental Panel on By 2030, India may account for 34 million of Climate Change (IPCC) warned that the Indian the projected 80 million global job losses from subcontinent would suffer more frequent and heat stress associated productivity decline.7 intense heat waves over the coming decade.2 In December 2021, a Nature study found that The G20 Climate Risk Atlas also warned in India showed the largest heat exposure impacts 2021 that heat waves across India were likely on heavy labor among South Asian countries, to last 25 times longer by 2036-65 if carbon with more than 101 billion hours lost a year.8 emissions remain high, as in the IPCC’s worst- Analysis by global management consulting firm, case emission scenario.3 McKinsey & Company shows that lost labor from rising heat and humidity could put up to 4.5 3. As temperatures rise across India, so will percent of India’s GDP – approximately US$150- the demand for cooling. However, in a country 250 billion – at risk by the end of this decade. where two-thirds of the population live on less i As per the McKinsey (2020) study, exposed sectors include exclu- than US$2 a day, and where the average cost sively outdoor sectors such as agriculture, mining and quarrying as well as indoor sectors with poor air-conditioning penetration including manufacturing, hospitality and transport. 14 Climate Investment Opportunities in India’s Cooling Sector 5. India’s long-term food security and public (PLI) scheme can be further honed to promote health security will depend on a reliable manufacturing of components, refrigerants, cold chain network. Transporting food and and machinery that form an integral part of the pharmaceutical goods across India requires a cooling value chain. Efforts to this end will help system of cold chain refrigeration that works the country meet its growing domestic demand every step of the way. A single temperature while also enabling it to position itself as a lapse in the journey can break the cold chain, manufacturing hub for cooling technologies. spoiling fresh produce and weakening the potency of vaccines. With only 4 percent of fresh produce in India covered by cold chain facilities, Making India’s Cooling Action annual estimated food losses total US$13 billion. Plan a Success: Study Findings The third largest producer of pharmaceuticals in the world, India lost approximately 20 percent of 8. Anticipating the complex cooling energy temperature sensitive medical products and 25 trends and challenges facing India, in 2019, percent of vaccines due to broken cold chains the Government of India launched the India pre-COVID-19, leading to losses of US$313 Cooling Action Plan (ICAP)5 to help provide million a year.9 sustainable cooling and thermal comfort for all. In preparing one of the first-ever comprehensive 6. Unlocking opportunities to create a cooling action country plans, the Government of sustainable cooling strategy can help India India has signaled a mature understanding of in its post-COVID recovery by boosting the challenge. It recognizes that extreme heat investments, creating jobs, reducing is not a future risk and is already employing emissions, and securing the supply chains of strategies to adapt to the heat stress. medical care products, health infrastructure as well as food. Priority must be given to 9. ICAP recognizes that the cooling transitioning to energy-efficient, climate-friendly requirement is cross-sectoral and essential for cooling solutions that do not cause a spike in economic growth.11 Released by the Ministry of electricity demand. Sustainable cooling is not Environment, Forests and Climate Change and just essential for economic growth but is critical built over a 20-year timeline, ICAP is a multi- for a country’s health, security and productivity. stakeholder-driven framework that identifies diverse sustainable cooling needs and suggests 7. Leveraging existing schemes, the recommendations across key sectors including government can position India as a global space cooling in buildings, agriculture and hub for green cooling manufacturing. As per pharmaceutical cold chains, refrigeration, an International Energy Agency analysis, the passenger transportation and refrigerants demand for space cooling alone has risen at an transition. It also lists actions, across sectors, to average pace of 4 percent per year since 2000, help reduce India’s cooling demand. The ICAP’s twice as quickly as for lighting or water heating. 10 goals include: This offers a great opportunity for India to foster future innovation and investment in the sector • Reduction of cooling demand across by providing a conducive policy environment. sectors by up to 25 percent by 2037-38; Existing government programs such as Make • Reduction of refrigerant demand by up in India or the Production Linked Incentive to 30 percent by 2037-38; Climate Investment Opportunities in India’s Cooling Sector 15 • Reduction of cooling energy requirements environmental and climate-solution consulting by up to 40 percent by 2037-38; groups, Iora Ecological Solutions, Energese, • Recognition of “cooling and related areas” Tessol and Vertiver. as a key sphere of research under India’s national science and technology program; 13. This study focused on ICAP’s thematic and cross-sectoral areas including space cooling • Training and certification of 100,000 in buildings, cold chain and refrigeration, servicing sector technicians by 2022-23 transport air-conditioning and refrigerants. and building synergy with the Skill India The refrigerants sector covers the ICAP thematic Mission. areas of Research and Development (R&D), refrigerant demand and indigenous production, 10. Cooling demand in India is expected to and the refrigeration and air-conditioning grow exponentially across all sectors over servicing sector. The authors identified specific the coming years. According to ICAP, cooling and scalable interventions that can be achieved demand across India is projected to rise at a through partnerships with various actors to help rate of 15-20 percent annually and aggregated implement the ICAP goals. cooling demand will grow to around eight times by 2037-38, as compared to the 2017-18 14. For some sectors, the study analysis baseline.5 Space cooling for buildings has the revealed data for investment opportunities, job largest current and projected cooling demand, potential and climate impacts of a sustainable refrigerant demand, energy consumption and cooling strategy. The analysis showed that a associated greenhouse gas (GHG) emissions as well-designed and implemented sustainable compared to other sectors. cooling strategy can lead to multiple indirect benefits for the economy and society including 11. While progress has been made on ICAP’s improved supply chains, new jobs, better health short-term recommendations for space and increased livelihoods. cooling, energy standards and policy action, ICAP has faced some challenges in overall 15. The analysis identifies eight key clustered implementation. To realize the ICAP goals, a opportunities where concessional finance can well-designed, pragmatic implementation plan, play a significant role in advancing the goals of supported by a robust institutional framework ICAP and sustainable cooling in India. The study and timely access to adequate financial presents actionable roadmaps for four cooling resources and technologies, is needed. sectors and includes prioritizedii opportunities for concessional financing and private sector 12. There is an unprecedented opportunity investments. The roadmaps also identify key for a transformative change in course to policy actions that are required to jumpstart implement a sustainable cooling strategy action in each of the associated sectors. The that will not only save lives but boost India’s analysis also recognizes the key stakeholders economy. To help India achieve this goal, The required for planning and implementation. World Bank commissioned this study to develop ii A two-step multicriteria prioritization framework was applied to an actionable roadmap – comprising policy, the longlist of clustered sustainable cooling opportunities. The first investment and knowledge guidelines – to step covered the criteria of climate benefits, development benefits help guide the implementation of India’s ICAP. and ability to implement. The second prioritization step focused The study was conducted in partnership with on evaluating the role of concessional financing and private sector investments. 16 Climate Investment Opportunities in India’s Cooling Sector Key Recommendations Sector 1: Summary of Space Cooling Opportunities in space cooling where leveraging of concessional finance can deliver results with high climate and development benefits: • Mainstreaming thermal comfort parameters in affordable housing policies and programs at the national and state levels • Enabling market transformation towards super-efficiency for high energy impact cooling technologies • Supporting the uptake of tri-generation and district cooling systems • Mainstreaming passive cooling measures in urban planning Climate Investment Opportunities in India’s Cooling Sector 17 16. Over the next two decades, India will Global Warming Potential (GWP) refrigerant air- experience significant growth in residential conditioning units is expected to see a 10-fold and commercial floor space. With 10 million increase in jobs over the next two decades, new homes required to be built annually to from a base of 0.2 million technicians in 2017 keep up with Indian housing demand , a huge 12 to 2 million.15 While space cooling has a high opportunity exists to introduce natural cooling potential to create new jobs in the sector, techniques into new construction. Policies and estimates for these figures are unavailable as investments must prioritize climate responsive the data must encompass the retraining and construction to avoid long-term lock-in of reskilling of workers across all dimensions of the inefficient building stock. energy-efficiency industry. 17. In India, 45 percent of the country’s peak 20. The provision of thermal comfort through electricity demand in 2050 is expected to sustainable space cooling offers an emissions come from space cooling alone. Space cooling 13 reduction potential of over 200 million ton of interventions across India will need to prioritize carbon dioxide equivalent (mtCO2e) annually “thermal comfort for all” while facilitating cooling by 2040. Of this the emission reduction potential access for 1.4 billion people and reducing the accruing from the provision of sustainable impact on an already overburdened electricity cooling solutions to the residential sector is over system. This will require sizable investments in 80 mtCO2e. creating costly peak generating capacity and result in a significant increase in GHG emissions, 21. As noted earlier, this study identified four unless suitable low energy alternatives are key concessional finance opportunities across available to meet thermal comfort needs in the space cooling sector that have strong buildings. technical feasibility and can result in high climate and development benefits. 18. The study estimates that the market potential and investment opportunity in space They include: cooling will be US$1.5 trillion by 2040. Of this, the green buildings market in India has an Mainstreaming • thermal comfort investment potential of about US$1.25 trillion parameters in affordable housing policies for residential buildings and US$228 billion for and programs at the national and state commercial buildings by 2030. It is imperative 14 levels. Affordable housing policies and for the government to create an adequate programs need to recognize thermal comfort enabling investment framework that can attract as an essential criterion for current and future financing from the private sector. programs. Energy costs to achieve comfort must be made affordable for occupants in 19. Sustainable cooling can also support India’s addition to the cost of home ownership. The development and help in a green COVID-19 government’s flagship housing program, recovery by creating jobs and boosting the Pradhan Mantri Awas Yojna (PMAY), can be economy. For example, the servicing of low- leveraged to effectively mainstream passive 18 Climate Investment Opportunities in India’s Cooling Sector cooling measures in affordable housing merchant DCS. In India’s context, DCS can construction across India. consume 20-30 percent less power than the most efficient conventional cooling solution. • Enabling market transformation towards However, savings become higher, about 60- super efficiency for high energy impact 80 percent, when compared to an average cooling technologies. There is a need to 3-star RAC.17 It is evident that shifting high align the Standards and Labelling (S&L) density cooling requirements in cities to program to transition to best available district energy technologies will lead to technologies in the market. Enabling market multiple benefits in terms of significant transformation for high energy impact reduction in the growth of space cooling- cooling technologies such as ceiling fans related GHG emissions and averted power and Room Air Conditioners (RACs) is also generation capacity. imperative. Higher upfront costs of energy- efficient models are a key barrier in the • Mainstreaming passive cooling measures price sensitive Indian market. Upstream in urban planning. Land use planning incentives for manufacturers to reduce combining passive urban cooling measures costs and support domestic manufacturing is key to strengthening heat resilience in of Brushless Direct Current (BLDC) motor cities. The use of Nature-based Solutions fans – low-energy consuming fans that (NbS) can help cities prioritize actions create less noise and have long lifespans towards equitable access to cooling for all.18 – should be explored. These can leverage Cities will need guidance across effective the government’s Make in India program, measures, implementation and private sector an initiative to encourage companies participation. Guidelines for implementation to develop, manufacture and assemble of local and city-wide urban cooling products made in India. Additionally, the measures, such as cool roofs and NbS, government’s PLI program incentivizes can support urban planning frameworks in domestic manufacturing of multiple integrating a response to heat stress in city high value RAC components (such as planning. There is also a need to develop compressors, heat exchangers, expansion business cases for all sizes of NbS and valves which are key to the efficiency of especially for private sector participation RACs.16 to ensure necessary funding,19,20 as public funds are likely to be limited. • Supporting the uptake of tri-generation and District Cooling Systems (DCS). Large-scale cooling requirements can be efficiently met through district energy technologies often using Cooling as a Service (CaaS) delivery models. Viable business and implementation models need to be established in the Indian context to support the uptake of large Climate Investment Opportunities in India’s Cooling Sector 19 Key Policy Approaches Needed to Scale-Up Action in Space Cooling Update affordable housing policies and programs at the national and state levels to include thermal comfort as an essential criterion Align the S&L program strategy to achieve ICAP goals­–stringent standards and market transformation initiatives Enact a national policy for district cooling: Mandate feasibility of DCS in high density cooling greenfield developments Guidelines for cities to integrate urban passive cooling measures in planning frameworks 20 Climate Investment Opportunities in India’s Cooling Sector Key Recommendations Sector 2: Summary of Cold Chain and Refrigeration Opportunities in the cold chain and refrigeration sector where leveraging concessional finance can deliver results with high climate and development benefits: • Supporting the development of sustainable and energy- efficient end-to-end cold chain networks, including refrigerated transport • Promoting better operations and servicing through capacity building of all stakeholders and incorporating effective monitoring systems Climate Investment Opportunities in India’s Cooling Sector 21 22. Across India, major gaps exist in its • Supporting the development of sustainable agricultural and pharmaceutical cold chain and energy-efficient end-to-end cold chain infrastructure. While cold storage capacity networks, including refrigerated transport. in the country has grown steadily, in 2015 the Combined with a conducive policy National Centre for Cold-chain Development environment and administrative structure to (NCCD) identified a gap of 3.27 million metric help support implementation, this opportunity tons for long-term holding of fresh produce.21 has high technical feasibility. To ensure that The integrated development of the cold supply development is carried out in a sustainable chain across India is severely lacking, with major manner, the opportunity requires large essential components inadequately developed. investments. NCCD estimates that close to US$11.75 billion is required to develop the 23. Major barriers to addressing these physical infrastructure and transport-related gaps include a lack of investment, enabling elements of the agriculture cold chain, infrastructure, such as roads and power, and with the biggest investment designated for the highly fragmented nature of the industry.22 building modern packhouses (about US$8.5 To address these gaps, a multi-dimensional billion). In addition, there is also a need to approach is required that includes technology, modernize the retail end of the cold chain, policy support and training to meet supply requiring US$1.3-1.9 billion.24 Decentralized requirements in a sustainable manner, along with cold chains need to be developed through better demand management and forecasting, support provided to farmer groups and and inventory planning. agri-entrepreneurs. Business models for the decentralized adoption of renewable 24. The study estimates that the market energy-based cold chain solutions at potential and investment opportunity in the the farm or village levels – that can be cold chain and refrigeration sector will be implemented by individual farmers or US$29 billion by 2038. The agricultural cold farmer groups – should be developed. It chain sector alone has the potential to create is also important to support R&D for the 1.7 million jobs, 23 helping boost post-COVID development of low-cost renewable energy recovery efforts. (RE) solutions that can be implemented at the farm gate and in the rural healthcare 25. Gaps in cold chain storage must be filled sector. There is a large gap in the availability to minimize environmental impacts. This could of refrigerated vehicles to meet demand lead to an emissions reduction potential of 77 in the country too. The study explores the mtCO2e annually by 2038. efficacy of using new business models and multimodal systems to overcome this gap. 26. This study identified two key concessional Domestic and commercial refrigeration, the finance opportunities across the cold chain and end of a cold chain, is a rapidly growing refrigeration sector that have strong technical sector in India and it is important that this feasibility and can result in high climate and growth is sustainable. Incentives and market development benefits. These include: transformation initiatives can help promote 22 Climate Investment Opportunities in India’s Cooling Sector higher efficiency refrigerators. Setting the form of grants for capacity building as up target-based programs, such as the well as subsidies and loans for incorporating state-operated Energy Efficiency Services monitoring systems. These interventions can Limited’s (EESL’s) UJALA 25 for light emitting be implemented in partnership with national diode (LED) bulbs, can lead to an increase in and state governments. Use of Internet market share of 5-star refrigerators. of Things (IOT) based monitoring and an understanding of temperature requirements • Promoting better operations and servicing of different crops are necessary for a robust through the capacity building of all cold chain network. There is a need to stakeholders and incorporating effective promote the uptake of these systems in cold monitoring systems. The capacity building chains. With the incorporation of advanced of farmers and other users in post-harvest technologies in cold chain, the skill levels management and equipment handling is a of technicians to service newer equipment requisite, offering development benefits for also needs to be enhanced. The creation a trained workforce. Improved monitoring of a certification program coupled with an at different stages of the cold chain will awareness program on benefits of hiring also help reduce food and pharmaceutical certified technicians could spur demand for losses. These interventions have the trained technicians. potential to attract concessional finance in Climate Investment Opportunities in India’s Cooling Sector 23 Key Policy Approaches Needed to Scale-Up Action in Cold Chain and Refrigeration Action plan for setting up small-scale decentralized cold chain links Committee to identify challenges in the implementation of “Integrated Cold Chain, Value Addition and Preservation Infrastructure” scheme. Implement findings of the committee Incentives and policies to jumpstart a market transformation program for improvements in equipment efficiency (domestic refrigerators and commercial deep freezers) Incentives to promote fuel free or electric reefer systems Policy and regulation to promote IoT for monitoring in cold chains and refrigeration Training and certification program for cold chain and refrigerator operators 24 Climate Investment Opportunities in India’s Cooling Sector Key Recommendations Sector 3: Summary of Passenger Transport Air Conditioning Opportunity in Passenger Transport Air Conditioning where leveraging concessional finance can deliver results with high climate and development benefits: • Improving the efficiency of Mobile Air Conditioning (MAC) systems in passenger transport systems Climate Investment Opportunities in India’s Cooling Sector 25 27. Transport air conditioning, also known as as well as developmental benefits in the form MAC, has grown considerably in India. Over of new jobs for servicing, maintenance and the last 15 years, an overall growth of over 12 recovery at end of life. percent and 2.5 percent Compound Annual Growth Rate (CAGR) has been observed in the 30. The passenger transport sector in India road and rail transport sectors, respectively. 5 provides considerable opportunity for The India automotive heating, ventilation and emissions reduction given the country’s needs air conditioning market size comprised US$822 for sustainable cooling in the future. This could million in 2018 and is projected to reach lead to an emissions reduction potential of 14 US$2,033 million by 2026, registering a CAGR mtCO2e annually by 2038. of 11.6 percent. 26 31. As noted earlier, this study identified 28. The Indian passenger car air-conditioners one concessional finance opportunity for market alone is forecasted to surpass US$1 passenger transport that has a strong technical billion by 2023. 27 An analysis of the transport feasibility and can result in high climate and sector suggests that the MAC segment development benefits. It includes: is projected to double in terms of energy consumption as well as total emissions within • Improving the efficiency of MAC systems the next decade. ICAP has estimated that MAC in passenger transport systems. This study is responsible for 15 to 18 percent of energy analysis found that a sustainable cooling consumption in passenger vehicles, thereby pathway for passenger transport in India is projecting the highest energy demand for possible through the large-scale adoption passenger cars followed by buses and then of efficient MAC systems. It will also require railways. In line with this, under a Business-As- optimization of the demand by shifting to Usual (BAU) scenario, refrigerant demand for public transport systems and new vehicle the MAC sector is expected to increase by over designs which help reduce cooling load. four times, from an average of 5,172 metric ton The technical and administrative feasibility (MT) in 2017-18 to 22,142 MT in 2037-38. of this opportunity are high given that proven efficient MAC systems are available 29. This study estimates that the market globally and in India and through a series of potential and investment opportunity in supportive regulations. This can be achieved passenger transport is US$8 billion. Improving by building demand for energy-efficient the efficiency of MAC systems in passenger MAC systems through S&L programs for transport vehicles (passenger cars, buses vehicles and by leveraging R&D to support and rail) can result in an estimated 20 percent the improvement of MAC systems. energy savings between BAU and improved efficiency scenarios. A further 29 percent carbon savings are possible by the mitigation of direct emissions through better MAC servicing and maintenance practices, and recovery at end of life. This opportunity will lead to direct climate benefits in the form of GHG emission reductions 26 Climate Investment Opportunities in India’s Cooling Sector Key Policy Approaches Needed to Scale-Up Action in Passenger Transport Air Conditioning Labelling system for cars to build public awareness on energy efficiency and emission savings Policy to promote private sector R&D on energy efficiency and low-GWP refrigerant based MAC systems Climate Investment Opportunities in India’s Cooling Sector 27 Key Recommendations Sector 4: Summary of Refrigerants Opportunity in refrigerants where leveraging concessional finance can deliver results with high climate and development benefits: • Improving servicing, maintenance, and disposal to reduce refrigerant demand across India 28 Climate Investment Opportunities in India’s Cooling Sector 32. Refrigerant demand is expected to grow 35. As noted earlier, this study identified more than six times over two decades. one concessional finance opportunity for the In 2015, the air conditioning sector had the refrigerants sector that has a strong technical largest market share of all the sectors, estimated feasibility and can result in high climate and at 62 percent of refrigerant consumption in India. development benefits. It includes improving India’s commercial refrigeration sector was the servicing, maintenance, and disposal to reduce highest consumer of hydrochlorofluorocarbons refrigerant demand across India. This can be at 22 million ton of refrigeration (TR), followed achieved by: by mobile air-conditioning at 20 million TR.5 • The uptake of trained service 33. Under a BAU scenario, annual refrigerant technicians to ensure proper servicing demand for cooling across all sectors in India and maintenance of refrigerant-based is expected to grow more than six times from equipment to reduce refrigerant leakage; 22,522 MT in 2017-18 to 149,392 MT in 2037- and 38.5 The demand for refrigerant-based vapor • Measures to support the recovery, compression technologies to meet the cooling recycling and reclamation of refrigerants. requirements of buildings will primarily drive the projected refrigerant demand. 34. The analysis in this study showed that an effective phase down of hydrofluorocarbons (HFC) across India requires a two-pronged approach of ensuring a reliable low/zero GWP refrigerants supply and efficient refrigerant demand management. While several alternatives to HFCs exist and are used across the world, these are yet to be put into large scale commercial use in India with the intention of replacing HFCs. However, India’s RAC industry has exemplified leadership in the adoption of the latest technologies. Studies have estimated that annual refrigerant demand in India could be reduced by 31 percent from a BAU scenario by 2038. This HFC phasedown could be supported through roadmaps, policies and public procurement to enable deployment of low-GWP refrigerants and technologies with lower refrigerant demand. Climate Investment Opportunities in India’s Cooling Sector 29 Key Policy Approaches Needed to Scale-Up Action in Refrigerants Policy and training programs to support recovery, recycling and reclamation or the effective destruction of refrigerants Refrigerant disposal guidelines embedded within the Extended Producer Responsibility and e-waste guidelines for reclaiming electronic components at end of life, particularly for RACs Technician training on the recovery and transport of refrigerants to reclamation centers; mandatory public sector utilization of licensed service technicians only 30 Climate Investment Opportunities in India’s Cooling Sector Conclusion: Equitable Sustainable Cooling for All 36. Sustainable cooling is not just essential for sector investment alone will not enable the economic growth but is critical for a country’s growth, scale and speed that is required health, security, and productivity. In a post- without significant and robust government COVID world with rising global temperatures, action. A coalition of public and private actors familiar ways of doing business will not pay is required, one where government action can dividends. Creating a sustainable cooling create the necessary regulatory and institutional strategy for India will require government and framework to foster innovation and investment. business leaders to transform their mindset and adapt to a new low-carbon landscape. It 39. Across India, precedents for cross- will necessitate new policies and actions across sectoral transformative change on such a multiple sectors to support sustainable cooling large scale already exist. Take, for example, growth. It is both an enormous challenge and an India’s recent uptake of LED lighting, one of the unprecedented opportunity. But it can be done. most remarkable energy-efficient transitions seen anywhere in the world. Thanks to a policy 37. As the analysis in this study shows, eight initiative known as Unnat Jyoti by Affordable key clustered opportunities can be leveraged LEDs for All or UJALA,25 the Indian government by concessional financing to advance ICAP procured LED bulbs for the national market, goals and to implement sustainable cooling lowering prices through competitive bidding. across India. Our analysis presents actionable A state-owned company, EESL, was created roadmaps for four cooling sectors – space to distribute LED bulbs to citizens. Since cooling, cold chain, refrigeration and passenger beginning in 2014, EESL has distributed millions transport air-conditioning – and identifies of LED bulbs and energy-efficient fans with an aligned national and state policies to enable estimated energy savings of nearly 48 billion convergence as well as the key stakeholders kilowatt hour (kWh) per year and estimated required for planning and implementation. annual GHG emission reduction of nearly 39 Unlocking these opportunities can help India million metric ton carbon dioxide (mtCO2).29 boost sustainable cooling investments, create jobs, reduce emissions and secure the supply 40. India’s LED bulb transition offers a roadmap chains of food, medical care products and health to develop a similar model at scale to support infrastructure. the uptake of affordable energy-efficient fans for low-income households across India. 38. Building a conducive policy, business and Given rising temperatures, ICAP estimates an institutional sustainable cooling ecosystem explosive, nearly two-fold, growth in the stock will require the support of government of fans from 450 million units in 2017 to 950 alongside partnerships between the public million by 2038.5 By offering energy-efficient and private sectors and civil society. Private fans to the market, this offers a potential to save Climate Investment Opportunities in India’s Cooling Sector 31 20 terawatt hours by 2038,5 the equivalent of water-stressed countries in the world. However, nearly 2.5 million tons of coal. With adequate Jal Jeevan’s success has been grounded in a incentives, strategic and multifaceted policy solid regulatory framework that allocated funds initiatives, and an appropriate policy ecosystem, under individual State Action Plans, approved the Government of India can jumpstart the by the Department of Drinking Water and creation of a market for energy-efficient cooling Sanitation. In 2019, at the outset of Jal Jeevan, technologies such as BLDC fans – low-energy about one-sixth of households in India had a consuming fans that create less noise and have clean water tap. Now, almost half have one.30 long lifespans. Initiatives such as India’s PMAY – a government scheme to provide 20 million 42. Building a conducive policy environment affordable homes to India’s rural and urban poor will also help spur action and investments by by 2022 – could be galvanized to distribute the private sector toward sustainable cooling. energy-efficient BLDCs. Government supported As the results in this study show, concessional models such as PMAY could be also explored to finance by multilateral development banks, enhance the uptake of efficient RACs in middle- financial institutions and the private sector will income households. play a key role in helping India develop financial instruments and innovative models to accelerate 41. To turn ICAP’s vision into a reality, a flagship the adoption of sustainable cooling measures. Indian government mission to galvanize These innovative financial instruments will be ‘Thermal Comfort and Sustainable Cooling crucial to develop and transform the cooling for All’ should be established. This can be market in India. Leveraging the power of achieved by enabling resource flow from both concessional finance constituted a key step in public and private sectors as well as promoting the creation of India’s giant 750 megawatt (MW) convergence across central, state and local Rewa solar park, an ambitious attempt by the levels. India’s national missions including state government of Madhya Pradesh to push Smart Cities, Swachh Bharat, Jal Jeevan and the boundaries of India’s private renewable Make in India provide applicable roadmaps for energy market. Driven in part by prescient long- decentralizing objectives across India’s complex term planning, capital availability and market- federal structure and inspire target-based based solutions, in the past decade, India has interventions for different sectors. Streamlining purposefully transformed its energy sector, budgetary allocations and financial flows could emerging as a global champion of solar power. also help provide the institutional framework for continuous monitoring and evaluation of 43. India stands at historic crossroads. ICAP implementation to inform planning across Providing sustainable cooling and thermal sectors. India’s Jal Jeevan mission to provide comfort for all will require investment, ingenuity clean tap water to every union territory and and innovation. The good news is that there is state by 2024 provides an excellent budgetary no shortage of commitment and enthusiasm to allocation roadmap. A tap in every home may take India’s cooling advances into a new era of seem like an ambitious aim for one of the most opportunity. Thanks to the policies laid out in the 32 Climate Investment Opportunities in India’s Cooling Sector ICAP, new technologies and scientific findings, 44. As India’s brutal spring of 2022 has already India is already on a path to rapidly scale up shown, the poor bear a disproportionate policies and practices to enable the market burden of a hotter planet. Thermal comfort is not transformation for high-impact space cooling a luxury but a human right for all. Implementing technologies. Deploying ‘living laboratories’ a sustainable cooling strategy for India presents for thermal comfort – spaces where users and a multi-sectoral opportunity for the country to researchers can collaborate and create energy- meet its development and climate goals, and for efficient solutions for affordable cooling – will those at the bottom of the economic ladder to enable the government to pilot multi-stakeholder avoid one of climate change’s most destructive engagement and new technologies. So too will human hazards. Thanks to the eight investment supporting the development of sustainable opportunities outlined in this study, India’s and energy-efficient cold chains, incorporating government, multilateral development banks, effective monitoring systems, and promoting financiers, the private sector and civil society better operations and servicing through the now have a chance to make ICAP an actionable capacity building of all stakeholders. reality. What is Concessional Finance? Concessional finance is below market rate finance provided by major financial institutions, such as development banks and multilateral funds, to developing countries to accelerate development objectives. The term concessional finance does not represent a single mechanism or type of financial support but comprises a range of below market rate products used to accelerate a climate or development objective. Climate Investment Opportunities in India’s Cooling Sector 33 Chapter 1: Introduction 34 Climate Investment Opportunities in India’s Cooling Sector 1.1 Cooling India: Development Prerogatives and Need for Sustainable Cooling 1.2 Study Objectives and Methodology Climate Investment Opportunities in India’s Cooling Sector 35 1.1 Cooling India: Development productivity. India, with its predominantly tropical climate, is experiencing escalating Prerogatives and Need for temperatures along with population growth Sustainable Cooling and rapid urbanization, contributing to a steep increase in cooling demand for which India 45. India will witness rising temperatures will require massive cooling infrastructure and heat stress due to climate change and across sectors.31 Currently, in India, the wet- will require massive cooling infrastructure bulb temperatureiii during the worst heat waves to mitigate negative impacts on health and rarely, if ever, exceed 32°C (degree centigrade).1 Figure 1: Rising temperatures across India i Wet-bulb temperature is an indicator that combines air temperature and relative humidity. It provides a more accurate measure of heat iii stress on the human body than air temperature alone. 36 Climate Investment Opportunities in India’s Cooling Sector However, climate models project that these access to sustainable cooling, around 160- temperatures could exceed the survivability 200 million people could be exposed to lethal threshold (that is, 35°C) at a few locations in heat waves as early as 2030 in India annually. the Chota Nagpur Plateau and North-Eastern Under a Business As Usual (BAU) scenario for India under future climate scenarios of the air-conditioning growth till 2030, only about Intergovernmental Panel on Climate Change’s half of the population will have access to air- (IPCC’s) Fifth Assessment Report, known as conditioning.1 Access to cooling for the rest of Representative Concentration Pathway (RCP) the population will require the implementation scenarios. Wet-bulb temperatures are projected of other measures. As of 2017, heat-exposed to approach the 35°C threshold under RCP8.5 workiv contributed to about 50 percent of India’s scenario by the end of the 21st century over the Gross Domestic Product (GDP), drove about Ganges River valley, North-Eastern India, eastern 30 percent of the country’s GDP growth, and coast of India, and Chota Nagpur Plateau. 32 employed about 75 percent of its workforce, i.e., Under the RCP4.5 scenario, vast regions of 380 million people.1 Ensuring thermal comfort for South Asia are projected to experience episodes all will be critical to mitigate negative impacts on exceeding 31°C, which is considered extremely health and productivity. dangerous for most humans. Urban heat-island effect may amplify the effects in urban or peri- 46. Sustainable cooling can support India’s urban centers exposed to these temperatures.1 development and help in a green recovery Without targeted adaptation actions that provide from COVID-19. Cooling is a developmental i As per the McKinsey (2020) study, exposed sectors include exclusively outdoor sectors such as agriculture, mining and quarrying as well iv as indoor sectors with poor air-conditioning penetration including manufacturing, hospitality and transport. Climate Investment Opportunities in India’s Cooling Sector 37 38 Climate Investment Opportunities in India’s Cooling Sector • Basha, G., Kishore, P., Ratnam, M. V., Jayaraman, A., Kouchak, A. A., Ouarda, T. B., & Velicogna , I. (2017). Historical and Projected Surface Temperature over India during the 20th and 21st century. Scientific Reports, Vol. 7 (Article No. 2987). • Rohini, P., Rajeevan, M., & Mukhopadhay, P. (2019). Future projections of heat waves over India from CMIP5 models. Climate Dynamics ,53, Pages 975–988. • Kumar, S. (2020, December 21). Sustainable Cooling is a Super Cool Idea for India. • McKinsey. (2020). Climate risk and response: Physical hazards and socioeconomic impacts. Will India get too hot to work? . McKinsey Global Institute. • IEA. (2019). Cooling on the Move: The future of air conditioning in vehicles. Paris: International Energy Agency. • IEA. (2018, May). The Future of Cooling: Opportunities for energy-efficient air conditioning. • Maithel, S., Chandiwala, S., Bhanware, P., Rawal, R., Kumar, S., Gupta, V., & Jain, M. (2020). Developing cost-effective and low-carbon options to meet India’s space cooling demand in urban residential buildings through 2050. India Energy Transformation Platform. • Dearman. (2015). Cold chains and the demographic dividend. Dearman. • MoEFCC ICAP. (2019). India Action Cooling Plan. New Delhi: Ministry of Environment, Forest and Climate Change (MoEFCC), Government of India. Climate Investment Opportunities in India’s Cooling Sector 39 necessity and will contribute to the achievement 47. Cooling will contribute to the increase of several Sustainable Development Goals in refrigerant and energy consumption and (SDGs) including no poverty (SDG 1), zero Greenhouse Gas (GHG) emissions with space hunger (SDG 2), good health and wellbeing cooling having the largest share amongst all (SDG 3), affordable and clean energy (SDG 7), sectors. Annual carbon emissions from space decent work and economic growth (SDG 8), cooling in buildings, Mobile Air Conditioning sustainable cities and communities (SDG 11) and (MAC) (i.e., for passenger transportation), climate action (SDG 13). A sustainable cooling refrigeration (domestic and commercial), cold strategy for India will also help in post-COVID chains (agriculture and pharmaceuticals) and recovery by creating jobs, securing the supply industrial process cooling in India stood at chains of medical care products and food, and 208.7 metric ton of carbon dioxide equivalent boosting the economy. 33 The development of (mtCO2e) in 2017,28 which was 8 percent of the agriculture cold chain sector alone has the India’s total GHG emissions in 2016 (i.e., 2,531 potential of creating 1.7 million jobs. 23 Further, mtCO2e).34 Figure 2 shows that space cooling in the servicing of low-Global Warming Potential buildings has the largest current and projected (GWP) refrigerant air-conditioning units is cooling demand, refrigerant demand, energy expected to see a 10-fold increase in jobs over consumption and associated GHG emissions as the next two decades from a base of 0.2 million compared to other sectors, namely cold chain technicians in 2017 to 2 million.15 and refrigeration and passenger transport air- conditioning. M TR: Million Tonnes of Refrigeration MT: Million Tonnes mtoe: Million Tonnes of Oil Equivalent mtCO2e: Million Tonnes of Carbon Dioxide Equivalent (↑XX): Indicates the increased value in 2037 Figure 2: Annual growth in cooling demand, refrigerant demand, energy consumption and GHG emissions28, 5 40 Climate Investment Opportunities in India’s Cooling Sector 1.2 Study Objectives and sectors, covering residential and commercial buildings, cold chains for agriculture and Methodology pharmaceuticals, refrigeration, passenger transport and industries. The plan provides “an 48. The ICAP was launched to provide integrated vision towards cooling across sectors sustainable cooling and thermal comfort encompassing, inter alia, reduction of cooling for all while securing environmental and demand, refrigerant transition, enhancing socioeconomic benefits for the society. energy efficiency and better technology options Anticipating the multifaceted cooling energy with a 20-year time horizon (2017-18 to 2037- trends and challenges that India would have 38)”, covering short-, medium- and long-term to confront, the Government of India launched recommendations.11 ICAP highlights synergies of ICAP in 2019. It presents a multistakeholder its recommendation with existing governmental driven comprehensive framework for achieving schemes and programs. Figure 3 presents its a sustainable cooling roadmap across various thematic areas and goals. Thematic Area • Space Cooling in Buildings • Refrigeration and Air-Conditioning • Air Conditioning Technology Servicing Sector • Cold-chain and Refrigeration • Refrigerant Demand and • Transport Air Conditioning Indigenous Production • Research & development Goals • Reduce cooling demand across sectors • Recognize “cooling and related areas” by 20% to 25% by 2037-38 as a thrust area of research under • Reduce refrigerant demand by 25% to national Science & Technology Program 30% by 2037-38 • Training and Certification of 100,000 • Reduce cooling energy requirements servicing sector technicians by 2022-23, by 25% to 40% by 2037-38 synergizing with Skill India Mission Figure 3: Thematic areas and goals of ICAP5 49. The World Bank study aims to develop • Identify additional opportunity areas an actionable roadmap comprising policy, which have not been covered in the investment and knowledge interventions to ICAP but are critical to a sustainable help achieve ICAP goals. The study has taken cooling pathway for India, such as forward the ICAP analysis and recommendations demand side interventions in space by: cooling, heat stress in cities, etc.; and • Proposing short-term (2022-24), medium- term (2025-30) and long-term (2031-38) • Prioritize sustainable cooling opportunities interventions in each cooling sector to: for concessional financing and private • Implement the ICAP recommendations; sector investments. Climate Investment Opportunities in India’s Cooling Sector 41 50. The study undertook extensive literature as job creation potential, and so on). The key review and stakeholder consultations to arrive barriers for unlocking each opportunity area at prioritized opportunities in the cooling were identified through literature review and sector. A series of interconnected steps were extensive consultations with government and followed to identify holistic, inclusive, viable, private sector stakeholders. This included specific and scalable interventions that can identification of the associated institutional, operate through partnerships with various financing, regulatory and market barriers actors and add impetus to the implementation and required interventions. The study has of ICAP goals. The study focused on all followed a highly consultative process to help identified thematic areas under ICAP including identify and prioritize opportunities and their space cooling in buildings, cold chain and associated interventions which are pragmatic, refrigeration, transport air-conditioning and implementable and have the desired interest refrigerants (covering the ICAP thematic and buy-in of the key stakeholders in all cooling areas of Research and Development (R&D), sectors and across their value chains. refrigerant demand & indigenous production, and refrigeration & air-conditioning servicing 51. This World Bank study identifies eight sector). As a result, it presents actionable sustainable cooling opportunities where roadmaps for each of the cooling sectors as well multilateral development banks and financial as prioritized opportunities for concessional institutions can play a significant role in financing and private sector investments. The advancing the goals of ICAP in India. The study roadmaps have also identified aligned national began by analyzing the landscape of sustainable and state policies for convergence as well as cooling interventions which were clustered based key stakeholders required for planning and on institutional set up, ease of implementation implementation. To begin with, an extensive and complementarity of actions. This clustering literature review was carried out under this resulted in a total of 10 opportunities in space study, with a detailed analysis of the existing cooling, four in cold chain and refrigeration, policies, programs and initiatives in India that are two in passenger transport air-conditioning directly or indirectly relevant to the multisectoral and three in refrigerant sectors. Following actions recommended under ICAP. This analysis this, a multi-criteria prioritization framework covered the existing governmental schemes and was applied. The criteria assess climate and programs mapped in ICAP and went beyond to development benefits and implementability for identify any other relevant policies and programs all clustered opportunities. The analysis has to identify areas for strengthening existing been presented as part of the sectoral chapters policies and formulating new ones in each of the in this report. Further the role of concessional cooling sectors. Building on the ICAP sectoral financing and private sector investments was analysis for cooling demand, energy savings evaluated leading to prioritization of eight key and emission reduction, the study identified key clustered opportunities where Multilateral opportunity areas for cooling in each sector and Development Banks (MDBs) and Financial collected data on their investment potential or Institutions (FIs) can play a significant role in market size and developmental benefits (such advancing the goals of ICAP and sustainable 42 Climate Investment Opportunities in India’s Cooling Sector cooling in India. The multicriteria framework short, medium, and long-term interventions. The is explained in detail in Annex 1. The sectoral roadmaps for the remaining opportunities are chapters present actionable roadmaps for the provided in Annexes 2 to 5. prioritized clustered opportunities covering Climate Investment Opportunities in India’s Cooling Sector 43 Chapter 2: Space Cooling 44 Climate Investment Opportunities in India’s Cooling Sector 2.1 Summary 2.2 Sectoral Overview 2.3 Landscape of Cooling Opportunities in the Sector 2.3.1 Reduce Demand by Integrating Passive Measures in Buildings 2.3.2 Improve Efficiency of Cooling Technologies 2.3.3 Shift Demand to District Cooling Technologies 2.3.4 Adapt Cities to Manage Heat Stress 2.4 Prioritized Opportunities for Concessional Finance 2.4.1 Mainstream thermal comfort parameters in affordable housing policies and programs at the national and state levels 2.4.2 Enable market transformation towards super-efficiency for high energy impact cooling technologies 2.4.3 Support uptake of tri-generation and district cooling systems 2.4.4 Mainstream passive cooling measures in urban planning Climate Investment Opportunities in India’s Cooling Sector 45 2.1 Summary 55. Together these four key impact areas detail a holistic approach to meeting space cooling 52. Exponential growth is projected in space requirements sustainably by prioritizing cooling demand over the next two decades, ‘thermal comfort for all’ and facilitating cooling making it the largest opportunity for achieving access, while reducing the impact on the ICAP goals. India will witness 2-2.5x growth in electricity system. floor area across residential and commercial buildings between 2018-38.5,35 Climate benefits in this upcoming building stock can be 2.2 Sectoral Overview maximized if passive measures are combined with efficient technology adoption. 56. Sustainable space cooling interventions need to prioritize ‘thermal comfort for all’ and 53. Integrating passive cooling strategies facilitate cooling access while reducing impact in buildings can achieve a 20-30 percent on the electricity system. Space cooling is the reduction in projected energy use in 2038.35 fastest growing energy use in buildings globally. This has significant potential to improve At least 45 percent of India’s peak electricity thermal comfort, especially for vulnerable demand in 2050 is expected to come from communities in affordable housing with limited space cooling alone.13 This will require sizable access to space cooling technologies. Similarly, investments in creating costly peak generating integration of passive measures such as blue- capacity and result in a significant increase in green infrastructure in city planning can reduce GHG emissions, unless suitable low energy urban temperatures and cooling energy alternatives are available to meet thermal demand. Each 1°C drop in air temperature has comfort needs in buildings. Access to space been found to lower peak electricity demand for cooling is also a development need, crucial cooling by 2-4 percent. 36 for wellbeing and productivity in hot climate countries such as India. Within this context, the 54. Efficient cooling technologies have the space cooling strategy lists four key impact potential to achieve 30 percent energy savings areas detailing an approach to meeting space from projected demand by 2038. 5 Robust cooling requirements sustainably:37 efficiency standards and market transformation initiatives that address higher upfront costs, i. Reduce demand by integrating passive especially for high impact cooling technologies measures in buildings; such as ceiling fans, room air-conditioners ii. Improve efficiency of cooling and chillers can support the transition to best technologies; available technologies sooner. In areas with iii. Shift demand to district cooling significant cooling demand, shifting to highly technologies; and efficient District Cooling Systems (DCS) is iv. Aid cities’ adaptation into managing recommended. 30 percent of the commercial heat stress. space cooling demand in 2038 can be potentially met through DCS, if viable business 57. Climate benefits can be maximized when and implementation models are established in passive measures are combined with efficient the Indian context. 17 technology adoption. The four strategic 46 Climate Investment Opportunities in India’s Cooling Sector interventions focus on demand reduction and health impacts, especially in urban areas through passive measures in buildings and due to heat absorption by built-up area, further cities as well as supply-side solutions through reiterate the need for passive cooling measures efficient cooling technologies. The interventions in buildings and urban development. are closely interlinked and provide a holistic response for achieving sustainable space cooling. Passive cooling measures limit heat gain 2.3 Landscape of Cooling inside buildings and improve thermal comfort. Opportunities in the Sector These measures are the first step towards meeting cooling requirements sustainably and 2.3.1 Reduce Demand by are especially important as a large section of the Integrating Passive Measures in population might have limited access to cooling Buildings technologies for meeting thermal comfort requirements. They also help in reducing overall 58. India will witness significant growth demand for cooling and associated energy in floor space; hence, it is imperative to consumption and GHG emissions, even when construct efficient buildings. Figure 4 cooling technologies, such as air-conditioning, shows the projected growth in residential are used. Meeting this cooling demand through and commercial floor area over the next two efficient cooling technologies in buildings, decades. Passive cooling measures help in and through district cooling technologies that improving thermal comfort and reduce the aggregate cooling demand across multiple need for active cooling in buildings. Policies buildings, can further significantly reduce and investments must prioritize climate cooling energy requirement, including peak responsive construction to avoid long-term power demand. Finally, the interlinkages lock-in of inefficient building stock. As per between overheating and adverse productivity Figure 4: Projected growth in commercial and urban and rural residential floor space5, 35 Climate Investment Opportunities in India’s Cooling Sector 47 International Finance Corporation (IFC), the a market instrument can significantly help green buildings market in India will have in limiting energy use and GHG emissions an investment potential of about US$1.25 from space cooling. The residential building trillion for residential buildings and US$228 energy code – Eco Niwas Samhita (ENS)40 – billion for commercial buildings by 2030.14 is currently voluntary, as it is not supported by the Energy Conservation Act 2001 in its 59. Electricity use in the residential current form. It is, however, expected that sector is nearly three times that of the the Act will be modified soon to include commercial sector. India’s residential residential buildings as a key sector with sector is responsible for 24 percent of the potential for energy efficiency measures. total electricity use in the country 38 which This amendment will enable states to is projected to increase to 39 percent in mandate the adoption and enforcement 2047, overtaking industry to be the highest of ENS. Energy and cost-benefit analyses electricity consuming sector. Space cooling 39 show that the implementation of ENS is expected to contribute a significant share Part 1 (building envelope) is cost-effective of this electricity use. As per a recent study and requires around 1-2 percent of that evaluated the long-term space cooling additional construction cost for integrating demand for meeting thermal comfort passive building envelope measures.35 requirements for all urban households Though first costs are low, developers in India, close to 30 percent reduction in will need a business case combined with projected cooling energy requirement effective enforcement mechanisms for can be achieved in 2050 through efficient code implementation. Making efficient building envelope measures alone. A building materials and technologies easily combination of successively stringent codes accessible and bridging the additional cost in new buildings and retrofitting of existing through market transformation approaches buildings can save almost 100 terawatt- combined with construction guidance hour (TWh)/year of electricity by 2040 and and skill-based training can significantly 180 (TWh)/year by 2050. Additionally, the help with code implementation in the study estimated that the reduction potential initial phase. Code implementation can increases to over 50 percent, if both passive substantially reduce the projected growth measures and efficient cooling technologies of GHG emissions from space cooling are prioritized.35 demand in the residential sector. It also has high potential for development benefits 60. Residential building energy code in terms of health and productivity gains implementation can significantly reduce for occupants due to improved thermal the projected growth in space cooling comfort as well as creation of new jobs in demand. In new residential buildings, the sector. This opportunity also scores high implementation of mandatory building on technical feasibility as solutions exist; energy codes and green building ratings as however, large-scale implementation will 48 Climate Investment Opportunities in India’s Cooling Sector depend on effective enforcement by urban comfort parameters and space cooling local bodies. requirements of occupants. Housing built since 2000 will still be around till 2050. 61. The Pradhan Mantri Awas Yojana (PMAY) This, as well as housing to be built in the can be leveraged to effectively mainstream near future, will need to adapt to respond passive cooling measures in government- to a changing climate with higher average supported housing construction. PMAY summer temperatures, frequent and was launched in 2015 by the Government of more intense heat waves and increasing India. It aims to construct 11.2 million houses temperatures due to Urban Heat Island under the PMAY-Urban mission and around v (UHI) effect in urban areas. There is, hence, 29.5 million rural houses as part of the PMAY- an urgent need to also focus on identifying Rural vi mission. Government-supported retrofitting solutions that are suited to affordable housing programs hence provide India’s construction context, especially for a significant opportunity for integrating social housing. While significant climate passive measures in a large segment of new and development benefits are envisaged residential construction leading to direct from housing retrofits, there are challenges climate benefits. Additionally, improving due to lack of appropriate technical thermal comfort in social housing is critical solutions and policy support. Fuel poverty for equitable and sustainable cooling and weatherization assistance-related access in low-income households, resulting retrofit programs in the U.S. and Europe, in significant development benefits. respectively, provide vital entry points to assess various programs, including 62. Retrofitting houses and upgrading governance and financing instruments that them to meet energy efficiency and thermal can be adapted to India’s context.41 comfort standards will become crucial in the near future. India’s residential sector 63. The Energy Conservation Building has been growing rapidly and building Code (ECBC)vii is a key policy for new energy policies have rightly focused on new commercial buildings to integrate energy buildings first, as it is easier and relatively efficiency measures. All non-domestic more cost-effective to integrate passive buildings are addressed together in measures in new buildings than retrofitting India’s ECBC. Commercial buildings are later. However, in another decade, India’s responsible for nearly 8 percent of the total rate of construction is likely to start declining. electricity use in the country currently.38 Experts also point out that current housing Commercial buildings have significant construction is not accounting for thermal cooling energy demand as the adoption and i v PMAY: Government of India’s affordable housing mission provides direct monetary assistance or subsidised credit towards construction of low- and middle-income housing. https://pmaymis.gov.in/ vi https://pmayg.nic.in/netiay/home.aspx vii ECBC was released in 2007 and revised for stringency in 2017. The code includes guidance on building envelope, heating, ventilation and air-conditioning, other building services, and also renewable energy integration in commercial buildings. It is applicable to all new commer- cial buildings that have a connected load of 100 kW or greater, or a contract demand of 120 kVA or greater. Climate Investment Opportunities in India’s Cooling Sector 49 intensity of air-conditioning is high. As per to cities where construction rates of large ICAP, approximately 50 percent of the total commercial buildings are higher. Voluntary commercial floor space in 2038 is likely to be green building ratings systems (for example, air conditioned. ECBC is a key policy for new Leadership in Energy and Environmental commercial buildings to integrate energy Design (LEED), Green Rating for Integrated efficiency measures and is applicable to Habitat Assessment (GRIHA), Indian Green all large nondomestic buildings including Building Council (IGBC), Excellence in offices, malls, hotels, hospitals, airports, Design for Greater Efficiencies (EDGE)) have educational institutions, and so on. ICAP been more successful in the commercial estimates that rigorous implementation of building segment than residential buildings, ECBC can reduce around 32 million Ton especially driven by first movers in the of Refrigeration (TR), nearly 23 percent of market, and supported by organizational the total projected cooling demand of 140 policies of large corporations requiring million TR in new commercial buildings by green buildings. These are a useful market 2037-38. While around 20 states and union mechanism to drive the construction of territories have notified adoption of ECBC, energy efficient commercial buildings. and a further 48 urban local bodies across eight states have also included them in 64. Commercial building retrofit programs modified building by-laws,42 implementation need to integrate building envelope by urban authorities is still limited and varies solutions. Retrofitting of commercial buildings considerably across cities. 43 Multiplicity of in India has largely focused on replacing government departments, lack of capacity cooling technologies and other appliances, within these to enforce, and reluctance on including lighting, with limited building the part of building developers and the envelope upgradation. Similarly, retrofitting absence of a strong enforcement framework has not been a focus of commercial building are key reasons for the slow implementation energy policies. There is a need for R&D process.44 A recent report by the Ministry for building envelope solutions as well as a of Environment, Forest and Climate roadmap for retrofitting commercial buildings Change (MoEFCC) on operationalizing in the near term. ICAP recommendations for space cooling lists actions to be taken by a number of 2.3.2 Improve Efficiency of government ministries and departments to Cooling Technologies integrate ECBC within their construction activities. 42 This will help facilitate ECBC 65. ICAP classifies building-level cooling implementation across a large segment technologies into three categories. of government-led construction. However, ICAP discusses three types of cooling implementation by the private sector is technologies: refrigerant based (room air also needed. This requires a renewed conditioners and central air-conditioning focus on plugging in implementation gaps, systems), non-refrigerant based (fans and especially by providing focused support air coolers) and not-in-kind technologies 50 Climate Investment Opportunities in India’s Cooling Sector (such as radiant cooling,viii indirect direct and in urban and rural areas. Ceiling fans evaporative cooling, etc.).ix are the most used type of fan, representing nearly two-thirds of the annual sales.45 ICAP 66. Nearly 52 percent of the total space estimates a growth in the stock of fans from cooling electricity consumption is attributed 450 million units (2017-18) to 950 million units to the adoption of a single technology – (2037-38), with a potential to save 20 TWh Room Air Conditioners (RACs) – largely by 2038 through efficiency improvements. used in residential buildings. Hence, the residential sector is likely to drive space 68. Central air-conditioning systems cooling demand in the next 20 years. RACs [chillers, Variant Refrigerant Flow (VRFx) and will also account for 88 percent of the total packaged Direct Expansion (DXxi)systems] refrigerant-based technology stock in 2037- are used in large commercial buildings 28. RAC stock is projected to increase from and will account for 24 percent of the total about 55 million TR (2017-18) to 633.5 million space cooling electricity consumption in TR (2037-38), with a potential to save 100 TWh 2038. Amongst these, the larger savings by 2038 through efficiency improvements. 5 potential is envisaged in chiller-based Currently, less than 10 percent of Indian applications, representing nearly 72 percent households has access to air-conditioning. of the total savings potential of 45 TWh from ICAP estimates that, by 2037-38, access will the three technologies in 2037-38.5 increase to about 40 percent households, with much higher adoption in urban areas as 69. Enable market transformation towards compared to rural households. super-efficiency for high energy impact cooling technologies. Figure 5 summarizes 67. Most Indian households will continue the energy savings opportunity for the six to rely on non-refrigerant-based cooling key cooling technologies discussed above, technologies such as fans and air coolers. across the reference and intervention Air conditioner access is likely to be limited scenarios as estimated by ICAP. In the 2037- due to high upfront and operational costs 38 intervention scenario, efficiency savings and the requirement of reliable electricity of RACs are the most significant, followed by supply, especially in rural areas. Hence, in chillers and fans. Interventions are needed the next two decades, a significantly higher to align the market to super-efficient/best percentage of households will rely on non- available technology standards along with refrigerant-based cooling technologies. suitable incentives to increase their adoption Fans and air coolers are low-energy and low- amongst consumers. Hence, market cost non-refrigerant-based technologies transformation towards super efficiency that are widely used across building types represents a key priority opportunity for i viii Radiant cooling provides cooling by circulating cooled water through pipes embedded in floors, ceilings, etc., to absorb heat from the room. ix In indirect/direct evaporative cooling, the primary air stream is cooled first with indirect evaporative cooling and then cooled further with direct evaporative cooling. This does not increase the humidity of the supply air. x Variable refrigerant flow. xi Packaged DX (Direct Expansion). Climate Investment Opportunities in India’s Cooling Sector 51 reducing the growth in space cooling administrative feasibility of energy efficiency related GHG emissions. Technical feasibility standards. Additionally, the opportunity can for achieving super efficiency already also lead to significant development benefits exists, and the opportunity scores high on in the form of new jobs within the cooling potential for both large-scale adoption and technology industry. Figure 5: Projected annual energy consumption for key space cooling technologies in reference and intervention scenarios5 70. The efficient performance of central air- performance data for HVAC systems to conditioning systems is highly dependent improve operational energy use in centrally on not just selecting efficient components, air-conditioned commercial buildings. but also on the Heating, Ventilation and Additionally, the current pandemic has also Air Conditioning (HVAC) system design, highlighted the issue of ventilation within operational and maintenance practices. centrally air-conditioned buildings. The Cooling energy performance of commercial possibility of increased transmission of the buildings varies greatly, as commercial Coronavirus and infection rates prompted buildings comprise a large range of building a worldwide discussion on ventilation types from offices, malls, hotels, hospitals, standards and building design. Guidance and so on. The HVAC design, operational for adequate ventilation rates in central air- and maintenance practices are hence conditioning systems along with change in closely linked to the type and use of the standards to efficiently cool and dehumidify building. There is a need for a national air, retrofitting guidance for existing HVAC benchmarking and disclosure policy for systems, and checks for indoor air quality commercial buildings, with a focus on energy monitoring should be established. These, 52 Climate Investment Opportunities in India’s Cooling Sector along with integration of adaptive thermal comfort cooling therefore exists in these comfort standards in the operation of sectors which will lead to high climate commercial buildings, have the potential and development benefits. However, to significantly alter the way commercial large-scale adoption needs concerted buildings are cooled, leading to both direct efforts to match technologies to building climate benefits and development benefits types/cooling requirements and support due to improved indoor air quality. Mixed- demonstration projects. There is also a mode buildings with their reliance on natural need to develop business models to enable ventilation, when weather conditions permit, affordable comfort for productivity in these can also greatly reduce the need for air sectors to spur investment in supply chain conditioning and allow for adoption of low- development. Due to limited adoption of Energy, not-in-kind technologies. not-in-kind technologies, data about growth potential and resultant energy savings 71. Not-in-kind technologies can play a impact are not available. Further research in key role in increasing cooling access to this area is needed to look at solutions for multiple sectors with low levels of comfort meeting thermal comfort and cooling needs cooling penetration. There has been limited of the vast, labor-intensive manufacturing adoption of not-in-kind technologies in sectors. commercial buildings as they need careful assessment for applicability depending 2.3.3 Shift Demand to District on the climate, comfort requirements and Cooling Technologies building use. However, these technologies can play a key role in increasing cooling 72. Large-scale cooling requirements can access to multiple sectors such as be efficiently met through district energy manufacturing, public spaces such as technologies often using Cooling as a railway and bus stations, courts, and so Service (CaaS) delivery models. District on, with low levels of comfort cooling energy technologies such as district penetration currently. Studies carried out cooling or combined cooling, heating and xii in several Indian manufacturing facilities power (tri-generationxiii) have the potential with no or limited access to comfort cooling to reduce cooling energy requirement, found that worker productivity reduced by including peak power demand, and 2-4 percent per˚C above threshold comfort refrigerant requirements considerably. Due temperature. 46 The study also found that to this, the role of distribution utilities also air-conditioning was not an economically needs to be considered in enabling this viable solution in these sectors. A strong transition towards district cooling and CaaS case for access to affordable, low-energy delivery approaches. i xii District Cooling Systems generate chilled water in a central plant which is then distributed to multiple buildings via underground insulat- ed pipes for space and process cooling. Individual buildings benefit as they do not need to install their own chillers or cooling towers and instead purchase chilled water from the DCS operator. xiii Tri-generation (also known as Combined Cooling, Heating and Power),an extension of cogeneration, is a process that provides cool- ing, heat and power generation from a single generator or process. Tri-generation can use a range of fuels such as natural gas, liquefied petroleum gas and biofuels to produce electricity and utilizes a part of the waste heat from the process to generate chilled water for air conditioning or refrigeration using an absorption chiller. Climate Investment Opportunities in India’s Cooling Sector 53 73. Tri-generation has been a relatively un- need to be established in the Indian context explored technology in India. While there to support uptake of large merchant district is some experience on tri-generation, es- cooling systems. In India’s context, DCS pecially in large hospitals, high capex has can consume 20-30 percent lesser power been a challenge for larger uptake. Addi- than the most efficient conventional cooling tionally, there is limited awareness about the solution, but savings become higher, about associated lower energy cost benefits and 60-80 percent, if compared to an average increased reliability due to captive genera- 3-star RAC. DCS potential for India has been tion. Tri-generation can reduce the primary estimated to be nearly 12.57 million TR (≈315 energy demand of a consumer by 60-70 DCS plants) with an emissions reduction percent, increase overall efficiency by al- potential of 6.6 mtCO2e per year by 2037-38 most 75 percent, and cut GHG emissions under an optimistic scenarioxiv with a strong by up to 30 percent.47 With the increase policy push as a city-led initiative. This would in commercial real estate, the market for require an additional investment of US$35.9 tri-generation technology has been estimat- billion.17 ed at 20 gigawatt (GW) in India while cur- rently installed capacity is 1,000 megawatt 75. CaaS models can enable significant (MW). 48,49 Tri-generation plants are highly efficiency gains in operational energy reliant on natural gas currently; however, cooling through better Operation and neither gas supply nor its pricing structure Maintenance (O&M) practices. CaaS is a is established, which is also another signifi- model where consumers pay for the service cant challenge in scaling up the technology rather than the cooling equipment. The most unless alternate fuels like bio-fuels are also widely known model for this is the merchant considered. district cooling system; however, CaaS models can utilize a range of other cooling 74. DCS that aggregate different demand technologies, beyond district cooling. CaaS groups in a CaaS model are still at a very models save the customer the significant nascent stage in India. DCS that aggregate upfront cost of selecting, procuring and different demand groups such as mixed-use installing air-conditioning technology as well development, special economic zones, large as O&M costs, leaving the task of cooling commercial business districts, etc., in a CaaS provision to technology experts. As a result, model [also referred to as merchant district CaaS removes a key energy efficiency cooling by the United Nations Environment barrier of split incentivexv in buildings. This is Programme’s (UNEP’s) study for India] are also a likely opportunity for Energy Service still at a very nascent stage in India with GIFT Companies (ESCOs) to provide sustainable city in Gujarat as a prominent example. 17 and efficient cooling to businesses through Viable business and implementation models innovative pay-per-use financing models. i xiv An optimistic scenario with strong policy push: assumptions include 30 percent of total air-conditioning demand from new commercial buildings and 7 percent of total air-conditioning demand from new residential buildings in 2037-38. xv Split incentive: the developer or building owner has no incentive to invest in efficient equipment as eventual buyers or tenants get the benefit of reduced energy bills. 54 Climate Investment Opportunities in India’s Cooling Sector CaaS models can also extract huge aggregation can provide an opportunity to efficiencies just through better O&M, data discoms to manage their rising peak load and gathering and fine tuning systems to meet further use it as a reliable revenue generator. cooling requirements. Hence, adoption of DCS in areas with high density cooling requirements can reduce 76. The uptake of tri-generation and DCS impact on the electricity grid, including peak by cities will need business models and load and power procurement requirements. supporting policies with clear direction To understand the benefits of this transition, and vision. Based on the above analysis, it utilities should be engaged to evaluate is evident that shifting high density cooling these impacts, including the role of off-peak requirements in cities to district energy tariff structures, large-scale integration of technologies will lead to multiple benefits in thermal storage and renewables in DCS. terms of significant reduction in the growth of space cooling related GHG emissions 2.3.4 Adapt Cities to Manage and averted power generation capacity. Heat Stress While these technologies have been proven in India and globally, high capex and low 78. Design of open spaces and blue-green awareness of the benefits are key barriers infrastructure can significantly reduce for scaling up DCS and CaaS models. heat exposure in cities. Overheating can be evaluated with respect to three criteria: 77. Engaging with electric utilities will Thermal Comfort in Building Design; Loss be beneficial for the transition to CaaS of Productivity Linked to Heat Stress; and and district-energy infrastructure. The Health Impacts Including Heat-Related International Energy Agency (IEA) estimates Illnesses And Increase In Mortality.51 Along that 28 percent of the total electricity with appropriate passive measures in consumption and 45 percent of India’s building design, construction and use of peak electricity demand in 2050 will be efficient cooling technologies to provide from space cooling alone. Peak demand 13 thermal comfort (as discussed in earlier necessitates the need for higher capacity sections), design of open spaces and and infrastructure requirements and has blue-green infrastructure can significantly significant implications for the choice impact microclimates by reducing urban of generators, Renewable Energy (RE) temperatures to increase urban resilience integration, load factors and GHG emissions, to future heat wave incidents. Cities with which in turn drive the Distribution populations greater than 1 million may Companies (discoms) economics.50 It is a experience an annual mean air temperature serious concern because of its impact on the difference ranging anywhere from 1-3°C to financial viability of the already debt-laden 12°C more than their surroundings due to discoms due to the high cost of marginal the UHI effect.xvi,52 Higher temperatures also power generation. Large-scale cooling increase the demand for cooling and use of i UHI refers to the increase in microclimatic temperatures of city regions compared to the surrounding landscape due to an increase in xvi built-up area and impermeable materials, reduced vegetation cover and fewer water bodies, leading to higher heat absorption in cities. Climate Investment Opportunities in India’s Cooling Sector 55 air-conditioning, while adversely impacting level green roofs and walls; urban green the efficiency of cooling technologies. An areas such as street trees, house gardens; increase of every 0.6°C in air temperature public parks; semi natural urban areas and leads to around 0.25–2.5 percent increase urban forests; blue areas such as rivers, in peak electricity demand. Additionally, air- 53 lakes, wetlands, etc.; green areas for water conditioning, along with other combustion management such as sustainable urban processes such as in industries and motorized drainage systems; and all other green transport, further adds to the heat balance in areas in the city.59 Mainstreaming passive a city (through waste heat), creating a vicious cooling measures such as NbS in land use cycle. Global warming is likely to exacerbate planning will have direct climate benefits, this increase in urban temperatures and as well as significant development benefits heat wave incidents. Further, the urban related to health and productivity of people poor are disproportionately affected by in urban areas. However, implementation is UHI impacts and heat stress in cities due to likely to be a challenge. Rapidly urbanizing poor quality housing with limited access to Indian cities face challenges in assigning cooling technologies often located in high land for green spaces, urban forests and density neighborhoods with few open green green corridors due to competing claims spaces. 54 from construction of housing, industry and commercial areas that generate revenue as 79. Mainstreaming passive cooling well as public infrastructure such as roads measures in urban planning is key to and water works, which drive land use strengthening heat resilience in cities. planning in cities.60 Buildings and surface characteristics such as paving and greenery have maximum impact 80. Disaster management plans in India on urban temperatures at local scale. 36 also recognize the need to adopt long- While cool roof programs for existing public term heat resilience measures in cities. buildings and low-income housing have Effective management of heat waves has been piloted by cities in India for almost a come into focus due to the development of decade 55,56,57,58 to achieve multiple benefits urban heat action plans in India. Ahmedabad of thermal comfort in buildings and reduction was the first city in India to come up with of UHI impacts in cities, the recent interest a dedicated Heat Action Plan in 2016.61 in the potential of Nature-based Solutions The Heat Action Plan comprises four key (NbS) provides a much larger framework strategies: operationalizing an early warning to design and embed adaptation solutions system, building public awareness on heat- in urban planning. NbS are essentially an related health risks and recommended umbrella concept for ecosystem-related actions, building capacity of health workers, approaches and can include a range of and implementing measures to reduce heat measures within cities such as building exposure such as building cooling shelters 56 Climate Investment Opportunities in India’s Cooling Sector while also building adaptive capacity through climate change, as part of India’s Nationally initiatives such as the Ahmedabad cool Determined Contributions also provide roofsxvii program, especially for low-income avenues for addressing heat-related risks households. The focus, hence, is largely on and prioritizing key action areas. effective disaster response in the event of an extreme heat wave incident. However, improvement of urban resilience to heat 2.4 Prioritized Opportunities for stress requires long-term measures, such Concessional Finance as integration of NbSxviii in urban design and planning. The National Disaster Management 81. Space cooling presents four key Authority also recommends that long-term opportunities for concessional financing. plans to manage heat stress need to include Amongst all the opportunities discussed in other sectors, and recommendations should the section above, the following opportunities be integrated with Disaster Management have significant potential to leverage large- Plans at all administrative levels in urban scale financing by MDBs, FIs and the private and rural areas, based on hazard risk and sector. These opportunities have strong vulnerability assessment.62 This requires technical feasibility and can be unlocked to actions at two key levels: first, climate change result in high climate and development benefits impacts necessitate prediction of future risk through concessional financing and effective using climate science, especially for heat convergence with public finance. wave incidents, which are likely to be more intense, frequent and of longer duration than Opportunity 1: Mainstream thermal comfort before. Since this measure impacts many parameters in affordable housing policies urban residents, development benefits and programs at the national and state level from integration of long-term measures including in the PMAY Urban Mission and are high. However, implementation in the PMAY-Rural Mission current framework of disaster response Opportunity 2: Enable market transformation is likely to be challenging. To address towards super-efficiency for high energy institutional ambiguity in implementation impact cooling technologies of these long-term adaptation measures, Opportunity 3: Support uptake of tri- such as coordination with urban planning generation and DCS and housing departments, governance Opportunity 4: Mainstream passive cooling frameworks and dedicated finance sources measures in urban planning will need to be identified as a second critical measure. State and city action plans for i Cool roofs reflect incident solar radiation and also efficiently emit some of the absorbed radiation back into the atmosphere, instead of xvii transferring the heat to the building below (ENS, BEE 2018). Cool roofs can reduce indoor temperatures by 2 to 5°C as compared to stan- dard construction and hence help improve thermal comfort, reduce cooling energy, and strengthen heat resilience in buildings xviii IUCN pioneered ‘Nature-based Solutions’ in the late 2000s and defines it as “actions to protect, sustainably manage, and restore natural or modified ecosystems, that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodi- versity benefits” Climate Investment Opportunities in India’s Cooling Sector 57 2.4.1 Mainstream thermal comfort solutions (building blocks, reflective and parameters in affordable housing insulating roof tiles, shading solutions, policies and programs at the and so on). These can be embedded in national and state levels procurement tenders to increase adoption. Skill development programs are required 82. Affordable housing policies and to impart technical know-how of passive programs need to recognize thermal design and construction materials through comfort as an essential criterion for current local skilling centers as well as national-level and future programs such that energy costs skill development programs. There is also a (to achieve comfort) are also affordable for need for sensitizing decision makers about occupants, in addition to the cost of home improving thermal comfort in affordable ownership. housing through passive measures. Additionally, PMAY-Urban, through its 83. PMAY-Urban can be leveraged beneficiary-led construction component, to effectively mainstream passive provides direct monetary assistance to cooling measures in affordable housing beneficiaries for constructing or expanding construction in urban areas. Low-income houses. These self-built houses are outside households are highly vulnerable to impacts the purview of the residential building of heat stress due to poor quality housing and energy code due to the smaller size of the limited access to cooling technologies. In the housing units. Experts believe that more than absence of a mandatory residential building half of the urban housing shortage is likely energy code, there is currently no guidance to be met through self-build housing. State for integrating thermal comfort parameters governments can be directly supported and efficient building envelope-related through technical assistance grants to measures in affordable housing programs. develop a contextual strategy for self-build Ensuring that applicable developer-built, housing within their affordable housing multi-family housing projects within PMAY programs. This should include embedding adopt the residential building energy design guidance on passive measures such code (ENS) is of critical urgency due to the as ventilation, shading, cool (reflective) large number of houses being constructed roofs, and so on, and improving the access through the affordable housing program. and availability of low-cost, efficient building Green credit lines can be provided to materials for these houses. This guidance support states towards technical assistance can be disseminated through self-help along with bridging the additional costs of groups, community participation approaches, residential building energy code compliance local training centers, and so on. in demonstration projects. Additionally, market barriers such as affordability and 84. Guidance on passive cooling measures accessibility need to be addressed for needs to be integrated within the PMAY- high performance building envelope Rural housing mission. PMAY-Rural 58 Climate Investment Opportunities in India’s Cooling Sector provides financial and technical assistance fans and chillers, there is a need to align the to build houses in difficult areas (defined S&L program to transition to best available by poor availability of materials, poor technologies in the market. This requires connectivity, and areas with harsh terrain identification of pathways and timelines and climate), hill regions and integrated for increasing stringency of standards, action plan areas. Like self-build housing combined with periodic impact assessments in the PMAY-Urban mission, guidance for to understand the program’s impact on rural housing should include low-cost, energy savings, upfront costs and market efficient, and simple solutions to integrate share of efficient cooling technologies. passive cooling measures, allowing for the use of local building materials and designs. 86. Increasing adoption of super-efficient These can be supported through local technologies requires interventions to skilling centers. This knowledge and skills address higher upfront costs. Beyond transfer can also be linked to institutional standards, enabling market transformation funding sources beyond PMAY-Rural for high energy impact cooling technologies mission to include nonbanking financial such as ceiling fans and RACs is also companies, microfinance lending, disaster imperative. Higher upfront costs of energy- reconstruction funds, and so on. efficient models are key barriers in the price sensitive Indian market. Most consumers 2.4.2 Enable market tend to focus on mid-segment 3-star-rated transformation towards super- air conditioners, which accounted for a 66 efficiency for high energy impact percent market share in 2018-19.63 Similarly, cooling technologies efficient fans with Brushless Direct Cool (BLDC) motors drastically reduce the 85. Robust energy efficiency standards energy required for a regular fan from 70- are needed to transition to best available 80 watt (W) to 30-35 W but are priced at technologies in the market. Bureau of US$57 which is nearly two or three times Energy Efficiency’s (BEE’s) Standards the cost of economy and standard fans and Labelling (S&L) Program provides (US$20-33) and have an 80 percent market energy ratings (1-to-5-star ratings, one star share.45,64 Interventions are, hence, needed represents minimum efficiency level) for to align the market to super-efficient/best a number of cooling technologies. This available technology standards. Upstream includes mandatory standards for RACs incentives to manufacturers to reduce costs and voluntary ones for chillers and fans and support domestic manufacturing of (beestarlabels.com). Energy standards are BLDC fans should be explored. These can being developed for packaged DX while leverage the government’s Make in India VRF systems are also being considered. To program. Additionally, the government’s achieve ICAP goals for energy reduction Production Linked Incentive (PLI) program from key impact technologies such as RACs, incentivizes domestic manufacturing of Climate Investment Opportunities in India’s Cooling Sector 59 multiple high value RAC components (such providing high-end furniture and white goods as compressors, heat exchangers, expansion on rent to urban consumers. These provide valves) which are key to the efficiency of opportunities to increase adoption of super- RACs. 16 Setting up of new manufacturing efficient air conditioners. Collaborating with infrastructure provides a critical opportunity utilities as part of demand-side management for inclusion of climate-friendly standards. programs can also help in reaching out to The program can be leveraged to achieve a larger number of consumers. EESL has overall higher system efficiencies in RACs. also initiated a national chiller replacement The industry expects a boost in domestic program to increase the market penetration manufacturing capacities due to this of energy-efficient chillers. The program will initiative; however, cost-competitiveness create viable implementation frameworks will be crucial in determining the success for ESCOs through innovative investment the success of the program. The program and repayment models66 to enable market has a budget outlay of US$830 million for transformation for this key refrigerant-based five years, with the possibility of incremental cooling technology. investment of US$1 billion, and is expected to create 400,000 additional jobs [including RAC and light-emitting diode (LED).65 Energy 2.4.3 Support uptake of tri- Efficiency Services Limited’s (EESL’s) bulk generation and district cooling procurement program for fans and the systems Super-Efficient AC program xix –which reduce upfront costs for consumers, should be 87. District cooling technologies will scaled up, with a targeted outreach strategy. benefit from a national roadmap and For example, affordable energy efficient policy, outlining the applicability of DCS fans can be provided through the earlier for greenfield developments. Development discussed PMAY scheme to low-income zones with large-scale cooling requirements households. Program outreach to domestic [minimum 8,000 TR per square kilometer consumers has been a challenge for the (sq km)] such as mixed-use developments, Super-Efficient AC program. Opportunities special economic zones, commercial for aggregating demand for efficient ACs business districts, and so on, should should be evaluated. For example, mid- mandatorily be required to carry out to high-income housing apartments are feasibility assessments for DCS. The policy increasingly sold with fitted-in air conditioners should also encourage the use of alternative by developers, which are likely to be low energy sources in DCS such as waste efficiency. A significant segment of high- heat streams, free cooling through lakes, income consumers is, hence, designed out integration of biofuels, treated wastewater of choosing air conditioners. Similarly, the air and integration of large-scale renewables conditioner rental market has aggregators and thermal storage to assess the impacts i xix EESL’s Super-Efficient AC Program[1] (ESEAP) aims to deploy RACs that are at least 20 percent higher in performance than the best available 5-star rated air conditioner in the market. This amounted to a 5.4 ISEER[1] as compared to the 4.5 ISEER 5 star-rated air conditioners along with a refrigerant specification of low global warming potential of 675 60 Climate Investment Opportunities in India’s Cooling Sector on efficiency and resource use of the DCS depending on the value of incentives they system, as compared to conventional central provide such as land, access to energy air-conditioning systems. sources, access to city-owned wastewater utilities and connections, creating a revenue 88. Viable business and implementation stream for the city.68 In the Indian context, models for tri-generation and district there is a need for an implementation cooling need to be established in the agency, amongst the many stakeholders – Indian context. Pilot projects, especially for urban local bodies, distribution utility or a merchant district cooling systems need to special purpose vehicle – that will need to be supported as this will help in establishing develop institutional expertise of managing and standardizing project development the process of tendering, financing and processes, business models and contracting. setting up a district cooling network, along IFC has recently announced its first direct with other public and private stakeholders. investment in district cooling through a Tri-generation plants currently are highly strategic partnership with Tabreed, targeting reliant on natural gas; however, neither a portfolio of about 100,000 refrigeration gas supply nor its pricing structure are tons servicing industrial, commercial and established. Current gas-based power retail developments, with a mandate to plants in the country are underutilized due invest up to US$400 million in projects for to poor indigenous gas availability and high the next five years in India. 67 Worldwide, prices of natural gas in India. Clarity about district cooling projects are developed gas prices was, hence, mentioned as a key under a wide variety of business models. factor in the uptake of tri-generation plants These business models are categorized by private sector technology providers in by the organizations owning the DCS and the country. Further, though natural gas is operating it. A variety of stakeholders a much cleaner fossil fuel than coal, with such as municipal corporations, national the declining prices of hybrid RExx along and state governments, utilities, building with lowering storage costs, it is worthwhile developers, international finance providers, to explore if new investments in fossil-fuel ESCOs, Smart City special purpose vehicles, based sources compare from a viability as and so on, can invest in such a project. For well as environmental and energy security example, in Dubai, building developers perspective for the uptake of gas-based become multi-utility operators providing tri-generation plants. In March 2021, EESL services such as water, waste, power, cooling signed a memorandum of understanding in integrated townships. Other models in with GAIL (India) Limited to develop tri- cities such as London, Paris and Toronto generation projects in India.69 EESL is also are based on public utilities either making introducing an integrated turnkey solution a direct investment or having a partial stake, for tri-generation and combined heat and i xx Hybrid RE systems are becoming popular as standalone systems that usually consist of two or more RE sources used together to provide increased system efficiency and round the clock power supply Climate Investment Opportunities in India’s Cooling Sector 61 power technology on a zero-capex model. Several forward-looking global cities have EESL will be responsible for the upfront started to target or incorporate issues capital costs and risks, including installation, related to overheating or cooling;54 however, O&M services and will provide metered multiple challenges remain in achieving the heating, cooling and power through a 10-15- full potential of NbS. year cooling, heating and power purchase agreement. Costs will be recovered through 90. Cities will need guidance across savings in consumers’ operating expenses.47 effective measures, implementation and This will support the development of a private sector participation. Guidelines much-needed ecosystem for tri-generation for implementation of local and city-wide projects and financial models along urban cooling measures, such as cool with standard contractual and operating roofs and NbS, can support urban planning processes for ESCOs to develop cooling as frameworks in integrating a response to heat a service model. Finally, scaling up of these stress in city planning. There is also a need technologies will require that cities become for developing business cases for all sizes engaged in a longer-term outlook towards of NbS and especially for private sector meeting space cooling demand as well participation to ensure necessary funding,18,19 as their energy and climate commitments as public funds are likely to be limited. sustainably. Cities need clear incentive Additionally, integration of NbS across structures to become active stakeholders public and private land is also a challenge in DCS adoption as, currently, energy for city authorities. Hence, public-private planning is not a core responsibility for sector partnerships will be critical. Examples cities. Infrastructure development programs of innovative business models exist in such as the Smart Cities Mission can also be India and globally that need to be adapted leveraged for DCS adoption. to quantify and communicate benefits, identify beneficiaries and develop revenue streams.20 For example, Maharashtra’s first 2.4.4 Mainstream passive cooling ever urban forestry project, Warje urban measures in urban planning forest in Pune, was developed by a non- profit along with Tata Motors under a public- 89. Land use planning that combines private partnership model as a Corporate passive urban cooling measures is key to Social Responsibility (CSR) initiative.71 In strengthening heat resilience in cities. NbS Melbourne, the municipality has created are amongst actions that cities can prioritize an urban forest fund, pooling finances from towards equitable access to cooling for all.70 different government departments and real They provide additional benefits of reducing estate firms, to encourage private greening air pollution and protecting biodiversity. in the city. Communities and businesses 62 Climate Investment Opportunities in India’s Cooling Sector can propose projects and have to meet global city-to-city partnerships to exchange 50 percent of the costs while the fund best practices can also support cities in provides the remaining costs. In Malmö, implementing urban cooling measures and a business improvement district program NbS Funding through CSR and philanthropic has been developed through partnerships grants can also be accessed to demonstrate between the city housing associations, pilot solutions and collaboration models. property owners, businesses and civil society to develop solutions to upgrade the Table 1 provides the roadmap for the neighborhood with a focus on developing prioritized opportunities in the space blue-green infrastructure. 59 Knowledge cooling sector. More details on these and alliances through collaboration with local all other opportunities and their proposed academic institutions, civil society and interventions can be found in Annex 2. Table 1: Roadmap for prioritized opportunities in the space cooling sector Climate Investment Opportunities in India’s Cooling Sector 63 64 Climate Investment Opportunities in India’s Cooling Sector DPIIT: Department for Promotion of Industry and Internal Trade; EC: Energy Conservation; EIA: Environmental Impact Assessment; HUDCO: Housing and Urban Development Corporation Ltd.; MoCI: Ministry of Commerce and Industry; MoHUA: Ministry of Housing and Urban Affairs; MoRD: Ministry of Rural Development; NDMA: National Disaster Management Authority; NGO: Nongovernmental Organization; NHB: National Horticulture Board; NIUA: National Institute of Urban Affairs; PHFI: Public Health Foundation of India; PNGRB: Petroleum and Natural Gas Regulatory Board; PWD: Public Works Department; SAPCC: State Action Plan on Climate Change; TCPO: Town and Country Planning Organisation; UDD: Urban Development Department; ULB: Urban Local Body; URDPFI: Urban and Regional Development Plans Formulation and Development Department; ULB: Urban Local Body; URDPFI: Urban and Regional Development Plans Formulation and Implementation Climate Investment Opportunities in India’s Cooling Sector 65 Chapter 3: Cold Chain and Refrigeration 66 Climate Investment Opportunities in India’s Cooling Sector 3.1 Summary 3.2 Sectoral Overview 3.3 Landscape of Cooling Opportunities in the Sector 3.3.1 Development of new energy efficient and sustainable cold chain networks 3.3.2 Improve energy efficiency, integrate RE in existing cold chain infrastructure and strengthen systems 3.4 Prioritized Opportunities for Concessional Finance 3.4.1 Support development of sustainable and energy efficient end-to-end cold chain networks, including refrigerated transport 3.4.2 Promote better operations and servicing through capacity building of all stakeholders and incorporation of effective monitoring systems Climate Investment Opportunities in India’s Cooling Sector 67 3.1 Summary and has been prioritized. The sub-opportunities identified within this offer multiple developmental 91. Presently there exist major gaps in the as well as climate benefits and have policy and cold chain in India and only 4 percent of fresh administrative support at both the state and produce is covered by it.9 While the holding national levels. Based on a current estimation capacity for agriculture produce has grown over of need, studies show that an investment of the past few years, integrated development close to US$11.75 billion is required to develop of the entire cold chain has been inadequate, the physical infrastructure and transport-related resulting in major food and pharmaceutical elements of the cold chain, and modernizing losses. This not only contributes substantially its retail end will require US$1.3-1.9 billion.24 to GHG emissions but also negatively impacts While the NCCD has identified the required India’s food and nutritional security as well as capacity of different cold chain components, health and well-being. Gaps in the cold chain our stakeholder consultations highlighted this infrastructure will need to be filled over the to likely be an underestimation of actual need. coming decades which is projected to increase Further, there is a lack of accurate and reliable the demand for cooling and refrigerant by this information on food and pharmaceutical losses. sector as well as energy consumption, leading to There is a need to carry out a nation-wide higher carbon emissions. The implementation of needs assessment, along with a study to identify proposed interventions to develop an integrated region and subsector-wise losses due to the cold chain network can lead to a reduction in lack of cold chains. These data will help in the refrigerant demand by 10 percent5 and this development of a region-specific action plan study estimates a potential emissions reduction for the development of a sustainable cold chain of 77 mtCO2e annually by 2038. Additionally, network. the study estimates that the market potential and investment opportunity in the cold chain 93. The second opportunity, ‘improving energy and refrigeration sector will be US$29 billion efficiency and integrating RE in existing by 2038, and the sector has the potential to cold chain infrastructure, and strengthening create 1.7 million23 jobs. To achieve this potential systems’ is important to carry out; however, growth in a sustainable manner, it will be given its implementation challenges, it has not necessary to address the barriers of current lack been prioritized. India has the largest footprint of major investment and inadequate supporting of cold stores in the world. A majority of these infrastructure such as roads and power supply.22 cold stores use zero GWP ammonia refrigerant Additionally, the highly fragmented nature of the which makes them energy inefficient and sector is also a major challenge in developing high GHG emitters due to the use of obsolete a sustainable integrated cold chain network; technologies. Modernization of existing interventions would need to be designed to infrastructure, while required, poses a major ensure participation of all key stakeholders. challenge of implementation as the sector is highly fragmented and largely unorganized. 92. This study has identified two key Additionally, low electricity tariffs across the opportunity areas; ‘development of new country for this sector act as a disincentive for energy efficient and sustainable cold chain owners to invest in energy efficiency measures. networks’ is the key opportunity for this sector Similarly, while there is a need for developing 68 Climate Investment Opportunities in India’s Cooling Sector standards and certifications for integration of RE handling and transportation requirements, and and energy efficient design and technologies storage needs. While cold storage capacity in the cold chain, the unorganized nature of the in the country has steadily grown, the NCCD sector poses an implementation challenge for this identified a gap of 3.27 million metric ton (MT) intervention as well. in 2015 for long-term holding of fresh produce.21 This has been somewhat filled in the last few 3.2 Sectoral Overview years and, as of August 2020, the total cold storage capacity in India was 37.4 million MT 94. Major gaps exist in cold chain with 8,186 cold stores, compared to 5,387 cold infrastructure across the country. The storages with a capacity of 24.9 million MT in agriculture cold supply chain network consists 2010.72, 73 However, integrated development of of three important pillars: static infrastructure, the cold chain has been severely deficient, with primarily used for aggregating and storing major essential components not adequately readied goods for onward logistics connectivity; developed. In this regard, the largest gap mobile infrastructure, as connecting links for can be noted in modern packhouses, with a post-production and premarket stages; and requirement of 70,080, indicating an average information flow for regular and dynamic need for one packhouse for every 10 villages information on ready capacity and accessibility (Table 2).5, 21, 23 While main barriers to addressing of requisite infrastructure.21 The pharmaceutical these gaps are a lack of initial investment and industry also relies on a cold supply chain an enabling infrastructure, such as roads and which, for the sector, is extremely complex power, the highly fragmented nature of the and consists of strict parameters for holding industry is also a major shortcoming.22 temperatures, delivery time restrictions, Table 2: Gaps in cold chain infrastructure in India in 2014-155 95. Gaps in the cold chain result in food and 20-25 percent and 10-15 percent of losses, pharmaceutical losses. The current absence of respectively.21, 24 This has a negative impact an integrated cold chain results in major food not just on the environment, contributing 8-10 loss. The total fruit and vegetable loss primarily percent towards annual global GHG emissions, occurs between farms and mandis, where a but also on food security including wasted labor, lack of packhouses with precooling capacity, water, energy, land and other inputs. Food loss inadequate transport facilities and breakages can result in doubling of fruit and vegetable in cold chain each account for 10-20 percent, prices and a 50 percent price rise of milk.74, 75 Climate Investment Opportunities in India’s Cooling Sector 69 The fragmented nature of the cold chain also to meet supply requirements in a sustainable impacts the healthcare sector where a vast manner, along with better demand management proportion of cold storages available are used and forecasting as well as inventory planning. only for agricultural produce. Additionally, In the ICAP, recommendations for this sector are logistics for healthcare is also unevenly outlined for short- and medium-terms and range distributed, being concentrated mainly near across policy, investment, and capacity building. manufacturing hubs.76,77 To fill the gaps outlined The implementation of all interventions can help above, a large amount of mobile and static reduce refrigerant demand in this sector by up to infrastructure needs to be developed; this is 10 percent (Figure 6)5 and an estimated potential projected to increase cooling and refrigerant emissions reduction of 77 mtCO2e annually by demand as well as energy consumption in this 2038. To achieve this goal, we identified two key sector, leading to higher carbon emissions. 5 opportunity areas: (1) support development of new energy efficient and sustainable cold chain 3.3 Landscape of Cooling networks; and (2) improve energy efficiency and integrate RE in existing cold chain infrastructure Opportunities in the Sector while strengthening systems. Within these, multiple sub-opportunities were identified (refer 96. The bridging of gaps in the cold chain and to graphic ‘sectoral pathways for impact’) and are minimization of impacts on the environment discussed in the following sections. require a multi-dimensional approach that includes technology, policy support and training MT Figure 6: Refrigerant demand in cold chain and refrigeration5 70 Climate Investment Opportunities in India’s Cooling Sector 3.3.1 Development of new energy efficient and sustainable cold chain network efficient and sustainable cold is also high, as the equipment, technologies chain networks and expertise required are available in India and globally. 97. Development of sustainable and energy efficient end-to-end cold chain networks, 98. The promotion of better operations including refrigerated transport, is a key and servicing through capacity building opportunity for this sector, offering high and effective monitoring systems can help climate and development benefits. The bring in efficiency in the cold chain and huge infrastructure development required provide significant developmental benefits. to fill the gaps identified in the cold chain, Currently, storage facilities are often when carried out in a sustainable manner, will managed by inexperienced staff unaware help reduce projected energy consumption of the latest technology and techniques as well as cooling and refrigerant demands in handling and storing fresh perishable for this sector. Additionally, interventions produce.75 Building their capacity can help proposed within this sub-opportunity will reduce both food loss and emissions. A help reduce food loss, as studies show that sustainable agriculture cold chain has the investing in precooling and refrigerated potential of creating 1.7 million jobs, both transport in India can help reduce food loss, directly and indirectly, for the management leading to a reduction of CO2e emissions of physical infrastructure and refrigerated by 16 percent.78 The development of a cold transport systems.23 This opportunity also chain also has national and state policy offers climate benefits as an important aspect support as there are presently a number of for reducing losses faced by agriculture and schemes by different national government healthcare industries is capacity building of agencies such as the National Horticulture users at different levels of the supply chain. Board (NHB), Mission for Integrated Food loss can be reduced through improved Development of Horticulture (MIDH) and postharvest handling of produce, and Agricultural and Processed Food Products vaccine and medical loss through improved Export Development Authority (APEDA), handling at the last mile. The technical and that support development of the cold chain. administrative feasibility of this opportunity However, these schemes have all focused is also high as the NCCD and NHB on individual elements of the cold chain, already carry out training on postharvest providing subsidies for the development management for agri-entrepreneurs that of different components.79 While subsidies can be tailored towards farmers and other offered under MIDH were created to fill stakeholders. gaps identified by NCCD, there are still huge holes in the cold chain infrastructure. Thus, 3.3.2 Improve energy efficiency, it is necessary to modify these schemes integrate RE in existing cold chain to ensure integrated development. The infrastructure and strengthen technical feasibility of developing an energy systems Climate Investment Opportunities in India’s Cooling Sector 71 99. Given the large amount of existing 3.4 Prioritized Opportunities cold storages and refrigeration systems for Concessional Finance in the country, there is a need to retrofit them to reduce cooling and refrigerant 3.4.1 Support development of demand as well as energy consumption. sustainable and energy efficient India has the largest footprint of cold stores end-to-end cold chain networks, in the world, and majority of these use including refrigerated transport natural refrigerant gas ammonia (R-717), with zero GWP. Despite this, these cold 101. A sustainable and integrated cold storages are high GHG emitters due to the chain network offers multiple development use of obsolete technologies. Presently, and climate benefits. This opportunity the sector is highly fragmented and largely has high technical feasibility; the presence unorganized with more than 3,500 small and of a conducive policy environment and big players,80, 81 posing a major challenge for administrative structure will all help the implementation of a retrofitting program. support its implementation. To ensure that Additionally, most states across the country development is carried out in a sustainable have very low electricity tariffs which results manner, the opportunity requires large in a lack of incentive for private cold storage investments. NCCD estimates that close owners to invest in energy efficiency to US$11.75 billion is required to develop measures.82 While retrofitting interventions the physical infrastructure and transport- have the necessary technology access related elements of the agriculture cold for upgradation and can provide climate chain, with the biggest investment needed benefits, there are multiple challenge with for building modern packhouses (about its implementation. US$8.5 billion).24 In addition, there is also a need to modernize the retail end of the 100. Development of standards and cold chain, requiring US$1.3-1.9 billion to certification for RE integration and inclusion strengthen the last mile.24 Though most of of energy efficient design and technologies the cold chain in India is privately owned, is an important aspect in developing it has been developed with the support of a sustainable cold chain. Though this subsidies, grants and incentives provided opportunity has high technical feasibility with by the public sector. Assuming that a similar several such standards existing across the model will be followed for the development world which can be adapted for India, it does of new infrastructure and transport not offer significant development benefits as elements, this opportunity offers significant it has limited job creation potential or direct avenues for concessional finance. This can beneficiaries. Additionally, the opportunity be met through grants, loans, credit lines has low GHG mitigation potential compared and subsidies, where the potential source to other opportunities in this sector and poses of funding will vary based on the type of challenges with large-scale implementation intervention, likelihood of returns, scale of due to the unorganized nature of the cold investment needed, etc. chain. 72 Climate Investment Opportunities in India’s Cooling Sector 102. It is important to first identify Group Development Scheme that supports infrastructure gaps and assess sector-wise farmers in building integrated packhouses. losses to build a sustainable large-scale The government will develop 200 such and decentralized cold chain network. An packhouses at a budget of US$6.5 million.84 accessible, affordable, scalable, reliable, climate-friendly and safe cold chain requires a 103. Decentralized cold chains need to be systems thinking approach that considers all developed through support provided to elements, such as temperature requirements farmer groups and agri-entrepreneurs. To of different products, refrigerants, space understand the potential of producer-owned cooling, reefer transport, servicing, capacity supply chains, pilots should be carried out building, RE sources, and so on, with its for different subsectors where an end-to-end application at centralized and decentralized model is demonstrated. In addition to this, levels, depending on requirements. 83 To there is a need to incentivize and support achieve this, it is important to first identify Agricultural Produce Market Committees region-wise infrastructure gaps in cold (APMCs) in developing cold chain links at chain and the losses occurring due to this mandis, particularly for crops that currently do for each subsector. While ICAP outlines not find space in the existing infrastructure. In infrastructure gaps, which are discussed 2018-19, the Government of India proposed above, our stakeholder consultations to upgrade 22,000 existing rural haats highlighted that these numbers might and develop them into Gramin Agricultural be an underestimation of actual need. Markets with strengthened physical Additionally, accurate numbers regarding infrastructure. However, till December 2021, food and pharmaceutical losses are not only 6 percent of haats (local markets) across available and various studies, using different the country were upgraded.85, 86 To ensure methodologies, present differing data. It is that existing mandis and haats are developed also important to know geographic and as integrated cold chain systems, synergies subsector-wise requirements. This needs should be explored with this scheme. It is assessment should lead to the development also necessary to identify alternate business of regional action plans for building large- models for these cold chain links as they would and small-scale sustainable cold supply mainly be used for short-term storage, thus chains, which can be implemented with state requiring different types of investment and governments, private players and farmer ownership models. To develop an effective groups. To support this at a decentralized decentralized cold chain network, there is scale, it is necessary to develop business also a need to explore the potential of leasing models that promote producer-owned cold and renting of cold chain components. Under chains. Additionally, incentives should be the Sub-Mission of Agriculture Mechanization created for Farmer Producer Organizations (SMAM), the government supports renting (FPOs) to become a part of this system of farm equipment and establishment of where they are not just users of cold chain Custom Hiring Centers.87 This scheme can but also owners, thus promoting awareness be expanded to include elements of the of the need for energy efficiency. A cold chain as a pay-per-use renting model similar scheme has been initiated by the where the burden of developing cold chain Government of Haryana called the Crop infrastructure is not on the users and they Climate Investment Opportunities in India’s Cooling Sector 73 pay only for use of cold chains. Further, to establish, building plan, power connection, scale up this opportunity, it would be useful Food Safety and Standards Authority of to develop synergies with initiatives such as India (FSSAI) license, final sanction of term CaaS and implement pilot projects to assess 88 loans, and so on.89 To identify challenges the feasibility of such a system in India. leading to these delays and suggest policy and regulatory measures for effective and 104. There is a need to identify large-scale implementation, there is a need implementation challenges of cold chain to set up a committee. It is important to development schemes and enhance these ensure that this committee comprises all to support development of an end-to end key stakeholders, including farmer groups energy efficient cold chain network. Until and those responsible for implementation. recently, the focus was on developing single Along with bringing in measures for effective commodity cold storages, as these are implementation of this scheme, it is also usually the first point of storage for farmers. necessary to modify existing schemes that Cold stores have also become concentrated support development of individual elements around a few products and in a few regions of the cold chain (by NHB, MIDH and APEDA) in India. Potato or potato seed storage and use an end-to-end approach, ensuring dominates cold store usage, using about that essential elements are not left wanting 85-90 percent of total capacity across the during development. country. Meat, fish, milk and milk products, and other commodities such as chilies, 105. Monitoring the development of account for only 1 percent of total capacity. 22 new cold chain infrastructure will be an While subsidies offered under MIDH were important aspect to ensure that the next developed to fill lacuna identified by NCCD, phase of growth is carried out in a holistic huge gaps in major components still exist manner, not resulting in large gaps, while (Table 2). The Integrated Cold Chain, Value having minimal impact on the environment. Addition and Preservation Infrastructure ICAP recommends the development of scheme, under the Pradhan Mantri Kisan a Management Information System (MIS) Sampada Yojna (PMKSY), aims to provide through inter-ministerial collaboration to cold and preservation infrastructure help track relevant data on infrastructure facilities from farm to fork and promotes development and e-performance monitoring development of all components of the to improve efficiency, along with capacity cold chain for different sub-sectors in the building of key stakeholders for proper agriculture supply chain. While this scheme handling and maintenance of the cold was introduced in 2008, there have been chain. The nodal ministry for development challenges in its implementation. The 17 89 th and implementation of the MIS, and for Report of the Lok Sabha Standing Committee decision making based on it, could be the on Agriculture, Animal Husbandry, and Food Ministry of Agriculture and Farmers Welfare Processing (2020-21) noted that several (MoAFW), with support from other key approved projects were stalled due to national ministries and state governments delays in obtaining statutory approvals representatives. To encourage transparency such as change in land use, consent to and knowledge sharing, the MIS can also have public facing elements. 74 Climate Investment Opportunities in India’s Cooling Sector 106. To achieve potential emissions farm gate and in the rural healthcare sector. reduction in this sector, an important This can be carried out through an incubation aspect in development is RE integration. center, offering support to start-ups and This offers not only an opportunity for climate researchers. To understand the potential change mitigation but also a reduction in scalability of proven technologies, such as the system’s dependence on an unreliable those offered by Ecozen, Inficold and Bharat electricity supply while offering long-term Refrigerations, it is important to assess their economic benefits due to lower O&M application in different regions and support costs. It is important to identify scalable scaling up of promising solutions. technologies that are easily implemented in Indian conditions in both large on-grid as 107. In addition to the agriculture sector, it well as off-grid cold chain links. Feasibility is important to ensure that healthcare also studies should be carried out in collaboration has a well-established and sustainable cold with research institutes and private sector supply chain. This industry currently faces start-ups to understand the potential of gaps in last mile delivery of vaccines and different technologies, such as solar, wind, temperature sensitive medicines, especially biomass, and so on, in different regions in in remote areas.91 During the COVID-19 the country. Presently MIDH offers subsidies pandemic, funds under CSR were deployed for the use of RE and other alternate to strengthen healthcare cold chains, technologies in the cold chain (100 percent with organizations providing equipment of invoice cost, maximum INR 3.5 million per to support the vaccination programs.92 To project). However, there has not been large- ensure end-to-end development of the scale adoption, one of the major barriers healthcare cold chain, CSR funds can be being high initial capital cost of installation 90 further accessed as a source of investment. and lack of the ability to access existing These can help support R&D projects and schemes. To overcome these deterrents, establishment of a center of excellence to business models for decentralized adoption develop and scale up domestic low-cost of RE-based cold chain solutions at the farm solutions for last mile delivery of vaccines or village levels, that can be implemented by and temperature-sensitive medicines. This individual farmers or farmer groups, should center of excellence could also explore be developed. These can be linked to low other aspects of the cold chain where low- interest loans that should be introduced for cost solutions can help scale up energy farmers/users. To scale up adoption of these efficiency. Additionally, there is also a need technologies, there is also a need to create to establish linkages between the health and awareness amongst farmers on their lower food cold chains where multi-commodity O&M costs, along with other benefits, such as cold storages can service both sectors. energy security and availability of subsidies. These can help build last-mile storage and Life cycle costs of alternate technologies delivery solutions for healthcare, especially should also be considered when calculating in remote locations. O&M costs. It is also important to support R&D for the development of low-cost RE 108. Domestic and commercial solutions that can be implemented at the refrigeration, the end of a cold chain, is Climate Investment Opportunities in India’s Cooling Sector 75 a rapidly growing sector in India and it is efficiency refrigerators. Target setting important that this growth is sustainable. programs, such as to EESL’s UJALA for LED Increasing urbanization and improving living bulbs,25 can lead to an increase in market standards are projected to drive refrigerator share of 5-star refrigerators. For replacement ownership from 0.18 per household in 2012 of inefficient refrigerators, there is a need to to 0.64 in 2030. This will have a major develop a similar initiative where incentives impact in terms of energy consumption such as subsidy, on-bill financing and and refrigerant and cooling demands, and differential tax rates are given on purchase it is important that this growth occurs in a of 5-star refrigerators. If a program like sustainable manner. Presently, the market UJALA is developed for refrigerators, it will is dominated by single- and double-door, be important that high costs, installation and 1- to 3-star rated domestic refrigerators. maintenance as well as disposal challenges While 5-star refrigerators consume 30- are addressed. Additionally, the program 35 percent less energy compared to a should be carried out alongside building 3-star refrigerator, their higher cost is a public awareness on purchase cost versus major deterrent to adoption. Till there is 45 equipment life cycle (operational) costs. a substantial price difference, the market This can be tied to retrofitting and recycling will continue to be dominated with sale of programs for the replacement of inefficient lower efficiency refrigerators. It is necessary appliances, where consumers are provided to bring in market transformation programs additional incentives when replacing that help reduce costs of higher efficiency old refrigerators. Adoption of inverter refrigerators. In India, the domestic technology in RACs in Japan and China refrigeration manufacturing industry includes has been extremely successful with 100 major global players, with well-established percent and 50 percent market adoption, R&D. While the sector is price sensitive respectively. Models followed in these and competitive, there might be potential countries can be studied and adapted for for developing incentives and tax breaks replication in the Indian refrigerator market.93 for upstream manufacturers of component Further, R&D for the development of low- technologies. To support these measures, cost alternate energy refrigerators that can synergies with initiatives under Make in be used in rural areas should be supported, India need to be identified to help reduce along with exploring the potential of scaling component costs. Additionally, there is also up existing technologies such as ChotuKool a need to support R&D for those component and MittiCool. Currently, there is a wide technologies currently not being produced difference in refrigerator ownership in urban in the country or where cost of production and rural households. In rural areas, even in is too high. Research and market support the highest income category, less than 50 can help in bringing down costs of these percent of households own refrigerators components, driving down prices of higher whereas, in urban areas, even in the lowest efficiency appliances. income group, refrigerator ownership is above 50 percent.94 It is important that 109. Incentives and market transformation growth of the rural refrigerator market initiatives can help promote higher occurs along with adoption of higher 76 Climate Investment Opportunities in India’s Cooling Sector efficiency appliances. To ensure uptake of 111. It is necessary to ensure that this low-cost solutions, manufacturing should be sector’s growth occurs in a sustainable supplemented with marketing support, as manner. There is a need to extend policy appliances such as refrigerators are seen as support for adoption of alternate cooling an aspirational purchase and the tag of low- technologies in refrigerated transport, cost can be a deterrent to acceptance. 95 especially for proven and commercially viable technologies, such as phase change 110. There is a large gap in availability of material and thermal energy storage. refrigerated vehicles to meet the demand This should include extending the recent in the country. An important component of draft Automotive Industry Standard (2021) the cold chain is refrigerated vehicles. An under consideration on “Constructional NCCD study estimated that, in 2015, there and Functional Requirements for Insulated were about 7,000-9,000 reefer (refrigerated) Vehicles” to incorporate energy efficiency vehicles in India, catering to only about parameters, apart from the existing 12-15 percent of the country’s storage parameters of design and performance of capacity; the number was projected to rise refrigerated transport systems.97 Further, to 13,000 in 2017-18.5,96 The reefers mostly creating linkages with the Faster Adoption cater to frozen processed foods, imported and Manufacturing of Electric Vehicles products and the pharmaceutical sector, not (FAME) scheme to incorporate adoption to domestic supply of fruits and vegetables. of fuel-free technologies for refrigeration This is partly due to lack of packhouses, of reefers, as part of the subsidies offered which results in these commodities not under it, will help in promoting adoption. It being part of the cold chain in the first place. is also important to develop infrastructure The dairy industry uses about 30,000- support for the reefers by leveraging 40,000 vehicles to transport milk; however, schemes such as FAME II and National these are insulated not refrigerated trucks. Electric Mobility Mission Plan (NEMMP) Though there exists a gap in this section of that are developing charging stations for the market as well, with not enough trucks e-vehicles to also include infrastructure for being available to fulfil demand. A majority charging of refrigeration equipment. of cold stores, up to 79 percent, also do not own transport systems and, as a result, there 112. The unorganized nature of the sector is a growing disconnect between transport requires the development of incentives and storage units. 9, 24 Though, by 2025, and alternate business models to bring in the number of reefer vehicles is forecast to energy efficiency. As cold chain logistics increase to 246,000, feasibility projections are presently operated by a fragmented and (based on affordability) show a demand of informal sector, it is important that owners 755,953 units, and aspirational projections are incentivized to move their fleets to (assuming cold chain capacity reaches the electric and non-fossil fuel-based cooling. same per capita level as the UK) show a These incentives can be fiscal in nature or be demand of 2,415,947 units, highlighting implement through replacement programs, the gap that will still remain in this segment along with the provision of low-interest loans. despite significant growth. 9 In the long term, it should be mandatory to use only electric and non-fossil fuel-based Climate Investment Opportunities in India’s Cooling Sector 77 cooling in all refrigerated transport. There chain links developed through rail and is also a need to provide support to carry highways can help establish robust transport out R&D with both public research institutes linkages for the movement of bulk produce. and private logistics companies for the This should be linked with the development development and piloting of alternate new of a fast-track green corridor for perishables, energy efficient technologies for reefers. and linkages established with the Ministry Proven technologies should be scaled up of New and Renewable Energy’s (MNRE’s) through grants and subsidies and service Green Energy Corridor Project. Given policy providers given support to adopt these support, the development of railway links for new technologies. There is also potential perishables faces few challenges, whereas for developing linkages with the Aajeevika establishing road links and sustainable road Grameen Express Yojana that supports the freight can be difficult. This is due to the development of public transport links in fragmented nature of the trucking industry rural areas, 98 supporting movement of both and poor road connectivity, particularly in people and produce. To assess the potential remote areas.102 It is important to carry out of cold chain logistics as a public transport the development of these multimodal links model, it is necessary to carry out feasibility in a holistic manner by first understanding studies. An Uber-like system where mobility needs and identify regions where companies can invest in this idea can also refrigerated rail and highway links will have be explored. If found to be a viable option, 99 the biggest advantages, in terms of both business models for small-scale, public energy efficiency and reducing food loss. transport-based links in remote areas should be developed. 3.4.2 Promote better operations 113. Developing multimodal cold chain and servicing through capacity links can help establish a green corridor building of all stakeholders for perishables. Railways can also be a very and incorporation of effective important element in the development of a monitoring systems sustainable cold chain, not only help speed up logistics connectivity, necessary for 114. Improved operations and servicing perishables, but also cover large distances in the cold chain offers climate benefits in an energy efficient manner. While major through potential reduction in GHG food grains are regularly transported through emissions due to averted food loss and railways, the lack of refrigerated containers improved equipment efficiency. Capacity has meant that perishables are not moved building of farmers and other users in through this mode. 100 The ‘Kisan Rail’ scheme postharvest management and equipment was introduced in the Union Budget 2020- handling is a requisite, offering development 21 to move perishables including fruits, benefits of a trained workforce. Additionally, vegetables, meat, poultry, fishery and dairy improved monitoring at different stages of products from production or surplus regions the cold chain will also help reduce food and to consumption or deficient regions as well pharmaceutical losses. These interventions as for speedy movement to ensure minimum have the potential for attracting concessional damage during transit.101 Multimodal cold finance in the form of grants for capacity 78 Climate Investment Opportunities in India’s Cooling Sector building as well as subsidies and loans of these systems in cold chains. Subsidies for incorporation of monitoring systems. offered by MIDH for inclusion of monitoring These interventions can be implemented controllers that help optimize functioning in partnership with national and state of machinery need to be leveraged for this. governments. Pilot projects can help assess the feasibility of these controllers in the unorganized 115. Monitoring standards and guidelines cold chain in India. These can be carried are needed to bring operational efficiency out through partnerships with technology and quality control in the cold chain. NCCD and logistics service providers along with has developed guidelines for building government agencies responsible for energy efficient cold chains; however, developing the cold chain. To promote the standards and guidelines for effective incorporation of strict monitoring in supply monitoring are lacking in India. Certain chains and adherence to safety standards, food products may become spoiled if they there is a need to develop schemes that reach a certain temperature for even an provide incentives to service providers. hour or two, and India currently does not In the long-term, policy measures for have food safety standards that specify mandatory adherence to safety standards cooling requirements. Additionally, in the for perishables, vaccine and medicine health sector as well, there is a lack of handling and implementation of temperature uniform implementation of standards and monitoring, with checks in place to address accreditations, where the maintenance any faults identified, need to be brought in. and monitoring of temperature-controlled In addition to lack of monitoring, there is also environments can be a challenge.77 minimal understanding of temperature and Those developed by other countries and cooling requirements of different crops in international organizations should inform the Indian conditions. Most studies only look at development of guidelines and standards for benefits and effects of cooling postharvest India. Monitoring is necessary at every stage produce, not specific requirements for to ensure maintenance of temperature and a crop. The biggest fallout of the lack of humidity, as fluctuation in storage conditions this understanding is the build-up of heat can lead to product quality deterioration or (more than 5°C), which promotes growth of spoilage. microorganisms and pathogens, impacting food quality. There is a need for research 116. Use of IoT-based monitoring and on this subject to build an understanding of an understanding of temperature temperature and cooling requirements for requirements of different crops are major perishables and to incorporate these necessary for a robust cold chain network. guidelines in food safety standards. Currently, most cold stores have manual systems that need timely monitoring 117. Capacity building of users at different and skilled labor; they do not allow for levels of the supply chain is an important precautionary measures to avoid accidents. aspect for reducing losses. Food loss can IoT-based technologies play a huge role in be reduced through improved postharvest monitoring of perishables and healthcare management, and vaccine and medical loss products. There is a need to promote uptake through improved handling at the last mile. Climate Investment Opportunities in India’s Cooling Sector 79 ICAP recommends specialized training for and blogs were also adopted to convey cold chain professionals and technicians to information.104 Additionally, the Africa Centre promote proper O&M of technology as well of Excellence for Sustainable Cooling and as energy efficiency, along with training of Cold Chain, established in 2020, aims to farmers on postharvest management of train trainers from across Africa on new produce. NCCD, recognizing that servicing technologies and business models for and maintenance of cold chain was not sustainable cooling, along with capacity being carried out by trained technicians, building of academicians, technicians and began training in 2013 with four programs practitioners by engaging them in R&D which were converted to online courses projects. Both examples can be adapted for during the pandemic.103 The NHB has also India and implemented across the country. developed training courses on post-harvest management. While awareness-building 118. With the incorporation of advanced and outreach by both NHB and NCCD technologies in cold chain, skill levels of are aimed at farmers, training courses are technicians to service newer equipment tailored towards agri-entrepreneurs only. also need to be enhanced. In addition to It is important to develop the capacity of farmers, capacity building should also be individual smallholder farmers and other carried out for operators and technicians in users of the cold chain, particularly in proper both agriculture and healthcare on proper handling and temperature requirements of functioning and maintenance of energy produce as that will help not just reduce efficient and clean energy technologies in food loss but also enhance livelihoods. cold chains and refrigeration systems. In 2018, Such courses and training programs that the government set aside US$5.25 million outline important elements for handling for skill development of 100,000 RAC service of perishables should be developed in technicians under the Pradhan Mantri Kaushal regional languages and can leverage Vikas Yojna (PMKVY), to be implemented by public-private partnerships to extend their the Electronic Sector Skill Council of India reach. The African Affordable Storage and Ozone Cell, MoEFCC.105 It is important to Solutions model consists of awareness, leverage these resources and include them acceptance, accessibility and affordability as in training and skilling of technicians for cold its core principles and has carried out many chain O&M. There is a need to create training outreach methods, including partnering programs along with an academic institute with companies such as Ergos and Tessol and agency such as American/Indian Society to conduct outreach programs such as of Heating, Refrigerating and Air-conditioning exhibitions, demonstrations and roadshows Engineers and an Edtech platform with to showcase solutions. The model also expertise in curating and producing content consists of farm level engagements, where for semi- and un-skilled personnel. These face-to-face interactions help build trust training programs could be along the lines of and create a bank of local knowledge. programs that provide a license to practice Conventional channels of information and service specific grade of cold chain dissemination such as newspaper articles equipment.106 As certification would result in a 80 Climate Investment Opportunities in India’s Cooling Sector premium price attached to these technicians, it all technicians working on cold chain elements is important to also ensure demand for certified should be made mandatory. technicians. This can be achieved through awareness programs on the benefits of hiring Table 3 provides a roadmap for the prioritized certified technicians, along with incentives for opportunities outlined above for the cold chain customers in the early phase of certification. and refrigeration sector. A detailed roadmap To encourage demand, higher costs of trained of these two opportunities, along with those technicians might need to be subsidized in the that were not prioritized, can be found in early stages. In the long term, certification of Annex 3. Table 3: Roadmap for prioritized opportunities for the cold chain and refrigeration sector Climate Investment Opportunities in India’s Cooling Sector 81 82 Climate Investment Opportunities in India’s Cooling Sector DAY-NRLM: Deendayal Antyodaya Yojana – National Rural Livelihoods Mission; DBT: Department of Biotechnology; DFI: Doubling Farmers' Income; DST: Department of Science & Technology; ICAR: Indian Council of Agricultural Research; MoCI: Ministry of Commerce and Industry; MoFPI: Ministry of Food Processing Industries; MoHFW: Ministry of Health and Family Welfare MoRTH: Ministry of Road Transport & Highways; MSDE: Ministry of Skill Development & Entrepreneurship; NHM: National Horticulture Mission; PMFME: PM Formalisation of Micro food processing Enterprises; PM KUSUM: Pradhan Mantri Kisan Urja Suraksha evem Utthan Mahabhiyan Climate Investment Opportunities in India’s Cooling Sector 83 Chapter 4: Passenger Transport Air Conditioning 84 Climate Investment Opportunities in India’s Cooling Sector 4.1 Summary 4.2 Sectoral Overview 4.3 Landscape of Cooling Opportunities in the Sector 4.4 Prioritized Opportunities for Concessional Finance Climate Investment Opportunities in India’s Cooling Sector 85 4.1 Summary better MAC servicing and maintenance practices and recovery at end of life.28 119. Transport air conditioning, also known as Mobile Air Conditioning (MAC), has grown 121. In India, fuel economy ‘mileage’ is the considerably in India. The India automotive most important consideration for consumers HVAC market size was US$822 million in 2018 while purchasing a vehicle. MAC systems and is projected to reach US$2,033 million by have an impact on vehicle mileage as they 2026, registering a Compound Annual Growth are responsible for 15 to 18 percent of energy Rate (CAGR) of 11.6 percent.26 The Indian consumption in passenger vehicles.5 Within passenger car air conditioners market alone is MAC systems, compressors act as the energy forecasted to surpass US$1 billion by 2023.27 guzzlers by consuming about 77 to 89 percent Analysis of the transport sector suggests that of the energy supplied to them.107 Currently, the MAC segment is projected to double in air conditioning is not included while testing terms of energy consumption as well as total vehicles for compliance with Corporate emissions within the next decade. In line with Average Fuel Economy (CAFÉ) in India, this, under a BAU scenario, refrigerant demand and the air conditioner is switched off. The for the MAC segment is expected to increase by incorporation of MAC into vehicle fuel emissions over four times, from an average of 5,172 MT in testing alongside mandatory equipment/ 2017-18 to 22,142 MT in 2037-38.5 In India, the vehicle labelling programs across transport highest energy demand has been projected modes could help create a clear incentive for passenger cars followed by buses and for manufacturers to pursue air conditioning then railways.5 The World Bank study analysis efficiency improvements.108 estimates that, in 2038, the market size and investment potential of passenger transport 122. Further, dedicated domestic R&D is in India could be US$8 billion and providing needed to develop efficient technology sustainable MAC solutions could lead to annual solutions to reduce direct and indirect emissions reduction potential of 14 mtCO2e. emissions associated with the MAC sector, with a special focus on passenger cars, taking 120. A sustainable cooling pathway for India’s transition to e-mobility into consideration passenger transport in India will entail as well. As India is promoting e-mobility promotion of large-scale adoption of efficient (covering both electric and hybrid vehicles) MAC systems and optimization of demand by through its FAME India scheme, the energy shifting to public transport systems and new consumption by batteries for air conditioning vehicle designs which help reduce cooling purposes in e-vehicles should be recognized as load. Improving the efficiency of MAC systems a major issue and potential R&D focus area. Air in passenger transport vehicles can result in an conditioners in e-vehicles can consume up to estimated 20 percent energy savings between 40 percent of battery energy. BAU and improved efficiency scenarios. Further 29 percent carbon savings are possible, mostly 123. Another opportunity in this area is from mitigation of direct emissions through presented by the exploration of measures to 86 Climate Investment Opportunities in India’s Cooling Sector incentivize the commercialization of proven buses, goods vehicles and other vehicles while MAC technologies which are energy efficient. rail transport includes railways and metro rail MAC baseline scenarios show that the current networks. Under the passenger transport air R134a system in India suffers from high system conditioning sector, ICAP focuses on passenger leakage and fuel consumption. With the light duty vehicles (cars, jeeps, taxis for public introduction of enhanced R134a systems, there and private use), passenger heavy duty vehicles has been steady progress in improving the leak (air-conditioned buses) and the railway sector lightness, resulting in a 50 percent reduction (air-conditioned passenger coaches). The in leakage and 40-44 percent lower emissions aviation sector does not use refrigerant gases compared to the non-enhanced systems. for cooling purposes, rather air is used as a However, the associated cost deters automakers refrigerant for air conditioning and refrigeration from upgrading their systems in more price- purposes. The shipping sector has data gaps as sensitive vehicle markets.109 There are efficient information on refrigerant use in the sector is MAC systems that are being developed and not widely available.5 piloted in the country. Measures which can support their scale up would help ensure energy 126. The market size of MAC has been growing efficiency and emission reductions. in the country. MAC has grown considerably in India. Over the last 15 years, an overall growth 124. Therefore, improving the efficiency of of over 12 percent and 2.5 percent CAGR has MAC systems in passenger transport vehicles been observed in the road and rail transport is a key opportunity for concessional financing. sectors, respectively.5 The India automotive Supported with a conducive policy environment, HVAC market size was US$822 million in 2018 this opportunity can unlock private sector and is projected to reach US$2,033 million by investments to shift passenger transportation 2026, registering a CAGR of 11.6 percent.26 The systems towards energy efficiency and low Indian passenger car air conditioners market GHG emissions. This can be achieved by alone is forecasted to surpass US$1 billion building demand for energy-efficient MAC by 2023.27 Analysis of the transport sector systems through S&L programs for vehicles and suggests that the MAC segment is projected to by leveraging R&D to support the improvement double in terms of energy consumption as well of MAC systems. as total emissions within the next decade. ICAP has estimated that MAC is responsible for 15 to 18 percent of energy consumption in passenger 4.2 Sectoral Overview vehicles, thereby projecting the highest energy demand for passenger cars followed by buses 125. Passenger transport air conditioning and then railways (Figure 7).5 In line with this, largely focuses on cars and buses in India. under a BAU scenario, refrigerant demand for Cooling in the passenger transport sector the MAC segment is expected to increase by is majorly covered by road and rail in India. over four times, from an average of 5,172 MT in Road transport comprises passenger cars, 2017-18 to 22,142 MT in 2037-38.5 Climate Investment Opportunities in India’s Cooling Sector 87 Figure 7: Energy demand projection due to MAC in passenger cars, buses and railways under two scenarios (MAC shares being 15 percent and 18 percent of the total energy consumption)5 4.3 Landscape of Cooling This opportunity will therefore lead to direct Opportunities in the Sector climate benefits in the form of GHG emission reductions as well as developmental benefits in 127. Improving the efficiency of MAC systems the form of new jobs for servicing, maintenance in passenger transport vehicles presents and recovery at end of life. The technical a key cooling opportunity which will lead feasibility of this opportunity is high given that to significant energy savings and emission proven efficient MAC systems are available reduction. A sustainable cooling pathway globally and in India. Further the administrative for passenger transport in India will entail feasibility is high as well for this opportunity promotion of a large-scale adoption of efficient given that supportive regulations, i.e., CAFÉ MAC systems and optimization of demand by standards are in place in the country along with shifting to public transport systems and new relevant ongoing programs and schemes such vehicle designs which help reduce cooling as the S&L program, FAME scheme and Mission load. Improving the efficiency of MAC systems Innovation for convergence. The opportunity in passenger transport vehicles (passenger requires a limited number of stakeholders for car, buses and rail) can result in an estimated decision-making, primarily the Ministry of Road 20 percent energy savings between BAU and Transport and Highways (MoRTH), thereby improved efficiency scenarios and a further 29 ensuring a relative ease of implementation. The percent carbon savings are possible, which will likelihood of large-scale adoption of efficient mostly come from mitigation of direct emissions MAC systems would require concerted efforts through better MAC servicing and maintenance on R&D and commercialization which are practices and recovery at end of life (Table 4). 28 supported by a conducive policy environment. 88 Climate Investment Opportunities in India’s Cooling Sector Table 4: Projected results for MAC energy consumption and emissions under BAU and improved scenarios28 128. Building efficient and convenient public can unlock private sector investments to shift transport infrastructure is a key focus area passenger transportation systems towards for the transport sector in India and can help energy efficiency and low GHG emissions. The reduce cooling demand. The modal shift to key interventions to be undertaken within this public transportation systems and towards opportunity are: better designed vehicles which reduce cooling load presents a key opportunity which can • Measures which build demand for energy significantly reduce refrigerant and energy efficient MAC systems such as S&L programs demand. However, given the status of public for vehicles; and transport infrastructure in India, there is a long • R&D to support improvements in energy road ahead for the sector. Building efficient and efficiency of MAC systems while ensuring convenient public transport infrastructure is a cost competitiveness, performance and key focus area for the sector which can help solve durability. the twin problems of pollution and congestion. 110 This transition will require removal of barriers 130. S&L needed to support efficiency and capitalization of sectoral-level opportunities improvements in MAC systems. In India, which are beyond the scope of the sustainable fuel economy ‘mileage’ is the most important cooling agenda alone. consideration for consumers while purchasing a vehicle. MAC systems have an impact on vehicle mileage, and within MAC systems, compressors 4.4 Prioritized Opportunities for act as the energy guzzlers by consuming about 77 to 89 percent of the energy supplied to Concessional Finance them.107 Currently, air conditioning is not included while testing vehicles for compliance with CAFÉ 129. Improving the efficiency of MAC systems in India, and the air conditioner is switched in passenger transport vehicles is the priority off. The incorporation of MAC into vehicle opportunity for this sector given its potential fuel emissions testing alongside mandatory climate and development benefits, high technical equipment/vehicle labelling programs across feasibility, presence of a policy environment transport modes could help create a clear and administrative structure that can ensure incentive for manufacturers to pursue air implementation in the short term. Supported by conditioning efficiency improvements.108 The a conducive policy environment, this opportunity Climate Investment Opportunities in India’s Cooling Sector 89 first-ever fuel efficiency standards for passenger focus area. Air conditioners in e-vehicles can cars in India, termed Corporate Average Fuel consume up to 40 percent of battery energy. Consumption Standards, were implemented in 2017-18 and Stage 2 standards are scheduled 132. Incentivization of proven efficient for implementation in 2022–23. The Fuel MAC technologies can help accelerate their Consumption Standards provide a mandate adoption in the country. Another opportunity to manufacturers to continuously reduce the in this area is presented by the exploration of average fuel consumption of cars sold by them. measures to incentivize the commercialization Moving forward, India should consider the of proven MAC technologies which are energy process of tightening the next round of targets efficient. MAC baseline scenarios show that the under Fuel Consumption Standards for 2026 current R134a system in India suffers from high and 2030. 111 system leakage and fuel consumption. With the introduction of enhanced R134a systems, there 131. R&D to support further improvements in has been steady progress in improving the leak energy efficiency of MAC systems, particularly lightness, resulting in a 50 percent reduction for e-mobility, is needed. ICAP provides an in leakage and 40-44 percent lower emissions overview of the R&D being carried out in the compared to the non-enhanced systems. MAC industry and mentions that the focus has However, the associated cost deters automakers been on improvement of energy efficiency from upgrading their systems in more price- as well as on making the system more cost sensitive vehicle markets.109 There are efficient competitive and durable. This can be augmented MAC systems that are being developed and by improving other components of the vehicle, piloted in the country. Measures which can for instance, the use of reflective windows, support their scale up would help ensure energy thermal insulation, heat load reducing body efficiency and emission reductions. Examples of paint, as well as optimizing power trains. Such such efficient technologies include: measures, in combination with other best-in- class technologies, could help in the reduction • For the passenger car segment: TATA Motors of MAC energy demand by up to 67 percent Limited along with German automotive supplier and halve the energy-related MAC emissions. 112 Mahle and the Institute for Governance & Dedicated domestic R&D is needed to develop Sustainable Development has developed a efficient technology solutions to reduce direct new MAC system known as Secondary Loop and indirect emissions associated with the MAC. It uses the HFC-152a, which has one- MAC sector, with a special focus on passenger 10th the GWP of the common refrigerant, HFC- cars, taking India’s transition to e-mobility into 134a, and is more fuel-efficient as well. The consideration as well. As India is promoting Secondary Loop MAC system was piloted in e-mobility (covering both electric and hybrid a TATA SUV which showed overall vehicle fuel vehicles) through its FAME India scheme, savings of 1.9 to 2.6 percent. This would save the energy consumption by batteries for air 23-31 liters per year for a typical SUV driver in conditioning purposes in e-vehicles should be India with the vehicle being driven 15,000 km recognized as a major issue and potential R&D per year;113 and 90 Climate Investment Opportunities in India’s Cooling Sector • For metro rail: Danfoss’ Variable Frequency Variable Frequency Drives has contributed to Drives have been installed at the air handling 15-25 percent energy savings across various units and track way exhaust fans at Delhi Metro applications.114 which have helped achieve energy efficiency of up to 20 percent. This has resulted in an Table 5 provides a roadmap for the above estimated cost savings of over INR 400,000 mentioned prioritized opportunity in the (over US$5,000) per annum per Metro station. passenger transport air conditioning sector. Similarly, in Kolkata Metro Rail Corporation and More details on the opportunity and its proposed Chennai Metro Rail, installation of Danfoss interventions can be found in Annex 4. Table 5: Roadmap for prioritized opportunities in passenger transport air conditioning sector Climate Investment Opportunities in India’s Cooling Sector 91 Chapter 5: Refrigerants 92 Climate Investment Opportunities in India’s Cooling Sector 5.1 Summary 5.2 Sectoral Overview 5.3 Landscape of Cooling Opportunities in the Sector 5.3.1 Support HFC phase down through roadmaps, policies and public procurement 5.3.2 Promote domestic R&D and indigenous production of low GWP refrigerants 5.3.3 Improve servicing, maintenance and disposal to reduce refrigerant demand 5.4 Prioritized Opportunities for Concessional Finance Climate Investment Opportunities in India’s Cooling Sector 93 5.1 Summary 19, R-32 and R-410 (with GWP 1,924) RACs had a market share of 80 percent in India, while R-290 133. In India, refrigerant demand is expected to (with GWP 3), an HFC alternative, had only a 2 grow more than six times under a BAU scenario, percent market share.63 from 22,522 MT in 2017-18 to 1,49,392 MT in 2037-38.5 The demand for refrigerant-based 135. Annual refrigerant demand in India could vapor compression technologies to meet be reduced by 31 percent from a BAU scenario cooling requirements of buildings will primarily by 2038 with key interventions such as drive the projected refrigerant demand. After refrigerant transitions away from HCFC-22 and successfully implementing the first phase of R-410A to low-GWP refrigerants, reduced tube the Hydrochlorofluorocarbons (HCFC) Phase- diameter in heat exchangers from 7 millimeter out Management Plan under the Montreal (mm) to 5 mm, large-scale introduction of micro Protocol on Substances that Deplete the Ozone channel heat exchangers (resulting in significant Layer, India is now implementing its Stage reduction in refrigerant charge per unit), and II. Under this, HCFCs with Ozone Depletion use of good servicing practices.116 The largest Potential will be phased out in India by 2030. estimated reduction potential for refrigerant India recently approved the ratification of the demand is shown by the space cooling in the Kigali Amendment to the Montreal Protocol, buildings sector, with a 33 percent reduction over and now the focus will shift to phase-down of BAU scenario. The cold chain and refrigeration Hydrofluorocarbons (HFCs). The baseline years sector can also contribute to a reduction in for this have been set as 2024-25-26, and India refrigerant demand, with a 11 percent potential will phase down HFCs in four steps starting in reduction over BAU scenario.5 2032, with a cumulative reduction of 10 percent in 2032, 20 percent in 2037, 30 percent in 136. Achievement of India’s HFC phase down 2042 and 85 percent in 2047. India has also strategy requires robust and practicable committed to freezing its HFC production and sector-wise action plans, technology roadmaps consumption in 2028.115 and a conducive policy environment. To this end, India plans to develop a ‘National strategy 134. The analysis in this study showed that for phase down of HFCs as per the applicable an effective phase down of HFC across India phase down schedule for India’ based on requires a two-pronged approach of ensuring consultations with all industry stakeholders reliable supply of low/zero GWP refrigerants by 2023. Further, the country can benefit and efficient refrigerant demand management. from domestic innovation and production of Several alternatives to HFCs are in use across alternative low-GWP refrigerants that are cost- the world, but these are not used at large scale effective and best suited to Indian climatic in India, apart from the RAC industry that has conditions. The ammonia refrigeration industry adopted the latest technologies. The RAC sector alone is estimated to be worth around US$200 in India is phasing out HCFC-22 (with GWP 1,760) million, with an average growth rate estimated by deploying the comparatively lower-GWP R-32 to be 10 percent.117 India’s collaborative R&D (with GWP 677), however there is potential for program for low-GWP refrigerants should be adopting even lower GWP refrigerants. In 2018- supported by necessary policy frameworks 94 Climate Investment Opportunities in India’s Cooling Sector and reliable supply chain development of the manufacturing sector (1 January 2020) by identified affordable alternative refrigerants and deploying low-GWP refrigerants without moving compatible equipment. to HFCs, as has been done in the USA and several other developed countries. With the 137. Effective servicing and maintenance will recent government approval for the ratification be critical in reducing refrigerant leakage, of Kigali Amendment to the Montreal Protocol, minimizing indirect emissions from energy the focus now will shift to phase-down of HFCs. inefficient equipment and creating significant India has committed to freeze its HFC production employment opportunities. The servicing and consumption in 2028. With 2024-2025- sector consumes more than 40 percent of the 2026 as the baseline years, India will complete total refrigerant currently used in the country.5 its phase down of HFCs in four steps from 2032 ICAP recognizes that with the growth in cooling onwards with cumulative reduction of 10 percent demand, there will be increased demand for in 2032, 20 percent in 2037, 30 percent in 2042 servicing. Therefore, this study concludes that and 85 percent in 2047.115 in the refrigerants sector, the key opportunity for concessional financing is in improving 139. Annual refrigerant demand is expected to servicing, maintenance and disposal to reduce grow more than six times over two decades. refrigerant demand across India. This can be In 2015, the air-conditioning sector had the achieved by ensuring a minimum threshold for largest market share of all sectors, estimated training, certifications for service technicians at 62 percent of refrigerant consumption in and appropriate policy mandates that help India.118 With respect to HFC consumption, the formalize the service sector in India. India also commercial refrigeration sector was the highest needs to develop a conducive policy framework at 22 million TR, followed by MAC at 20 million and infrastructure for recovery, recycling and TR. Under the BAU scenario, annual refrigerant reclamation at disposal. demand for cooling across all sectors in India is expected to grow more than six times from 22,522 MT in 2017-18 to 1,49,392 MT in 2037- 5.2 Sectoral Overview 38.5 Figure 8 presents the sector-wise growth in refrigerant demand between 2017-18 and 2037- 138. India will be phasing down HFC 38 as shown in ICAP. The demand for refrigerant- production and consumption as per the Kigali based vapor compression technologies to meet Amendment to the Montreal Protocol. India cooling requirements of buildings will primarily is currently implementing Stage II of HCFC drive the projected refrigerant demand. Phase-out Management Plan after successful implementation of its first phase under the Montreal Protocol on Substances that Deplete 5.3 Landscape of Cooling the Ozone Layer. Under this, the phase out of HCFCs that have Ozone Depletion Potential Opportunities in the Sector in India will be completed by 2030. India is 140. Effective HFC phase down requires a two- the first Article 5 country to completely phase pronged approach of ensuring reliable low/ out consumption of HCFC-141b in the foam Climate Investment Opportunities in India’s Cooling Sector 95 Figure 8: Annual refrigerant demand under the BAU scenario5 zero GWP refrigerants supply and efficient key opportunities as presented in the sectoral refrigerant demand management. While pathways for impact in Chapter 1 include: several alternatives to HFCs exist and are used 1. Support HFC phase down through across the world, including in India, these are roadmaps, policies and public yet to be put into large-scale commercial use procurement to enable deployment of in the country with an intention of replacing low-GWP refrigerants and technologies HFCs. However, particularly the RAC industry with lower refrigerant demand; in India has been quite ahead in adoption of 2. Promote domestic R&D and indigenous the latest technologies. India is phasing out production of low-GWP refrigerants; and HCFC-22 (with GWP 1,760) in the RAC sector 3. Improve servicing, maintenance and by deploying the comparatively lower-GWP disposal to reduce refrigerant demand. R-32 (with GWP 677), while several developed countries go with high-GWP R-410A. In 2018- 19, R-32 (with GWP 677) and R-410 (with GWP 5.3.1 Support HFC phase down 1,924) RACs had a market share of 80 percent through roadmaps, policies and in 2018-19 in India while R-290 (with GWP 3), an public procurement HFC alternative, had 2 percent market share in the same year. An effective phase down of 63 141. Studies have estimated that the HFC would require a two-pronged approach of annual refrigerant demand in India could ensuring reliable supply of alternative low/zero be reduced by 31 percent from the BAU GWP refrigerants and managing the demand for scenario in 2038. This reduction has been refrigerants across all sectors. To this end, the estimated based on key interventions such 96 Climate Investment Opportunities in India’s Cooling Sector as refrigerant transitions away from HCFC- inform the prioritization exercise required for 22 and R-410A to low-GWP refrigerants, phasing down HFCs, including assessment reduced tube diameter in heat exchangers of the economic importance of the sector and from 7 mm to 5 mm, large-scale introduction market trends. In India, information relevant of micro channel heat exchangers (resulting to the development, testing and approval of in significant reduction in refrigerant new refrigerants is often scattered among charge per unit), and use of good servicing various industry entities that each conduct practices.116 Amongst sectors, the space their own investigations. A single repository cooling in buildings sector shows the largest or system which can consolidate knowledge estimated reduction potential in refrigerant on various alternative refrigerants in terms demand in 2037-38 of 38,500 MT, which of their application, safety standards, is a 33 percent reduction over the BAU performance, availability and affordability scenario, and the cold chain & refrigeration could be beneficial in guiding industry sector which shows an estimated reduction transitions. Finally, public procurement in potential in refrigerant demand of 1,100 MT India is estimated to be 15-20 percent of in 2037-38, a 11 percent reduction over the its GDP120 and can provide direction and BAU scenario.5 help influence consumers and market behavior towards the adoption of low-GWP 142. Achievement of India’s HFC refrigerant-based and energy efficient phasedown strategy requires robust and technologies. India will be making concerted practicable sector-wise action plans, efforts in implementing this opportunity technology roadmaps and a conducive given the country’s commitment to the Kigali policy environment. India plans to develop Amendment of the Montreal Protocol. The a ‘National strategy for phase down of targeted HFC phase down will lead to direct HFCs as per the applicable phase down and indirect climate benefits such as reduced schedule for India’ based on consultations GHG emissions from HFCs and green jobs with all industry stakeholders by 2023. The which promote low-GWP refrigerant-based Executive Committee of the Multilateral equipment across all cooling sectors. Fund for the Implementation of the Montreal Protocol has highlighted the need for HFC phase-down plans known as Kigali HFC 5.3.2 Promote domestic R&D and implementation plans (KIPs). 119 Effective indigenous production of low- implementation of the national strategy for GWP refrigerants HFC phase down or India’s KIP will require sector-wise action plans which provide 143. India can benefit from domestic technology roadmaps combined with innovation and production of alternative modeling phase down requirements. This low-GWP refrigerants that are cost- would help India identify the availability of effective and best suited to Indian climatic viable technologies for each sector and conditions. Currently, most of the low Climate Investment Opportunities in India’s Cooling Sector 97 GWP alternative refrigerants are heavily driver for domestic R&D pertains to the patented and costlier than the existing aspect of Intellectual Property Rights. The refrigerants in use. ICAP highlights the need ICAP notes that low-GWP alternatives for sustained R&D efforts in both public and are heavily patented by multinational private sector to reduce India’s reliance companies. Particularly those pertaining on imported refrigerant-based equipment to Hydrofluoroolefins (HFOs) are a key and parts. This also requires a greater challenge for HFC phase down. HFO-1234yf push for a domestic manufacturing base is a substitute for HFC-134a (GWP 1,430) that that can produce refrigerants, equipment is widely used in commercial refrigeration and components specifically for the Indian and MAC currently. HFO patents can be market. The ammonia refrigeration industry classified under two major categories alone is estimated to be worth around of production process patentsxxi and US$200 million, with an average growth application patents. xxii Application patents rate estimated to be 10 percent. 117 can be a barrier in early adoption of lower- GWP technologies. The Montreal Protocol’s 144. India’s collaborative R&D program Multilateral Fund,xxiii to some extent, has for low-GWP refrigerants should be compensated for the cost of licenses and supported by necessary policy frameworks access to patented technologies. However, and reliable supply chain development further evaluation is needed to assess if a of the identified affordable alternative licensing arrangement supported by the refrigerants and compatible equipment. Multilateral Fund can be used as a way to The lack of industry awareness, particularly address the application patent barrier123 in smaller enterprises, on the viability and that exists today. A World Bank study notes availability of alternatives to high-GWP that a significant share of HFO process and HFCs can be a key barrier to investments. 121 application patents will become off-patent The need for a government-initiated R&D (available to the public) by 2025.124 An Indian program to identify, measure and test refrigerant manufacturer has developed alternatives could greatly contribute to filling a process to produce lower-GWP HFC-32 this information gap. As a first step, MoEFCC refrigerant and there is already production launched a collaborative R&D program to of this refrigerant not only to meet the develop cost-effective low-GWP sustainable domestic market but also cater to the needs refrigerant technologies as an alternative to of other countries. Also, in the case of low- HFCs in 2016. 122 This R&D initiative brings GWP HFO, while there are a large number of together government, research institutes, production process patents filed, chemical industry and civil society. Another key producers in China and India have invented i xxi Production process patents cover a specific process or use of raw materials and/or other inputs to manufacture the products. xxii Application patents covering new product design to work with the substances or use of the substances in a particular equipment type. xxiii The Multilateral Fund for the Implementation of the Montreal Protocol, in operation since 1991, aims to assist developing country parties to the Montreal Protocol whose annual level of consumption of the ozone depleting substances chlorofluorocarbons and halons is less than 0.3 kilograms per capita to comply with the control measures of the Protocol. Currently, 147 of the 197 Parties to the Montreal Protocol meet these criteria and are referred to as Article 5 countries. As at December 2021, the contributions received by the Multilateral Fund from developed countries, or non-Article 5 countries, totaled over US$4.37 billion. The Fund has also received additional voluntary contributions amounting to US$25.5 million from a group of donor countries to finance fast-start activities for the implementation of the HFC phase down. To facilitate phase-out by Article 5 countries, the Executive Committee has approved 144 country programs, 144 HCFC phase-out management plans and has funded the establishment and operating costs of ozone offices in 145 Article 5 countries. 98 Climate Investment Opportunities in India’s Cooling Sector new production processes that were not energy inefficient equipment and creating covered by these patents. 124 This Indian significant employment opportunities. producer is awaiting the expiration of the The servicing sector consumes more than application patent for commercial production 40 percent of the total refrigerant currently which will happen in 2024. Finally, reliable used in the country.5 ICAP recognizes that, supply of affordable alternative refrigerants with the growth in cooling demand, there can act as a barrier to adoption by industry. will be increased demand for servicing. In the past, the refrigerant transition in India Servicing can help reduce direct carbon had caused a dramatic rise in prices and emissions from refrigerants by: an accompanying shortage in refrigerants • Ensuring operational efficiency through in smaller cities and towns. This further proper installation and maintenance led to unorganized black markets selling of refrigerant-based equipment across refrigerants, many of them uncertified cooling sectors; and blends, at an even higher price. 121 A strong • Carrying out proper end-of-life recovery domestic manufacturing base for refrigerant (for recycling and reuse) and disposal of production could help address this barrier refrigerants across cooling sectors. in India’s HFC phase down pathway. In addition to this, a shift towards new low- India is estimated to have more than GWP refrigerants will require the availability 200,000 RAC service technicians, most of of the requisite infrastructure to ensure them being in the informal sector.115 Servicing their adoption, including the availability of of low-GWP refrigerant air conditioning compatible equipment, adequate supply of units is expected to see a 10-fold increase the refrigerants to ensure low downtime of in jobs over the next two decades from equipment, and so on. This opportunity of a base of 0.2 million technicians in 2017 domestic R&D and indigenous production of to 2 million.15 Similarly other refrigeration low-GWP refrigerants will require significant and air conditioning sectors will also have efforts to implement and scale up, thereby requirements of skilled service technicians. offering limited direct and indirect climate benefits. 146. Quality and safety of servicing practices need to be ensured through minimum threshold for training, certifications for 5.3.3 Improve servicing, service technicians and appropriate policy maintenance and disposal to mandates that help formalize the service reduce refrigerant demand sector in India. A sustainable cooling pathway for India will require quality and 145. Effective servicing and maintenance safety of servicing practices to remain will be critical in reducing refrigerant intact by ensuring a minimum threshold leakage, minimizing indirect emissions from for training through updated and well- Climate Investment Opportunities in India’s Cooling Sector 99 designed curricula and, more importantly, 5.4 Prioritized Opportunities certifications for service technicians. Several for Concessional Finance countries prohibit non-licensed or non- certified service technicians from installing, 147. Improving servicing, maintenance and servicing, or repairing refrigeration and disposal to reduce refrigerant demand is the air-conditioning equipment, or handling priority opportunity for this sector given that it refrigerants. These measures also allow for will result in significant climate and development social welfare and security systems to be benefits. It is implementable and has high need put in place for service technicians through and potential for leveraging concessional targeted insurance and repeated training finance and private sector investment towards sessions. India will need to move towards the creation of skilled service technicians and such a model of formalization of the service required infrastructure. The key interventions to sector to create an ecosystem in which be undertaken under this opportunity are: several refrigerant gases can exist in the • Creation and uptake of trained service Indian market.121 This process will need to be technicians to ensure proper servicing complemented by policy instruments such and maintenance of refrigerant-based as mandating leak tests (in large and mobile equipment to reduce refrigerant leakage; applications, especially) and establishing and standardized professional servicing • Measures to support recovery, recycling and practices. Good policy-directed practices reclamation of refrigerants. which have been introduced in India, such as the banning of disposable cylinders, also 148. A well-designed program to support need to be implemented effectively.121 This skilling of technicians along with measures to opportunity will result in significant climate ensure their employment will help mainstream mitigation and development benefits while proper servicing and maintenance of also presenting a high potential for scaling refrigerant-based equipment. This would up. India has relevant policies and ongoing include training and certification programs for programs which ensure administrative service technicians on Good Service Practices feasibility of this opportunity. Particularly the (GSP) across sectors to better manage and Ozone Cell at the MoEFCC in partnership reduce refrigerant losses during recharge and with the Electronic Sector Skill Council of end-of-life. Amongst sectors, priority should be India is implementing a project for upskilling given to the RAC sector which has tremendous and certifying 100,000 RAC service market share and growth potential. MoEFCC technicians under the Skill India Mission- recently released the book on ‘Good Servicing PMKVY of the Ministry of Skill Development Practices for Energy Efficient Operations of & Entrepreneurship (MSDE).115 Room Air Conditioners’ which should be taken forward through a dedicated training program. Further, state-level engagement to understand the status and need of trained service 100 Climate Investment Opportunities in India’s Cooling Sector technicians as well as availability and quality of regulatory framework is driving the recovery training institutions would be critical to ensure of refrigerants. The analysis of regulations effective implementation across the country. in the U.S., UK, Germany and Singapore to To this end, it is important to engage industry understand how recovery and disposal of to participate in training delivery and commit refrigerants is managed (US EPA, 2011,2020; GIZ to employing trained candidates to facilitate GmbH,2015; NEA 2020; IOR UK,2018) showed large-scale adoption of this intervention. The that refrigerants are either recovered on-site training programs should be complemented by a qualified technician or the final person in with a central voluntary certification scheme the disposal chain such as e-waste recyclers. through a single government entity under a India does not have any mandate in place to single framework. Finally, customer awareness recover, reclaim or destroy refrigerant gases programs which help create demand for certified effectively.121 Even where disposal facilities exist technicians across sectors will be beneficial in for gases, the recovery and transportation costs the long run. are high and act as a huge disincentive.121 For India to meet its HFC phase down targets, end- 149. India needs to develop a conducive policy of-life disposal of refrigerants is important, as framework and infrastructure for recovery, is reducing emissions during the operational recycling and reclamation at disposal. ICAP life cycle. Given the lack of infrastructure, identifies recovery, recycling, and reclamation policy and business action in India on this front, at disposal as a weak link in the judicious use there is a need to identify and understand of currently employed high-GWP refrigerants. different business cases for effective policy There are significant refrigerant leaks in implementation to minimize operational and residential and commercial air conditioners, end-of-life emissions.121 A key intervention for and in MAC used in cars. Recovery, recycling end-of-life recovery in the case of RACs is that and reclamation are expensive processes and these are covered under the Extended Producer the servicing industry in India is not aligned Responsibility (EPR) and e-waste guidelines for toward affordable and requisite skills needed reclaiming electronic components at end of life. for these. Moreover, there is lack of credible This provides a possible opportunity to embed data on the refilling requirements of refrigerants refrigerant disposal guidelines within existing due to leakage in the Indian context. Refrigerant regulatory mechanisms of end-of-life disposal recovery systems are readily available, of RACs. Both EPR and e-waste rules are yet including in India. Recovery of refrigerant, to be implemented and are likely in the early especially from systems with relatively large stages of the implementation process. Currently quantities, has become a conventional part in central air conditioners are not included in the servicing practices in most countries, the main E-waste Policy. EPR specifies the responsibility incentive being the cost of refrigerants, besides of the manufacturer/producer to make sure that environmental protection. In non-A5 countries the product at the end of its life is collected and (developed countries that have ratified the either recycled, reused, or disposed in a climate protocol) under the Montreal Protocol, the responsible way. Climate Investment Opportunities in India’s Cooling Sector 101 Table 6 provides a roadmap for the prioritized opportunities in the refrigerants sector. More details on the opportunities and their proposed interventions can be found in Annex 5. Table 6: Roadmap for prioritized opportunities in refrigerants sector GeM: Government eMarketplace; MoHUA: Ministry of Housing and Urban Affairs 102 Climate Investment Opportunities in India’s Cooling Sector Chapter 6: Conclusion and Way Forward Climate Investment Opportunities in India’s Cooling Sector 103 150. India is experiencing severe heat waves increasing from 8 percent (2018) to 40 percent with higher temperatures arriving earlier in the (2038), and 50 percent of commercial buildings summer season and for longer durations. While becoming air conditioned. It will be important April 2022 saw temperatures in the capital, New to integrate passive cooling measures in these Delhi, reaching above 46 C, the month of March o buildings to not just improve thermal comfort was the hottest ever recorded. The majority of but also achieve 20 percent energy savings by poor and marginalized communities across India 2037-38. Another avenue for energy savings without proper access to cooling are extremely is improved efficiency of cooling technologies vulnerable to this heat. This rising heat can through implementing stringent standards and also jeopardize economic productivity as up supporting domestic manufacturing. This will to 75 percent of India’s workforce depends on help reduce costs and promote their uptake. heat-exposed labor. One of the consequences 1 Social housing offers a huge opportunity of this rise in temperatures will be an increase for both integrating passive measures and in demand for cooling. India’s long-term food promoting the use of high efficiency appliances, and health security also depends on a reliable and developing linkages with the PMAY cold chain as transport of fresh produce scheme offers an opportunity to influence the and pharmaceuticals needs an end-to-end rural and urban social housing sectors. It is refrigerated system. Recognizing the risks of also necessary to reduce demand, along with extreme heat, in 2019 the Government of India shifting it to low carbon cooling technologies launched the ICAP to provide sustainable cooling service delivery models. District cooling offers and thermal comfort for all. This current study such an opportunity that can not only increase presents an overview of the opportunity in each efficiency, but also reduce refrigerant and peak of the cooling sectors, along with actionable power demand. Demand for cooling, along with roadmaps comprising policy, investment, and a reduction in urban temperatures can also knowledge interventions to help achieve ICAP be achieved by incorporating NbS in urban goals through short-, medium- and long-term planning. actions. The sustainable cooling opportunities have also been prioritized for concessional 152. Growth of the cold chain and refrigeration financing and private sector investments, and is projected to double cooling and refrigerant eight key clustered opportunities have been demands, and triple the energy consumption identified as being key to advancing ICAP goals. for the sector by 2027.5 To be able to implement energy efficiency measures and reduce the 151. In the space cooling sector, the demand projected cooling, refrigerant and energy for cooling in buildings is likely to increase demands, it is important to first understand cold by 11x (in TR) by 2037-38, mainly due to the chain infrastructure needs across the country, projected increase of two-and-a-half to three along with getting accurate data on food and times in commercial and residential floor pharmaceutical losses. As technologies for area. The majority of this projected space bringing in energy efficiency and renewable cooling demand (52 percent) will be due to an energy into the cold chain already exist, there increase in household air conditioner ownership is a need to now strengthen existing policies 104 Climate Investment Opportunities in India’s Cooling Sector to promote their adoption, and explore servicing and maintenance practices, along with innovative business models that support recovery at end of life can result in 29 percent different stakeholders at a decentralized level. GHG emissions reduction. This can be achieved Refrigerated transport also needs directed by supporting R&D in energy efficiency of MAC policy support to promote uptake of alternate systems and building demand for these by clean cooling technologies in reefers, and for developing and implementing a S&L program the development of multimodal cold chain for vehicles. A key means of reducing demand links through rail and highways. One of the for transport air conditions is implementing key req uirements of the sector, providing both behavior change programs that help shift load climate and developmental benefits, is capacity towards public transportation systems. building of key stakeholders such as operators and technicians on proper functioning and 154. Given the growth of each of the cooling maintenance of energy efficient technologies sectors discussed, annual refrigerant demand and farmers on better management of produce. for cooling across sectors is expected to grow As refrigerator ownership is projected to grow by more than six times by 2038 compared to from 0.18 per household in 2012 to 0.64 in 2018.5 In view of India’s approval for ratification 2030, the retailer and consumer end of the of the Kigali Amendment of the Montreal chain also needs support with implementation Protocol, effective phase down of HFCs is of energy efficiency measures. This offers needed. This requires a two-pronged approach the second largest opportunity (after space that ensures reliable supply of low/zero GWP cooling) in terms of growth in cooling demand refrigerants and management of demand for and energy consumption. In this sector as refrigerants across sectors. India has been ahead well, implementing stringent standards and in phasing out HCFC-22 in the RAC sector by supporting domestic manufacturing can help deploying the lower-GWP R-32 and introducing reduce costs of high efficiency domestic and R-290 (with a very low GWP of 3) based RACs commercial refrigeration systems, increasing in the market, and this experience will be highly their uptake. beneficial during phase out of HFCs. The RAC industry’s example can be followed for phasing 153. Vehicle population in India is projected out HFCs by promoting domestic supply of low- to grow more than five times for cars and GWP refrigerants. This will require provision more than twice for buses over the next of support to R&D and domestic production two decades. As MAC is responsible for 15-18 of such refrigerants. There is also potential percent of energy consumption in passenger for reducing demand by bringing in GSP and cars and buses, refrigerant demand is expected maintenance of refrigerant-based equipment to to increase by over four times in this period. reduce refrigerant leakage, along with recovery, This sector is also projected to double its recycling and reclamation of refrigerants. energy consumption as well as total emissions between 2017 to 2027. Improving the efficiency 155. Multistakeholder engagement and of MAC systems and fuel use can help achieve capacity building will help enable adoption of 20 percent energy savings, and better MAC new business models and sustainable cooling Climate Investment Opportunities in India’s Cooling Sector 105 technologies across sectors. The private for concessional financing in this area. These sector will need to play a key role in mobilizing opportunities will need to be studied in greater investments toward sustainable cooling. To detail through deep-dive assessments to unlock this end, India will need to adopt a systematic their potential for meeting India’s cooling needs approach for engaging industry and other in a sustainable manner. This should include relevant stakeholders in piloting and scaling detailed financing plans for these opportunities, up successful business models and sustainable which cover their cost-benefit analyses and cooling technologies across sectors. There are probable financing sources beyond MDBs. several global success stories of platforms and frameworks that have accelerated the uptake 157. Innovative financing models can support of sustainable cooling solutions, which can scale up measures for ensuring Thermal be adapted for India. For instance, the Africa Comfort for All in India. India’s transition to LED Centre of Excellence for Sustainable Cooling lightbulbs is a successful example of uptake of and Cold Chain discussed in Chapter 3 – energy efficient technology at scale that can be that deploys ‘Living Laboratories’ in strategic replicated for the cooling sector. Government of locations in rural areas to conduct research and India’s bulk procurement and distribution of LED offers technical assistance, demonstrations and bulbs through EESLs UJALA program has led to knowledge transfer to rural communities – can an estimated annual energy savings of about be an excellent means for building capacities 48 billion kWh and estimated GHG emission and scientific knowledge and developing the reduction of 39 million metric ton of CO2 per necessary infrastructure for a decentralized year.29 Similar opportunities can be explored for sustainable agriculture cold chain in India. On scaling up adoption of higher efficiency fans and the end-user side, effective communications refrigerators as well. However, for a higher value campaigns that are informed by robust data and product such as refrigerators, it will be important analytics across cooling sectors will be essential, to first address challenges of high costs, the and a key step for reducing and shifting demand. need for installation and maintenance, and end of life disposal, before such a bulk procurement 156. Concessional financing can play a key role program can be developed. Funds can also be for sustainable cooling in India. Concessional raised for sustainable cooling through Cooling finance by multilaterals such as The World Bank Bonds along the lines of the recently issued will need to play a key role in helping India Rhino Bond by The World Bank. This bond – develop financial instruments and innovative Wildlife Conservation Bond – was rolled out models that accelerate the adoption of in South Africa for protecting the endangered sustainable cooling measures. This will ensure black Rhinos and closing the biodiversity that sustainable cooling solutions are accessible funding gap in the country. The first of a kind and affordable for consumers and help build US$150 million five-year bond offers investors demand for these. Therefore, these innovative a return on their investments if the black Rhino financial instruments will be crucial to develop population rises in two protected areas. This and transform the cooling market in India. The bond also includes a potential performance study identifies eight prioritized opportunities related payment from the Global Environment 106 Climate Investment Opportunities in India’s Cooling Sector Facility (GEF).125 Similar bonds can be explored budgetary allocations and financial flows. for the cooling sectors as well, where investors This could also help provide the institutional get a return on their investment based on the framework for continuous monitoring and energy savings and GHG emission reduction, evaluation of ICAP implementation to inform along with reduction for cooling and refrigerant planning across sectors. Building a conducive demands. Another opportunity that can help policy environment will help spur action and raise finance for energy efficiency interventions investments by the private sector as well in the sector is through the carbon market which towards sustainable cooling. Under this mission, can provide funding based on the potential The World Bank and Government of India avoided GHG emissions and energy savings due partnership on sustainable cooling on the eight to the interventions. Currently in the agriculture prioritized opportunities identified in this study sector, carbon credits can be earned from a could be developed to: range of activities such as agroforestry, biogas production, and low tillage farming, all of which (i) deploy ‘living laboratories’ to pilot reduce CO2 emissions. Similarly, the potential multistakeholder engagement and new of earning carbon credits for activities carried technologies; out to develop and implement a sustainable (ii) enable market transformation for high cold chain can be explored. This can help impact space cooling technologies; raise additional funding for farmer groups to (iii) support development of sustainable implement decentralized solutions. and energy efficient cold chains; and, (iv) promote better operations and 158. Launch “Sustainable Cooling and Thermal servicing through capacity building Comfort for All” as a national mission. ICAP of stakeholders, and incorporation of provides the guiding framework for building the effective monitoring systems. cooling infrastructure in a sustainable, climate- friendly manner in India. To achieve ICAP’s objectives, there is a need to enable resource flow from both public and private sectors as well as promote convergence across central, state, and local levels. This could possibly be achieved through a mission mode by establishing “Sustainable Cooling and Thermal Comfort for All” as one of the government’s flagship missions. India has experience in achieving such decentralized objectives through missions such as Smart Cities Mission, Swachh Bharat and Jal Jeevan Mission, amongst others. Similarly, the objective of providing sustainable cooling and thermal comfort for all can be pursued through a mission mode as well as by streamlining Climate Investment Opportunities in India’s Cooling Sector 107 References 1 McKinsey. (2020). Climate risk and response: to 2019: a three-stage modelling study. The Physical hazards and socioeconomic impacts. Lancet Planetary Health, 5(7), E415-E425. Will India get too hot to work? McKinsey Global 7 ILO. (2019). Working on a warmer planet: The Institute. impact of heat stress on labour productivity and decent work. International Labour Office (ILO). 2 IPCC, 2021: Climate Change 2021: The Physical Science Basis. Contribution of Working 8 Parsons, L. A., Shindell, D., Tigchelaar, M., Group I to the Sixth Assessment Report of the Zhang, Y., & Spector, J. T. (2021). Increased labor Intergovernmental Panel on Climate Change losses and decreased adaptation potential in [Masson-Delmotte, V., P. Zhai, A. Pirani, S.L. a warmer world. Nature Communications, 12, Connors, C. Péan, S. Berger, N. Caud, Y. Chen, 7286. L. Goldfarb, M.I. Gomis, M. Huang, K. Leitzell, E. Lonnoy, J.B.R. Matthews, T.K. Maycock, T. 9 Dearman. (2015). Cold chains and the Waterfield, O. Yelekçi, R. Yu, and B. Zhou (eds.)]. demographic dividend. Dearman. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, 2391 pp. IEA (2022), Space Cooling, IEA, Paris https:// 10 www.iea.org/reports/space-cooling, License: 3 Spano D., Armiento M., Aslam M.F., Bacciu V., CC BY 4.0 Bigano A., Bosello F., Breil M., Buonocore M., Butenschön M., Cadau M., Cogo E., Colelli F. P., PIB. (2019, March 8). India Cooling Action Plan 11 Costa Saura J.M., Dasgupta S., De Cian E., Launched: Press Release by Ministry of Debolini M., Didevarasl A., Ellena M., Galluccio Environment, Forest and Climate Change. G., Harris R., Johnson K., Libert A., Lo Cascio M., Retrieved from Press Information Bureau, Lovato T., Marras S., Masina S., Mercogliano P., Government of India: https://pib.gov.in/ Mereu V., Mysiak J., Noce S., Papa C., Phelan PressReleaseIframePage.aspx?PRID=1568328 A.S., Pregagnoli C., Reder A., Ribotta C., Sano M., Santini A., Santini M., Sartori N., Sini E., Sirca 12 Mishra, N. (2021, December 23). India Must C., Tharmananthan R., Torresan S., Trabucco A., Build 10 Million Houses A Year. Retrieved from “G20 Climate Risk Atlas. Impacts, policy and rediff.com:https://www.rediff.com/business/ economics in the G20”, 2021, DOI: 10.25424/ column/neelkanth-mishra-india-must-build-10- cmcc/g20_climaterisk millionhouses-a-year/20211223.htm 4 Singh, C. (2022, May 22). Spring Never Came 13 IEA. (2018, May). The Future of Cooling: to India This Year. The New York Times. Opportunities for energy-efficient air conditioning. Retrieved from International 5 MoEFCC ICAP. (2019). India Cooling Action Energy Agency (IEA): https://www.iea.org/ Plan. New Delhi: Ministry of Environment, Forest reports/the-future-of-cooling and Climate Change (MoEFCC), Government of India. 14 IFC. (2017). Climate Investment Opportunities 6 Zhao, Q., Guo, Y., Ye, T., Gasparrini, A., Tong, in South Asia: An IFC Analysis. International S., & Overcenco, A. (2021, July). Global, regional, Finance Corporation. and national burden of mortality associated with non-optimal ambient temperatures from 2000 15 CEEW-NIPFP. (2020). Jobs, Growth and 108 Climate Investment Opportunities in India’s Cooling Sector Sustainability: A New Social Contract for India’s ASSOCHAM.. Recovery. 24 NCCD. (2016). Strategy Document: discussion 16 PIB. (2020). Cabinet approves PLI Scheme on Cold-chain Development. New Delhi: to 10 key Sectors for Enhancing - India’s National Center for Cold Chain Development. Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat. Retrieved March 8, 25 EESL. (n.d). India’s UJALLA Story. Energy 2021, from Press Information Bureau: https://pib. Efficiency Services Limited. gov.in/PressReleasePage.aspx?PRID=1671912 26 Allied Market Research. (2019, September). 17 EESL, UNEP, PwC. (2021). District Energy Allied Market Research. Retrieved from India in Cities Initiative: National District Cooling Automotive HVAC Market by Technology Potential Study for India. (Manual and Automatic) and Vehicle Type (Passenger Cars, Light Commercial Vehicle, 18 Cohen-Shacham E., e. a. (2019). Core principles and Heavy Commercial Vehicle): Opportunity for successfully implementing and upscaling Analysis and Industry Forecast, 2019-2026: Nature-based Solutions. Volume 98, 2019, pp https://www.alliedmarketresearch.com/india- 20-29, ISSN 1462-9011,https://doi.org/10.1016/j. automotive-hvac-market envsci.2019.04.014. 27 TechSci Research. (2018). India Passenger Car 19 Cohen-Shacham, E. W. (2016). Nature-based Air Conditioners Market By Vehicle Type Solutions to address global societal challenges. (Hatchback, MUV, Sedan & CUV), By Technology 20 Toxopeus, H. (2019). Taking Action for Urban (Automatic & Manual/Semi-Automatic), By Nature: Business Model Catalogue, Compressor Type (Variable Displacement & NATURVATION Guide. Fixed Displacement), Competition Forecast & Opportunities, 2023. TechSci Research. 21 NCCD. (2015). All India Cold-chain Infrastructure (Capacity Assessment of Status 28 Kumar, S., Sachar, S., Kachhawa, S., Goenka, A., & Gap). Delhi: National Centre for Cold-chain Kasamsetty, S. and George, G. (2018). Demand Development (NCCD). Retrieved from Analysis for Cooling by Sector in India in 2027. https://www.nccd.gov.in/PDF/CCSG_Final%20 New Delhi: Alliance for an Energy Efficient Report_Web.pdf Economy. 22 Yes Bank. (2018). Cold Chain Opportunities in 29 EESL. (n.d). Unnat Jyoti by Affordable LED for India: The Perishables Sector Perspective. YES All. Retrieved from EESL: BANK. Retrieved from https://aspirecircle.org/ https://eeslindia.org/en/ourujala/NewDelhi: wp-content/uploads/2022/01/Cold-Chain- Alliance for an Energy Efficient Economy. ICEAGRI.pdf 30 Haq, Z. (2022, August 19). Jal Jeevan Mission: 23 Chintada, V. G., K.V., S., Manyam, S. C., Srilaya, 52% rural households covered, tap water N. K., & Swati, H. (2017). Cold Chain Technologies mission in key phase. Hindustan Times. - Transforming Food Supply Chains. New Delhi: Climate Investment Opportunities in India’s Cooling Sector 109 31 Kumar, S. (2020, December 21). Sustainable Cooling is a Super Cool Idea for India. Retrieved 39 NITI Aayog. (2015). India Energy Security from Cool Coalition: https://coolcoalition.org/ Scenarios Version 2.0. New Delhi: Government sustainable-cooling-is-a-super-cool-idea-for- of India. india/ 40 BEE. (2017). Energy Conservation Building 32 Im, E.-S., Pal, J. and Eltahir, E. (2017). Deadly Code. New Delhi: BEE. heat waves projected in the densely populated agricultural regions of South Asia. Science US Department of Energy. (n.d.). Weatherisation 41 Advances. Assistance Program. Retrieved from Energy. gov: https://www.energy.gov/eere/wap/ 33 K-CEP. (2020). Building back better: How weatherization-assistance-program climate-friendly cooling can support a clean, resilientCOVID-19 recovery. Kigali Cooling 42 MoEFCC. (2021). India Cooling Action Efficiency Program (K-CEP). Plan: Operationalizing Space Cooling Recommendations. 34 MoEFCC. (2021). India Third Biennial Update Report to The United Nations Framework 43 BEE, AEEE. (2021). State Energy Efficiency Convention on Climate Change. Ministry of Index 2020. New Delhi: Bureau of Energy Environment, Forest and Climate Change Efficiency, Alliance for an Energy Efficient (MoEFCC), Government of India. Economy. 35 Maithel, S., Chandiwala, S., Bhanware, P., 44 AEEE, NITI Aayog, BEE, UNDP-GEF. (2017). Rawal, R., Kumar, S., Gupta, V. and Jain, M. Roadmap to fast track adoption and (2020). Developing cost-effective and low- implementation of Energy Conservation carbon options to meet India’s space cooling Building Code (ECBC) at the urban and local demand in urban residential buildings through level. Alliance for an Energy Efficient Economy. 2050. India Energy Transformation Platform. 45 AEEE. (2019). Mainstreaming Super-Efficient 36 Wong, N. H. (2011). Evaluation of the impact of Appliances in India. New Delhi: Alliance for an the surrounding urban morphology on building Energy Efficient Economy. energy consumption. Solar Energy, 85(1), 57-71. 46 Somanathan, E., Somanathan, R., Sudarshan, 37 Cool Coalition, K-Cep, SE4ALL, CEA A. and Tewari, M. (2018). The Impact of Consulting. (2021). Not passing on passive Temperature on Productivity and Labor Supply: cooling: how philanthropy can help accelerate Evidence from Indian Manufacturing. Becker passive cooling solutions and their climate Friedman Institute 1-68. benefits. Passive cooling knowledge brief. 47 Powerline. (2018). Interview with Mr. Saurabh 38 CEA. (2020). Growth of Electricity Sector in Kumar, Managing Director, EESL. Retrieved from India from 1947-2020. New Delhi: Ministry of https://powerline.net.in/2018/10/19/interview- Power, Central Electricity Authority. Retrieved saurabh-kumar-2/ September 22, 2021, from Central Electricity Authority. 48 Powergen India. (2020). Trigeneration: 110 Climate Investment Opportunities in India’s Cooling Sector Catalysing Decarbonisation & Energy Efficiency. New Delhi: Bureau of Energy Efficiency, Retrieved from Powergen India: https://www. Environmental Design Solutions (EDS), Shakti powergen-india.com/live-webinar-trigeneration- Sustainable Energy Foundation. catalysingdecarbonisation-energy-efficiency 57 NRDC. (2018). India-Keeping it cool, Models 49 Hindu Business Line. (2019). The promise of for city cool roof programs. Retrieved from trigeneration. Retrieved from Hindu Business UNDRR L i n e : h t t p s : / / w w w.t h e h i n d u b u s i n e s s l i n e. Prevention Web: https://www.preventionweb. com/specials/clean-tech/the-promise- net/news/india-keeping-it-cool-models-city- oftrigeneration/ article30150971.ece cool-roofprograms 50 Waite, M., Cohen, E., Torbey, H., Piccirilli, M., 58 NRDC. (2019). New Cool Roof Programs in Tian, Y. and Modi, V. (2017). Global trends in India – Hyderabad (Part 1). Natural Resources urban electricity demands for cooling and Defense Council. heating. Energy, 127, 786-802. 59 Mccormick, K. (2020). Cities, Nature and Zero Carbon Hub. (2015). Defining Overheating 51 Innovation: New Directions. International Evidence Review. CIBSE, Institute for Institute for Industrial Environmental Economics Environmental Design and Engineering (IEDE), (IIIEE), Lund University. The Bartlett, University College London (UCL), London School of Hygiene and Tropical 60 60 Lal, N. (2020). India’s programme Medicine (LSHTM). to create 200 urban forests has seen no progress in four years: https://scroll.in/ 52 EPA. (2008). Reducing Urban Heat Islands: article/967946/indias-programme-to-create- Compendium of Strategies, United States 200-urban-forests-has-seen-no-progress in- Environmental Protection Agency. US fouryears#:~:text=During%20the%20virtual%20 Environmental Protection Agency. celebration%20of,in%20the%20next%20 five%20years 53 Santamouris, M. (2014). Cooling the cities—a review of reflective and green roof mitigation 61 NRDC. (2016). Ahmedabad Heat Action Plan: technologies to fight heat island and improve Guide to extreme heat planning in Ahmedabad, comfort in urban environments. Solar Energy, India. Natural Resources Defense Council. 103: 682–703. https://www.nrdc.org/sites/default/files/ ahmedabad-heataction-plan-2018.pdf 54 UNEP. (2021). Beating the Heat: A Sustainable Cooling Handbook for Cities. Nairobi: United 62 NDMA. (2019). National Workshop on Nations Environment Programme. “Preparedness, Mitigation & Management of Heat Wave 2020”. Retrieved from National 55 The Rockefeller Foundation. (2014). To Disaster Management Authority: https://ndma. Reduce Heat Stress, Indore Develops Cool Roof gov.in/sites/default/files/2020-08/heatwave- Technology. Retrieved from https://www. report-dec2019.pdf rockefellerfoundation.org/blog/reduce-heat- stress-indoredevelops-cool/ 63 EESL India. (2021). Market Assessment for Super-Efficient Air Conditioners. EESL India. 56 BEE. (2011). Cool Roofs for Cool Delhi, 2011. Climate Investment Opportunities in India’s Cooling Sector 111 64 Frost & Sullivan. (2018). Dynamics of the Indian and Management of Cold Chain Infrastructure for Fan Market. Retrieved from https://www.frost. Agriculture & Allied Sectors. New Delhi: Ministry of com/wp-content/uploads/2018/09/Dynamics- Agriculture and Farmers Welfare. Retrieved of-the-Indian-Fan-Market_EDT.pdf from http://nccd.gov.in/PDF/ComprehensiveNote. pdf 65 BusinessToday. (2021). 4 lakh jobs, Rs 7,920 crore investment: The perks of PLI for white 74 IPCC. (2019). Special Report on Climate Change goods. Retrieved from BusinessToday.in: https:// and Land. Geneva: lntergovernmental Panel on www.businesstoday.in/latest/corporate/story/4- Climate Change. lakh-jobs-rs-7920-crore-investment-the-perks- of-pli-for-white-goods-292827-2021-04-07 Emerson Climate Technologies. (2015). The Food 75 Wastage & Cold Storage Infrastructure 66 EESL. (2021). NCEEP will help EESL in building Relationship in India: Developing Realistic Solutions. a strong ESCO market. Retrieved from https:// Pune: Emerson Climate Technologies. eeslindia.org/wp-content/uploads/2021/04/ Newsletter-March-2021-Edition-26-1.pdf 76 Medical Buyer. (2020). India begins augmenting its cold chain capacity. Retrieved from 67 Tabreed. (2021). Tabreed Partners with IFC for https://www.medicalbuyer.co.in/india-begins- Expansion in India. Retrieved from augmenting-its-cold-chain-capacity/ https://www.tabreed.ae/news/tabreed-partners- ifc-expansion-india/ 77 Kurian, L. (2021). Building agile and scalable pharma cold chain. Retrieved from Indian Transport 68 C2E2, ICLEI and UNEP. (2017). Rapid & Logistics News: https://www.itln.in/building-agile- Assessment of five Indian Cities, Thane. and-scalable-pharma-cold-chain-logistics 69 The Hindu. (2020). EESL, GAIL ink trigeneration 78 Sodhi, M., Singh, S. and Agnihotri, C. (2016). Cold project MoU. Retrieved from The Hindu: Chain Development for Fruits & Vegetables in https://www.thehindu.com/business/eesl-gail- India. Kinnow cold chain study. National Centre for ink-trigeneration-project-mou/article31742394. Cold-chain Development. ece 79 NCCD. (n.d). Awareness Program on Cold-chain 70 Cool Coalition. (2019). Cities Action on Efficient, Schemes. New Delhi: Ministry of Agriculture and Climate Friendly Cooling. United Nation Farmers Welfare. Secretary General Summit. 80 Rawat, V. S. (2019, March 23). Cold storage Terre Policy Centre. (n.d.). Warje Urban Forestry. 71 capacity expands, Rs 21,000 crore investment Retrieved from https://terrepolicycentre.com/ lined up by 2023. Retrieved from Business Warje-Urban-Forestry.asp Standard: https://www.business-standard.com/ article/economypolicy/cold-storage-capacity- 72 PIB. (2020, September 23). Cold Storage expands-rs-21-000-crore-investment-lined-up- Facilities in the Country. Retrieved from PIB by-2023-119032200623_1.html Press Releases: https://pib.gov.in/PressReleasePage. NCCD and E&Y. (2013). Refrigerated transportation: 81 aspx?PRID=1658114#:~:text=Currently%2C%20 bottlenecks and solutions. New Delhi: E&Y. there%20is%20374.25%20Lakh,is%20 Retrieved from: https://www.nccd.gov.in/PDF/E&Y- available%20in%20the%20country Report-Reefer-Transport.pdf 73 NCCD (n.d). Comprehensive Note on Creation 112 Climate Investment Opportunities in India’s Cooling Sector 82 World Bank. (2022). Cold Chain Energy 89 MoFPI. (2021). Seventeenth Report of the Efficiency in India: Analysis of Energy Efficiency Standing Committee on Agriculture, Animal Opportunities in Packhouses. World Bank. Husbandry, and Food Processing. New Delhi: Ministry of Food Processing Industries. Retrived 83 MP Ensystems, et al. (2019). Promoting Clean from:http://164.100.47.193/lsscommittee/ and Energy Efficient Cold-Chain in India. MP Agriculture,%20Animal%20Husbandry%20 Ensystems, Shakti Sustainable Energy and%20Food%20Processing/17_Agriculture_ Foundation and University of Birmingham. Animal_Husbandry_and_Food_Processing_33. Retrieved from https://shaktifoundation.in/wp- pdf content/uploads/2019/04/Cold-chain-in-India- Report.pdf 90 Kumar, C. and Majid, M. (2020, June 26). Renewable energy for sustainable development 84 ET Bureau. (2020, January 25). Haryana to set in India:current status, future prospects, up 200 pack-houses for vegetables and fruits. challenges, employment, and investment Retrieved from Economic Times: https:// opportunities. Energy,Sustainability and Society. economictimes.indiatimes.com/news/ economy/agriculture/haryana-to-set-up- 91 PIB. (2021, July 18). DBT-BIRAC supported 200-pack-housesfor-vegetables-and-fruits/ start up Blackfrog Technologies: Supporting the articleshow/73619482.cms Lastmile Delivery of Vaccines. Retrieved from h t t p s : / / p i b . g o v. i n / P r e s s Re l e s e D e t a i l m . 85 PIB. (2020, March 20). Development of aspx?PRID=1733754 Agricultural Marketing Infrastructure. Retrieved from Press 92 India CSR Network. (2021). IRCON’s CSR Information Bureau: https://pib.gov.in/ initiative under COVID-19 Vaccination Program PressReleseDetailm.aspx?PRID=1607344 by providing Cold Chain equipments. Retrieved from IndiaCSR. 86 Shagun. (2021, December 7). Gramin Agricultural Markets: Two years on, just 6% haats 93 AEEE. (2015). Evaluating Market Response to upgraded. Retrieved from DownToEarth: https:// the Appliance Standards and Labelling. New www.downtoearth.org.in/news/governance/ Delhi:Shakti Sustainability Energy Foundation. gramin-agriculturalmarkets-two-years-on-just-6- haats-upgraded-80588 94 Dhanraj, S., Mahambre, V. and Munjal, P. (2020). From income to household welfare: 87 MoAFW. (2020). Sub-Mission on Agricultural Lessons from refrigerator ownership in India. Mechanisation: Operational Guidelines. New Chennai: Madras School of Economics. Delhi:Ministry of Agriculture and Farmers Welfare. 95 K@W. (2016, October 20). How to Avoid the Pitfalls of Innovation in Emerging Markets. 88 CaaS. (2020, October 22). Cooling as a Retrieved from The Wharton School: https:// Service facilitating resilient agriculture and knowledge.wharton.upenn.edu/article/how- crops in India. to-avoid-thepitfalls-of-emerging-market- Retrieved from CaaS Initiative: https://www. innovation/ caas-initiative.org/news/cooling-as-a-service- facilitatingresilient-agriculture-and-crops-in- 96 Ozone Cell. (2021). Study on Cold Chain Sector india/ in India for Promoting Non-ODS and Low-GWP refrigerants. New Delhi: Ministry of Environment, Climate Investment Opportunities in India’s Cooling Sector 113 Forest & Climate Change. (2020). Safety, Upskilling, and Good Servicing Practices for Cooling: Standardising Training 97 MoRTH. (2021). Constructional and Functional for Refrigeration and Air-Condition Technicians. Requirements for Insulated Vehicles. New Delhi: New Delhi: Council on Energy, Environment Ministry of Road Transport and Highways. and Water (CEEW). Retrieved from https://www. ceew.in/publications/safety-upskilling-and- 98 MoRD. (2017). Guidelines of Aajeevika good-servicing-practices-cooling-0 Grameen Express Yojana. New Delhi: Ministry of Rural Development. 107 TERI. (2020). Mobile Air Conditioning (MAC): A Technology Landscape, Challenges and 99 World Bank Group. (2021). The Cold Road to Opportunities for Sustainable Cooling. Retrieved Paris: Mapping Pathways Toward Sustainable from ENVIS Resource Partner on Renewable Cooling for Resilient People by 2050. Energy and Climate Change: https://www.teriin. Washington DC: The World Bank. org/sites/default/files/2020-12/MAC-pb.pdf 100 NCCD. (2017). Railways mode of Transport 108 Ayres, M., Stankevich, N. and Diehl, A. (2020). for Cross-regional Trade of Perishable Agri- Mobile Cooling: Assessment of Challenges and produce. New Delhi: National Centre for Cold- Options. The World Bank. chain Development. 109 Blumberg, K., Isenstadt, A., Taddonio, K. 101 Ministry of Railways. (2021). Kisan Rail a Boon N., Andersen, S. O. and Sherman, N. J. (2019). for Farmers. New Delhi: Ministry of Railways. Mobile Air Conditioning: The Life-Cycle costs and greenhouse-gas benefits of switching to TCI. (2015). Multimodal Logistics. Transport 102 alternative refrigerants and improving system Corporation of India Ltd. efficiencies. The International Council of Clean Transportation. 103 NCCD. (2021, March). NCCD Entrepreneur Development and Skill Training for Ripening NITI Aayog. (2018). Transforming India’s 110 Chamber Training Calendar. Retrieved from Mobility: A Perspective. NITI Aayog. NCCD:https://nccd.gov.in/PDF/NCCD%20 training%20-%20March%202021.pdf 111 Roychowdhury, A. and Chattopadhyaya, V. (2021). India’s Fuel Economy Benchmarks: How 104 World Bank Group. (2017). Inclusive to make them work for an energy-efficient and Innovations: Providing Affordable Storage climate-secure world. Centre for Science and Solutions. World Bank Group. Retrieved from Environment. https://www.innovationpolicyplatform.org/www. innovationpolicyplatform.org/system/files/8- 112 IEA. (2019). Cooling on the Move: The future of Storage%20Solutions_Agri_2pg_Aug/index.pdf air conditioning in vehicles. Paris: International 105 National Skill Network. (2018, August 3). Energy Agency. Retrieved from https://iea.blob. National Skill Network. Retrieved from National core.windows.net/assets/425608f4-4368-42ca- Skill Network: https://www.nationalskillsnetwork. 8faa-568d241ce7ea/Cooling_on_the_Move.pdf in/rac-service-technician-skills-training/ 113 CCAC. (2019, March 25). Green Automobile Air Conditioner Technology Demonstration 106 Gorthi, A., Bhasin, S. and Chaturvedi, V. Project .Retrieved from Climate and Clean Air 114 Climate Investment Opportunities in India’s Cooling Sector Coalition:https://www.ccacoalition.org/en/news/ Equipment Using Non-ODS Based Refrigerants. greenautomobile-air-conditioner-technology- New Delhi: Ministry of Environment, Forest and demonstration-project Climate Change (MoEFCC), Government of India. 114 Purushothaman, R. (2021, September 27). Optimizing Quality of Indoor Air in Metro Trains. 121 Bhasin, S., Gorthi, A., Chaturvedi, V. and Retrieved from Rail Analysis India: https://news. Asphjell, T. (2019). Acting on many fronts: railanalysis.com/optimizing-quality-of-indoor- Incentives and Regulations to Phase-down air-inmetro- HFCs in India. CEEW. Retrieved from trains/ h t t p : / / w w w. m o n t r e a l 3 0. i o 3 c . o r g / s i t e s / montreal30.io3c.org/files/pictures/20%20matin/ 115 Ozone Cell. (2021). The Montreal Protocol: Velders_30MP_Symposium_Paris_Sept2017. India’s Success Story. Ozone Cell, Ministry of pdf Environment, Forest and Climate Change (MoEFCC), Government of India. 122 MoEFCC. (2016, September 16). Environment Ministry announces major initiative for R&D into 116 AEEE. (2019). India Cooling Action Plan - A next generation HFC refrigerant alternatives. Guided Graphical Tour. Retrieved from Alliance Retrieved from Press Information Bureau, for an Energy Efficient Economy (AEEE): https:// Government of India. Ministry of Environment, aeee.in/data-analysis/india-cooling-action-plan- Forest and Climate Change (MoEFCC):https://pib. aguided- graphical-tour/ gov.in/newsite/printrelease.aspx?relid=149825 117 Industry ARC. (2021). India Ammonia 123 Chaturvedi, V., Deol, B., Seidel, S., Refrigerant Market - Forecast (2021 - 2026). Jaiswal, A., Sah, A., Sharma, M., Kaur, N. and Retrieved from IndustryARC: https://www. Andersen, S.O. (2016). Cooling India with Less industryarc.com/Report/18273/india-ammonia- Warming: Examining Patents for Alternatives refrigerantmarket.html to Hydrofluorocarbons. Council on Energy, Environment and Water (CEEW). 118 Balance Solutions Hub. (2016). Mapping Natural Refrigerant Technology Uptake in India: 124 World Bank. (2016). HFO Intellectual Property Current State and Future Narratives. cBalance Rights and Technology Transfer. The World Bank Solutions Hub. Group. 119 UNEP. (2021). Report of the Executive 125 The World Bank. (2022, March). South Africa Committee of the Multilateral Fund for the Pioneers Innovative Wildlife Conservation Bond Implementation of the Montreal Protocol to to Protect Black Rhinos and Support Local the Thirty-Third Meeting of the Parties to. Communities. Retrieved from The World Bank: Online (23–29 October 2021): United Nations h t t p s : / / w w w.w o r l d b a n k . o r g / e n / n e w s / Environment Programme (UNEP). feature/2022/03/23/south-africa-pioneers- innovative-wildlifeconservation- MoEFCC. (2021). Study on Public Procurement 120 bond-to-protect-black-rhinos-and-support-local- Policies for Refrigeration and Air-Conditioning communitie Climate Investment Opportunities in India’s Cooling Sector 115 Annexes Annex 1: Prioritization each sector and collected data on investment potential and developmental benefits, including of Sustainable Cooling job creation potential for some sectors. Opportunities Step 2 – Multistakeholder Consultations: The study focuses on all identified thematic The study authors undertook stakeholder areas under ICAP including space cooling in consultations with government, private sector buildings, cold chain and refrigeration, transport and sectoral experts to identify and assess the air conditioning and refrigerants (covering the key barriers for sustainable cooling in each of ICAP thematic areas of R&D, refrigerant demand the sectors. This included identifying associated & indigenous production, and refrigeration & institutional, financing, regulatory and market air-conditioning servicing sector). It presents barriers and the required sustainable cooling actionable roadmaps for each of the cooling interventions. The study followed a highly sectors as well as prioritized opportunities consultative process to help identify and prioritize for concessional financing and private sector opportunities and associated interventions that investments. A series of interconnected steps were pragmatic, implementable and have the were followed to identify holistic, inclusive, buy-in of key stakeholders in all cooling sectors viable, specific, and scalable interventions that and across value chains. can operate through partnerships with various actors and add impetus to the implementation of Step 3 – Clustering of Sustainable Cooling ICAP goals. These steps are presented below: Opportunities: The identified sustainable cooling interventions were clustered based Step 1 – Literature Review: The study began on institutional set up, ease of implementation with an extensive literature review and covered and complementarity of actions. This clustering a detailed analysis of the existing policies, resulted in a longlist of 19 sustainable programs and initiatives in India that are directly opportunities with 10 opportunities in space or indirectly relevant to the multisectoral actions cooling, four opportunities in cold chain and recommended under ICAP. This analysis refrigeration, two opportunities in passenger covered existing governmental schemes and transport air conditioning and three opportunities programs mapped under ICAP and went beyond in the refrigerant sector. to identify other relevant cooling policies and programs to strengthen India’s cooling policy Step 4 – Prioritization of Sustainable Cooling strategy. Building on the ICAP sectoral analysis Opportunities: A two-step multicriteria for cooling demand, energy savings and prioritization framework was applied to the emissions reduction, the study identified various longlist of clustered sustainable cooling areas and actions for sustainable cooling in 116 Climate Investment Opportunities in India’s Cooling Sector opportunities. The first step covered the criteria scoring scale of 1 to 3 (from low to high potential of climate benefits, development benefits and for accessing concessional and private finance). ability to implement. The potential of an opportunity to leverage Table A 1.1 provides details of these three criteria, different financing instruments is an important their sub-criteria, weightage, scoring scale and criterion for understanding the role and scope rationale used in the first step prioritization. The of involvement of financing institutions and second step prioritization focused on evaluating MDBs in implementation. Given the importance the role of concessional financing and private of this criterion in selecting opportunities where sector investments. Notably, the criteria covered concessional finance instruments or private in this step, that is, the need and potential for sector investment can enable implementation, leveraging concessional finance or private financing has been given double weightage sector investment, has been given higher compared to the other criteria. weightage as compared to other criteria with a Prioritization Criteria for Concessional Financing • Study adopted two-part prioritization to identify key areas where concessional finance can bring about significant impact. • Multi-criteria assessment approach: Climate Investment Opportunities in India’s Cooling Sector 117 Table A 1.1: Method used to prioritize sector opportunities Criteria/ Criteria Sub-criteria Description Sub-criteria Scoring Scale Rationale Weightage Climate GHG mitigation potential 1.00 0: No GHG mitigation from Providing sustainable cooling and thermal mitigation for the cooling opportunity cooling comfort for all, along with delivering benefits 1: Low GHG mitigation from environmental and socioeconomic benefits cooling is the overarching goal of ICAP 2: Medium GHG mitigation from cooling To identify opportunities that can help 3: High GHG mitigation achieve this goal, climate mitigation from cooling benefits, assessment of GHG mitigation Benefits potential, and development benefits, Develop- Job creation potential, 1.00 0: No development benefits accounting for job creation potential, SDG ment SDGs, number of 1: Low development linkages, etc., have been selected as benefitsw beneficiaries covered by benefits criteria for prioritization the opportunity 2: Medium development benefits Given the key role that prioritized 3: High development opportunities can play in fulfilling the main benefits ICAP goal, each benefit criterion has been given a weightage of 1 Ease of technology 0.33 0: No technical feasibility To identify opportunities that have high access which covers easy 1: Low technical feasibility & ease of implementation, it is important access to the associated market preparedness to assess them on their technology and technology knowledge with 2: Medium technical knowledge access, scalability, presence of Implemen- Technical no restrictions in terms of feasibility & market an enabling policy environment, and level tation feasibility Intellectual Property Rights; preparedness of stakeholder complexity. Additionally, it is market preparedness and 3: High technical feasibility also important to ensure that opportunities adaptability of technologies & market preparedness identified are driven by a sustainable cooling agenda 118 Climate Investment Opportunities in India’s Cooling Sector Criteria/ Criteria Sub-criteria Description Sub-criteria Scoring Scale Rationale Weightage Likelihood of • Sustainable cooling 0.33 0: Not implementable from To develop an actionable roadmap for large-scale is a key driver in a cooling perspective ICAP, technical feasibility, likelihood of adoption ensuring adoption of the 1: Low implementability & large-scale adoption and administrative opportunity scalability feasibility were identified as the key criteria 2: Medium implementability encompassing the factors outlined above, • Potential for scalability & scalability and were thus selected for prioritization and replicability of 3: High implementability & opportunity scalability Each of these criteria together indicate Administ- • Policy feasibility: 0.33 1: Low policy feasibility and/ the implementability of an opportunity and rative Supportive laws, or several stakeholders have been given a total weightage of 1. feasibility regulations and policies in across different governance Implemen- place for the opportunity; tation levels required for planning ongoing programs & & implementation schemes in place for 2: Policy feasibility convergence and few stakeholders • Level of stakeholder participation needed to required for planning and plan & implement the implementation opportunity, e.g., multiple 3: Policy feasibility and one ministries or central- key decision-maker for state-local government planning for the opportunity coordination or only central government action, etc.) Climate Investment Opportunities in India’s Cooling Sector 119 Criteria/ Criteria Sub-criteria Description Sub-criteria Scoring Scale Rationale Weightage Financing - Need and potential 2.00 1: Low potential for The potential of an opportunity to leverage for leveraging various accessing concessional/ different financing instruments is an concessional finance private finance important criterion for understanding the instruments and/or private 2: Medium potential for role and scope of involvement of financing sector investment to accessing concessional/ institutions/MDBs in implementation implement the opportunity private finance 3: High potential for Given the importance of this criterion in accessing concessional/ selecting opportunities where concessional private finance finance instruments or private sector investment can enable implementation, financing has been given double weightage compared to the other criteria. 120 Climate Investment Opportunities in India’s Cooling Sector Annex 2: Detailed Roadmap for Space Cooling Sector Note: Prioritized opportunity and its roadmap has been highlighted Proposed Interventions National & Key Instrument State Policy Short Term (2022-24) Medium Term (2025-30) Long Term (2031-38) Stakeholders Alignment 1. Reduce demand by integrating passive measures in buildings 1.1 Support implementation of residential and commercial building energy codes in new buildings Amend EC Act to support Mandate ENS adoption Review ENS Policy BEE, Ministry of EC Act, mandatory implementation of across states: implementation status Power ENS ENS • Integrate in by-laws and impact to inform • Integrate in building stringency approval processes revision of the code Support states and cities to adopt and implement the Policy BEE, ULBs residential building energy code – ENS: SDAs, state • Develop demonstration projects UDD, CPWD, • Update central and state schedules of rates to state PWD incorporate building materials and construction solutions • Facilitate technical assistance to private and government projects to implement the code Provide green credit lines to catalyze energy efficient Investment: public MDBs, FIs housing: and private finance • Increase housing supply through preferential terms for developers, state and city housing departments, combined with technical assistance • Increase housing demand through benefits for homeowners such as preferential loans combined with awareness about the benefits of thermally comfortable housing Climate Investment Opportunities in India’s Cooling Sector 121 Proposed Interventions National & State Key Instrument Policy Align- Short Term (2022-24) Medium Term (2025-30) Long Term (2031-38) Stakeholders ment Develop market transformation programs (such as supporting manufacturing, developing standards, providing tax rebates, etc.) to address affordability and accessibility of high-performance building envelope solutions (high performance windows, re- flective and insulating roof tiles, shading solutions, etc.) for ENS implementation • Create awareness among private sector design and Knowledge BEE, MoHUA, construction professionals about passive cooling measures state UDD and ENS adoption • Create awareness campaigns for end users about thermal comfort and energy efficiency benefits in homes to create a demand pull from homeowners Capture learnings from this Policy State UDD, Energy Develop a streamlined strategy program to inform ECBC ULBs, BEE, Conservation for ECBC implementation implementation in other cities SDAs Building Code assistance (technical and financial) in 8-10 large cities and ULBs with the technical potential and implementation capacity Assess skill requirements and Training and support for Knowledge National Skill National Skill training specific to energy inclusion in the work force Development Development efficient/green building Council, Skill Mission construction, new materials in Council for close collaboration with industry Green Jobs, CREDAI Create knowledge packs for identified skill sets. 122 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions National & Key Instrument State Policy Stakeholders Short Term (2022-24) Medium Term (2025-30) Long Term (2031-38) Alignment 1.2 Mainstream thermal comfort parameters across affordable housing programs and policies at the national and state levels Advocate for inclusion of Update affordable housing Policy, MoHUA, MoRD PMAY- Urban; thermal comfort as an essential policies and programs at the knowledge state UDD PMAY- Rural; criterion in national, state and national and state level to include state-level city level affordable housing thermal comfort as an essential affordable hous- policies and programs: criterion for housing construction ing policies • Sensitize relevant government departments on thermal comfort benefits in affordable housing design and construction through awareness and training programs Support demonstration Support states and cities in Policy, public State UDD, projects for affordable Support institutionalizing the integration finance departments, demonstration projects for of passive cooling measures ULBs, state affordable housing: through their procurement PWD, MDBs • Integrate residential energy mechanisms: code, ENS, provisions in • Update tenders with large (applicable) housing applicable construction projects materials, technologies and costs, ENS compliance criteria Climate Investment Opportunities in India’s Cooling Sector 123 Proposed Interventions National & Key Instrument State Policy Stakeholders Short Term (2022-24) Medium Term (2025-30) Long Term (2031-38) Alignment Provide green credit lines to state and city housing departments Investment: MDBs, FIs to catalyze construction of thermally comfortable affordable public finance housing • Develop and disseminate guidance for self-build housing Knowledge NHB, HUDCO, PMAY- Urban; (outside the purview of ENS energy code) including low cost, MoHUA, MoRD, PMAY- Rural; efficient and simple building solutions. state UDD, state-level • Support self-build housing with local skilling centers NDMA affordable providing technical know-how of construction techniques, housing new materials, design guidance and possibly supply of policies, materials. Disaster Management Act Leverage institutional finance streams to disseminate guidance Investment: MDBs, FIs and provide technical assistance to homeowners of self-build public & affordable housing. Avenues could include: private finance • Government’s housing programs such as PMAY-Urban’s beneficiary linked component, PMAY-Rural • Development finance streams to state and city housing departments; financial intermediaries such as banks, affordable housing finance companies, private sector developers, etc., and post disaster housing reconstruction 124 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions National & Key Instrument State Policy Stakeholders Short Term (2022-24) Medium Term (2025-30) Long Term (2031-38) Alignment 1.3 Retrofit existing buildings to improve thermal comfort through efficient building envelope and cooling technolo- gies Develop an industry led R&D program for India-specific retrofitting Support Policy, BEE, DST, Energy solutions (insulating plasters/renders, roof insulation tiles, radiative commercialization of investment: MDBs, FIs Conservation films, smart windows, etc.) retrofitting solutions public and Act and products private finance • Develop a retrofitting policy Support Policy, BEE, MDBs, FIs roadmap and economic implementation of investment: viability assessment for retrofitting roadmap public finance different building types • Develop a retrofitting program for low-income households, referring to the global energy poverty/ weatherization assistance • Support demonstration projects across social housing and public sector buildings Climate Investment Opportunities in India’s Cooling Sector 125 Proposed Interventions National & Key Stakehold- Long Term Instrument State Policy Medium Term ers Short Term (2022-24) (2031-38) Alignment (2025-30) 2. Improve efficiency of cooling technologies 2.1 Enable market transformation towards super-efficiency for high impact cooling technologies Assess pathways for aligning the Implement the S&L pathways Review and revise the Policy BEE Energy S&L program to achieve ICAP for key impact appliances S&L strategy: Conservation goals: such as RACs, fans, chillers, • Monitor impact Act, S&L • Set targets for ratcheting up etc. of S&L on energy Program, Make standards (MEPS, best available • Large-scale industry savings in India technologies available) and consultations to identify • Appliance costs timelines for key appliances bottlenecks, gaps • Market share of • Assess supporting market • Supporting analysis for higher efficiency transformation initiatives ratcheting up MEPS models and incentives to achieve • Setting up testing capacity • Consumer uptake acceleration/adoption of key and protocols and feedback super-efficient technologies. Awareness and behavior This could include upstream change programs to support incentives to manufacturers, creation of consumer demand synergies with initiatives under the Make in India program, addressing higher upfront costs for consumers, etc. • Assess supporting infrastructure requirements, especially testing capacity through test labs and protocols 126 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions National & Key Stakehold- State Long Term Instrument Short Term (2022-24) ers Policy Align- Medium Term (2025-30) (2031-38) ment Develop an upstream incentive Implement the program, Policy, BEE, EESL, program for BLDC fan/motor including effective outreach investment: MDBs manufacturers: Monitor impact on costs and public finance • Set market transformation energy savings, uptake by targets to be achieved in consumers consultation with industry • Finance the program • Devise a monitoring and impact assessment strategy • Develop a communications strategy for end users Leverage the PLI program for Impact assessment of the Investment: MDBs, FIs PLI program, manufacturing RAC components: program: public and BEE, DPIIT – S&L program • Integrate environmental • Impacts on the private MoCI performance standards for performance, costs of each finance high efficiency impact RAC component components (compressors, heat exchangers and Impacts on RAC system design expansion valves) to achieve and performance higher system efficiencies in RACs • Assess the impact on costs of higher efficiency RACs due to domestic manufacturing • Develop financial mechanisms to bridge any additional costs, and nudge manufacturing towards high system efficiency components Climate Investment Opportunities in India’s Cooling Sector 127 Proposed Interventions National & Key Stakehold- Instrument State Policy Long Term ers Short Term (2022-24) Medium Term (2025-30) Alignment (2031-38) Support the scaling up of EESL’s Investment: EESL S&L program Super-Efficient Air Conditioner public finance bulk procurement program: (preferential • Revise the outreach and procurement) beneficiary strategy, looking at demand aggregation across large residential projects, RAC rental markets through suppliers, etc. • Develop a framework for assessing energy savings impact and consumer feedback • Support the development of a voluntary label for super- efficient air conditioners 2.2 Accelerate uptake of not-in-kind technologies, especially to enable access in sectors with low adoption of comfort cooling Assessments of not-in-kind Enable uptake of not-in-kind Enable accelerated Policy, BEE, MDBs, FIs, National Mission technologies, applications and technologies: uptake of not-in- investment: SIDBI on Enhanced benefits: • Evaluate impacts on kind technologies: public and Energy • Feasibility for specific productivity of workers, • Investments for private Efficiency technologies for particular energy system costs and supply chain finance building types based performance of demonstration integration, on energy consumption projects component requirements, including • Develop business models manufacturing potential for hybrid for affordable comfort Innovative financing technology applications for productivity to spur models, for investment in developing technology supply chain and 128 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions National & Key Instrument State Policy Stakeholders Short Term (2022-24) Medium Term (2025-30) Long Term (2031-38) Alignment • Support demonstration and building expertise for adoption including via projects in manufacturing 2-3 promising not-in-kind pay as per use, and sectors and other public technologies. CaaS models buildings with limited access to comfort cooling Awareness and capacity • Create a roadmap on building programs for enabling productivity architects, mechanical across sectors (with low engineers and building owners access to comfort cooling), including consultations with micro, small and medium enterprises and MoCI 2.3 Optimize operational cooling energy use in commercial buildings through energy performance data, disclosure and benchmarking, and review of ventilation standards in view of COVID-19 guidance Develop a framework for Institutionalize the Carry out periodic Knowledge BEE, ISHRAE PAT, ECBC disclosure and benchmarking for benchmarking and disclosure assessments to commercial buildings, including program: understand the space cooling performance • Identification of an impact of energy • Consult with government and organization to anchor efficiency intervention building industry this process and program such as codes and • Explore synergies with funding equipment standards BEE’s designated consumer on operational energy notification, mandating energy use audits for energy intensive Use this data to buildings inform energy Increased adoption of digitization efficiency and space and IoT applications to aid cooling policies availability of energy use data Climate Investment Opportunities in India’s Cooling Sector 129 Proposed Interventions Key National & State Long Term Instrument Medium Term Stakeholders Policy Alignment Short Term (2022-24) (2031-38) (2025-30) Detailed technical assessment Implementation guidance for Mainstream Knowledge BEE, ISHRAE of change in ventilation new buildings and retrofitting of guidance on requirements in centrally air- existing systems: indoor air quality conditioned buildings in view • Develop case examples in air conditioned of the health-related guidance for good practices, use of and mixed mode issued due to COVID-19 alternative building design buildings • Assessment of impacts on and cooling technologies that Inform changes system design,performance can meet criteria in standards for and costs • Monitoring of buildings to design, O&M Large scale industry collect data on indoor air of central air- consultations to inform the quality conditioning process systems 3. Shift demand to district cooling 3.1 Support uptake of DCS and tri-generation, including development of business models and policy roadmap Convene stakeholders to assess policy outlook on natural gas Policy EESL, PNGRB, PNGRB allocation and pricing for tri-generation projects GAIL India Ltd., Regulations EESL Clarity on the role of gas to meet thermal requirements versus limiting it as a transition fuel to meet peak power requirements and balancing intermittent and variable RE technologies Support CaaS business models for ESCOs. Scale up DCS Policy, MDBs, FIs, Smart Cities Example: EESL’s tri-generation program (comprising total upfront implementation, investment: EESL, State Mission investment and ‘Pay as you Save’ model) to enable private sector establish and financing. 130 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions National & Key Instrument State Policy Short Term (2022-24) Medium Term (2025-30) Long Term (2031-38) Stakeholders Alignment Support feasibility assessments and pilot projects to assess standardize project public & UDD, State commercial viability of merchant DCS model across greenfield/ development process, private finance TCPO brownfield developments business models and Develop models for long-term benefits for cities to adopt DCS contracting. infrastructure (equity/revenue models) Assess techno-economic Support demonstration projects Policy, MDBs, FIs feasibility and promote R&D investment: MoHUA, state for alternate fuels, waste heat public & UDD, state streams, treated wastewater, private finance TCPO free cooling through natural water bodies, etc. Develop direct cool roadmap, focusing on the value chain of National Policy for Policy BEE, EESL, URDPFI projects and applicability in upcoming sectors such as cold chain, DCS defining a code MoHUA, guidelines; city warehouses, industrial applications, etc. of practice, cooling State UDD, masterplans; service agreements, State TCPO environmental Integrate feasibility evaluation of DCS for greenfield developments customer protection MoEFCC, MoCI, impact for high density cooling requirements (minimum 8,000 TR per sq measures, tariffs, Green building assessment; km) through: applicable taxes, etc. rating agencies Energy • “Connect unless” policies integrated in urban planning, zoning, Conservation or building codes, green building rating systems whereby Act developers of buildings in priority zones are required to connect to a DCS system • Environmental clearances for major real estate and industrial projects issued by MoEFCC • Special Economic Zones allow CaaS models to provide cooling for buildings by third parties Climate Investment Opportunities in India’s Cooling Sector 131 Proposed Interventions National & State Long Term Key Stake- Medium Term Instrument Policy Short Term (2022-24) (2031-38) holders (2025-30) Alignment 3.2 Assess the role of discoms in space cooling transition to district energy and cooling as a service models Assess the role discoms can play in the space cooling Knowledge Discoms, DSM Regulations transition to district energy technologies and CaaS BEE, Ministry models: of Power • Impact on the grid from rapid additional space cooling demand in the next 20 years, including peak load, power procurement, and excess power export to the grid • Leveraging data from smart meters • Role of off-peak tariff structures, large-scale integration of thermal storage and renewables Design of targeted space cooling DSM programs through periodical load research, understanding consumer-wise load curves, etc. 4. Adapt cities to manage heat stress 4.1 Integrate climate data and long-term measures to increase resilience of at-risk communities, as part of disaster risk reduction and preparedness planning in cities Mapping future climate risk to design Support states and cities in developing Knowledge, NDMA, IMD, National Mission on disaster response: and implementing an integrated disaster policy DST Strategic Knowledge • Assess long-term heat wave risk response framework including: for Climate Change, incorporating climate modelling to • Systematic long-term data collection and National Disaster Man- predict impacts (likely frequency, assessment of likely heat risk agement Act, Urban intensity and duration of heat • Cooling action plans of heat related Heat Action Plans waves) impacts for vulnerable communities, • Map risks for vulnerable including coordination frameworks with communities and city-wide impacts other departments such as housing and urban planning 132 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions National & State Long Term Key Stake- Medium Term Instrument Policy Short Term (2022-24) (2031-38) holders (2025-30) Alignment • Assess critical infrastructure’s • Guidance on impacts and resilience of (electricity grids, health critical infrastructure services for relevant infrastructure, etc.) ability to ministries and departments respond in a heat wave incident and resilience measures needed 4.2 Mainstream passive cooling measures in urban planning, enable private sector participation and knowledge alliances to aid implementation in cities Develop guidelines for cities to Mainstream urban passive cooling measures Policy MoHUA, Local area plans, integrate and implement urban passive across local and urban planning policies and NIUA, state urban masterplans cooling measures in local and city frameworks in cities. UDD, ULBs, state/ city action plans level planning frameworks. This should• Technical and financial support for pilot state environ- on climate change/ include: projects such as upgrading of pavements, ment depart- adaptation plans • Passive cooling measures, street design, urban parks, etc. ments application and costs • Capacity building of relevant city Guidance on how to integrate in new officials/ planners about the need for design and retrofits passive urban cooling measures and implementation guidance Assess synergies with existing urban • Leveraging trigger points for cost- regulations and funding streams for effectively dovetailing specific urban implementing urban cooling measures, cooling interventions such as state and city level climate Inclusion of design requirements and change action plans/ adaptation plans materials in standard contracting processes Climate Investment Opportunities in India’s Cooling Sector 133 Proposed Interventions National & State Long Term Key Stake- Medium Term Instrument Policy Short Term (2022-24) (2031-38) holders (2025-30) Alignment Create knowledge alliances to support cities through Assess impact of Knowledge, NIUA, collaboration with local academic institutions, civil society successful models to policy ULBs, state and global city-to-city partnerships to exchange best inform replication and government, practices. scaling up of solutions in academic and cities. civil society Create awareness about pilots, best practices and institutions assessment of multiple benefits (public health, urban resiliency and climate change) for the city and the community. Develop and pilot innovative models for states and cities Policy, State UDD, CSR, State Action to enable private sector participation in implementing investment: ULBs, CSR, Plans for Climate urban cooling measures such as NbS: public and pri- grants Change • Earmark CSR funding for urban climate adaptation vate finance, measures including passive cooling measures. knowledge • Access CSR, philanthropy-based grants to demonstrate pilot solutions Develop assessment methods for value creation for communities combined with community participatory models for local level solutions Develop guidelines to address heat Support cities in implementation of urban Policy National & National Disaster stress for vulnerable communities in cooling action plans for vulnerable state disaster Management Act, urban areas. communities management Urban Heat Action • Identifying short- and long- • Integrating long-term measures for agencies, Plans, State Action term measures such as access increasing resilience in urban heat action ULBs, state Plans for Climate to cooling shelters, cool roof plans environment Change programs for publicand private departments buildings, retrofitting informal and other social housing, integrating targeted NbS 134 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions National & State Long Term Key Stake- Medium Term Instrument Policy Short Term (2022-24) (2031-38) holders (2025-30) Alignment • Enabling community participation • Inter-departmental governance PHFI, Mo- in developing action plans mechanisms for implementation of these HUA, NIUA including creation of awareness measures about heat-related impacts, response during a heat wave Identifying and accessing funding sources incident, communicating tangible including municipal, climate adaptation, public benefits health and disaster response budgets Frameworks for inter-sectoral coordination and budgets for adaptation measures in urban planning and heat related disaster response CPWD: Central Public Works Department; CREDAI: Confederation of Real Estate Developers’ Associations of India; DSM: Demand Side Management; HUDCO: Housing and Urban Development Corporation Ltd.; NHB: National Housing Bank; NIUA: National Institute of Urban Affairs; PAT: Perform Achieve and Trade; PNGRB: Petroleum and Natural Gas Regulatory Board; SDA: State Designated Agency; SIDBI: Small Industries Development Bank of India; TCPO: Town and Country Planning Organisation; UDD: Urban Development Department; URDPFI: Urban and Regional Development Plans Formulation and Implementation Climate Investment Opportunities in India’s Cooling Sector 135 Annexure 3: Detailed Roadmap for Cold Chain and Refrigeration Sector Note: Prioritized opportunity and its roadmap has been highlighted Proposed Interventions Medium Term Long Term Instruments Key National & State Short Term (2022-24) Stakeholders Policy Alignment (2025-30) (2031-38) 1. Support development of new energy efficient and sustainable cold chain networks 1.1 Supporting development of sustainable and energy efficient end-to-end cold chain networks, including refrigerated transport Conduct nation-wide assessment to Establishing sustainable large-scale cold chain Knowledge MoFPI, MoFAHD, PMKSY, MIDH identify infrastructure gaps for each infrastructure where gaps identified through MoAFW , NHM cold chain subsector (i.e., horticulture models similar to Mega Food Parks produce, fish, meat, dairy, healthcare) that results in losses Develop action plan for setting up small- Create incentives for FPOs to develop direct Knowledge, MoFPI, MoFAHD, DFI, PMFME scale decentralized cold chain through market linkages with end-to-end decentralized policy, MoAFW cooperatives/FPOs at village/cluster sustainable cold chains investment level private • Develop business models for finance, producer owned cold supply chains Support APMCs to develop cold chain links at MDBs/FIs • Explore potential of rural cold chain mandis to reduce food loss at market corridors through e-logistics online platforms that connect growers with consumers using a sustainable end- to-end cold chain Develop leasing and renting models for Modify existing Scale up of Policy, CaaS, MoAFW, SMAM, CSISAC small-scale cold storages, similar to pay schemes to include successful renting knowledge MoHFW per use models for for farm equipment cold chain components and leasing models as rental options across the country 136 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions Medium Term Long Term Instruments Key National & State Short Term (2022-24) Stakeholders Policy Alignment (2025-30) (2031-38) • Develop linkages with initiatives Implement pilot such as CaaS to assess feasibility of projects for cold chain such models in India components in a CaaS, pay as you go, leasing model CaaS, pay as you go, leasing model Set up inter-ministerial committee, Implement measures Enforce measures Policy MoFPI, MoAFW, PMKSY with MoFPI as nodal entity, to identify proposed by committee proposed by FSSAI, MoFAHD challenges in implementation and to bring in ease of committee propose policy/regulatory measures for implementation of an large-scale effective implementation of integrated cold supply “Integrated Cold Chain, Value Addition chain and Preservation Infrastructure” Modify existing schemes (MIDH, etc.) Bring in schemes/ incentives to ensure that Policy, MoFPI, NCCD, PMKSY, MIDH, to provide preference for development construction of all new cold chain components investment MoAFW, APEDA NHM of multi-commodity cold chain (rather is carried out in a holistic manner, ensuring public than single commodity cold chain as has end-to-end linkages finance, been the case thus far) MDBs/FIs Develop MIS through inter-ministerial Ensure that all decision making and monitoring Knowledge MoFPI, MoAFW, PMKSY collaboration, to track infrastructure for cold chain infrastructure development MoHFW, development and e-performance is carried out with the support of the MIS, MoRTH, MNRE monitoring to improve overall efficiency ensuring sustainable development of cold-chain systems: • Regularly upgrade MIS in line with new • Can be built along lines of MoHFWs research and technology advancements eVIN portal Climate Investment Opportunities in India’s Cooling Sector 137 Proposed Interventions Long Term National & State Key Short Term (2022-24) Medium Term (2025-30) (2031-38) Instruments Policy Stakeholders Alignment Identify technologies for RE Support demonstration projects Support scale Policy, MNRE, MoFPI, PM KUSUM, integration to showcase scalable RE up of proven investment MoAFW, Make in India, • Conduct feasibility studies technologies – both at farm gate technologies public and MoFAHD, PMKSY for different components and at scale. private MoHFW, MIDH of cold chain, in different finance, regions across the country MDBs/FIs • Assess feasibility of scaling Develop incubation center for up existing RE solutions research on low cost RE solutions (Ecozen, Inficold, Bharat for cold chain Refrigerations, etc.) • Support domestic R&D on decentralized RE-based cold chain solutions for both agriculture and healthcare Support R&D for development of Promote scale up of proven technologies through Knowledge, MoHFW, DST Make in India, domestic low-cost solutions for grants and loans investment Atmanirbhar last mile delivery of vaccines and public and Bharat Abhiyan temperature sensitive medicines private finance Support market growth of Support scale up/ manufacturing of low-cost alternate Policy, BEE, MoCI, DBT Make in super-efficient domestic and energy refrigerators developed, including providing investments, India, Energy commercial refrigeration support with marketing knowledge Conservation systems public finance Act, Atmanirbhar • Support target setting for (incentive/ Bharat Abhiyan market transformation/ adoption of energy efficient 138 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions Short Term (2022-24) Medium Term (2025-30) Long Term Instruments Key National & State (2031-38) Stakeholders Policy Alignment refrigeration systems subsidy/ • Create incentives for preferential consumers on higher procurement) efficiency refrigeration systems • Build public awareness on usage and operation efficiency, along with lifetime costs of higher efficiency refrigeration systems • Introduce retrofit/upcycle program for replacement of inefficient refrigeration systems • Support R&D for development of low-cost, alternate energy supply-based refrigerators for rural areas Initiate market transformation Create programs for giving Policy, BEE, MoCI, DST Make in program for driving incentives to upstream investments, India, Energy improvements in equipment manufacturers to reduce costs of knowledge Conservation efficiency (domestic refrigerators components such as BLDC fans public finance Act, Atmanirbhar and commercial deep freezers) (incentive/ Bharat Abhiyan Support R&D for domestic • Assess potential for upstream subsidy/ production of technologies not incentives, and explore preferential currently being produced in the synergies with initiatives procurement) country/cost of manufacturing under Make in India program is too high, e.g., energy-efficient (for refrigeration components heat exchanger technology, such as highly efficient super-efficient design technology compressors, fan motors, for small compressors and vacuum insulation panels, motors, insulation, etc. etc.) Climate Investment Opportunities in India’s Cooling Sector 139 Proposed Interventions Long Term Key National & State Medium Term Instrument Short Term(2022-24) (2031-38) Stakeholders Policy Alignment (2025-30) Introduce policy to support Support development of infrastructure needed to Policy, MoRTH, Automotive adoption of commercially scale up application of alternative clean cooling investment Ministry of Industry viable alternative clean cooling technologies across the country, e.g., development of National Power, MoFPI, Standard, FAME, technologies for refrigerated charging stations for PCM based reefer trucks Automotive MoAFW, NEMMP transport • Develop linkages with schemes (e.g., FAME II, Board, EESL MoFAHD, NEMPP2) that are developing charging stations for MoHFW, e-vehicles to also include infrastructure for reefers NCCD Design policy that incentivizes refrigerated transport service Make it mandatory Policy MoFPI, MoAFW, DAY-NRLM providers to increasingly move their fleets to electric and non-fossil to use electric and MoHFW, fuel-based cooling non-fossil fuel- MoRTH, based cooling in MoRD all refrigerated transport Develop linkages with Aajeevika Support pilot projects with self- Support scale Knowledge, MoFPI, MoAFW, Grameen Express Yojana that help groups/FPOs to develop up of successful investment MoHFW, supports development of public small-scale refrigerated public models, with public finance, MoRTH, MoRD transport links in rural areas, transport systems priority given to MDBs/FIs supporting movement of people remote regions and produce • Feasibility studies to assess possibility of developing refrigerated transport as a public transport/ sharing model • Develop business models for refrigerated transport as a public transport/ sharing model 140 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions Short Term (2022-24) Medium Term Long Term Instruments Key National & State (2025-30) (2031-38) Stakeholders Policy Alignment Support state-wise Support scale up of proven Knowledge, MoRTH, Ministry Make in India demonstration projects technologies in energy efficient investment of Power, to showcase use of new reefers through grants and private DST, research technology in reefer systems subsidies finance, institutes, MDBs/FIs private logistics companies Introduce low interest loans Investment MoRTH, Ministry Priority Sector on fuel free or electric reefer private of Power Lending, SMAM systems based on thermal finance, battery/PCM technology, etc. MDBs/FIs Develop multimodal cold chain Scale up development of green corridor/ better Investment Ministry of Kisan Rail, Green links through rail and highways, railway and highway linkages to other regions in the public finance Railways, Energy Corridor aiming at a fast-track green country MoRTH, MoAFW, corridor for perishables MNRE • Identify linkages with Kisan Rail scheme and Green Energy Corridor Project • Needs assessment to understand critical regions where development of refrigerated rail and highway links will have biggest advantage, in terms of both energy efficiency and reducing food loss • Prioritize regions with high production of perishables Climate Investment Opportunities in India’s Cooling Sector 141 Proposed Interventions National & State Key Long Term Instrument Policy Stakeholders Short Term (2022-24) Medium Term (2025-30) (2031-38) Alignment 1.2 Promote better operations and servicing through capacity building of all stakeholders, and incorporation of effective monitoring systems Incorporate IoT in cold chains Incentivize service providers and Introduce public and FSSAI, MoHFW, The Food Safety and refrigeration energy logistics owners to incorporate legislation/ private MoAFW, and Standards efficiency codes with minimum IoT-based monitoring in cold policy to make finance, MoFAHD, MoFPI, Act, 2006, reporting standards on efficiency supply chain and to adhere to temperature MDBs/ ICAR National Vaccine and O&M safety standards monitoring/ FIs Policy, Policy Promote use of IoT in cold- logging mandatory investment chain logistics (similar to eVIN) for perishable, for maintenance and remote vaccine and monitoring of temperature- medicine handling controlled refrigeration systems to adhere to standards -Support pilot demonstration projects for IoT implementation and reporting norms in different components of the cold chain Promote scale up of low-cost solutions for monitoring and reporting to increase energy efficiency and maintain safety standards Support research to understand Incorporate crop specific temperature and cooling temperature requirements into requirements of different crops food safety standards 142 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions National & State Key Long Term Instrument Policy Stakeholders Short Term (2022-24) Medium Term (2025-30) (2031-38) Alignment Develop and promote training Ensure successful implementation of Introduce Policy, MSDE, NCCD Skill India and certification courses for coldskill development program: universal knowledge Mission - PMKVY chain and refrigerator operators • Establish training centers/ centers mandatory and technicians on GSP of excellence across India and certification for all • Limited validity programs upgrade training centers technicians with regular license renewal • Promote online refresher every 2-3 years courses on new and upcoming technologies as skill enhancement support for technicians • Design programs for building customer awareness on need and benefits of hiring only certified technicians • Develop incentives for customers to engage certified technicians in early phase of certification Develop training/ awareness programs for: Ensure updating • Farmers, middlemen, traders, etc., on better post-harvest of training handling and management of produce modules • Medical staff, who handle vaccines and temperature-controlled • To be in line medicines, on optimal functioning of cold chain equipment with latest research and technologies • Carry out regular awareness programs Climate Investment Opportunities in India’s Cooling Sector 143 Proposed Interventions National & State Key Instrument Policy Long Term Stakeholders Short Term (2022-24) Medium Term (2025-30) Alignment (2031-38) 2. Improve energy efficiency and integrating RE in existing cold chain infrastructure, and strengthen systems 2.1 Retrofitting of existing static cold-chain infrastructure and refrigeration systems Develop specific program for Bring incentives for private Make retrofitting Policy, NCCD, MoFPI, PMKSY, MIHD, retrofitting of existing cold storages owners to retrofit of old cold investment MoAFW, NHM, CSISAC to improve efficiency and integrate • Enhance existing schemes storages public finance, MoHFW renewables for energy efficiency mandatory MDBs/FIs • Identify convergences with (CSISAC) to include existing ongoing programs retrofitting of existing cold • Develop guidelines that outline chain infrastructure requirements for retrofitting of • Develop awareness different cold chain infrastructure amongst owners on components energy savings achieved • Assign targets to state level with retrofitting horticulture departments for achieving retrofits • Develop guidelines for safe disposal of old and obsolete equipment, including provisions for enforcing EPR and e-waste guidelines 2.2 Developing standards and certification for RE integration, and inclusion of energy efficient design and technologies in cold chain and refrigeration Notify standards for energy efficient Create incentives for Make mandatory Policy BEE, NCCD, PMKSY, PM- design of cold chain infrastructure voluntary adoption of energy the inclusion of MoFPI, KUSUM, Capital and RE integration, along with efficient design standards, energy efficient MoAFW, Investment recommended efficient technologies: and RE integration design standards MoFAHD, MoHFW 144 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions National & Key Medium Term (2025- Long Term Instrument Stakeholders State Policy Short Term (2022-24) Alignment 30) (2031-38) • Enhance existing standards • Link with existing when constructing any new cold Subsidy Scheme for promoting adoption of schemes (Capital chain infrastructure components (NHB), MIDH, energy efficient technologies, Investment Subsidy NHM including RE technologies Scheme of NHB) that under “Guidelines & Minimum provide subsidies for System Standards for construction of cold Implementation in Cold-chain chain infrastructure Components” (published by to include incentives NCCD75) for adoption of • Integrate with guidelines energy efficiency outlined in “The Design design standards Guide Energy Efficiency and technologies, Improvements in Commercial and RE integration Buildings” by BEE, to include • Introduce low elements relevant for interest loans for development of cold chain energy efficient infrastructure design integration in cold chain Introduce dedicated credit lines Investment NCCD, Priority Sector for small-scale and large projects MDBs/FIs MoFPI, Lending, Make in integrating criteria for energy MoAFW India efficient cold chain design Develop an efficiency rating/ Bring in guidelines for Mandatory energy efficiency Policy, BEE, PMKSY, MIDH, certification system for measuring mandatory annual energy certification of all new cold chain knowledge NCCD, NHM, Make in energy efficiency in new and audits of cold chain components MoAFW India retrofitted cold chain infrastructure infrastructure to get • Certification linked to annual benefits of schemes and energy audits subsidies • Provide incentives for maintaining high energy efficiency rating Climate Investment Opportunities in India’s Cooling Sector 145 Proposed Interventions Key National & State Long Term Instrument Stakehold- Policy Medium Term ers Alignment Short Term (2022-24) (2031-38) (2025-30) Upgrade star rating for frost-free and Ensure regular upgradation of star rating Policy BEE Energy district cooling refrigerators every 2-3 Conservation Act, years S&L Program • Needs to follow pace of best available technologies in international markets to bring about energy efficiency improvements in appliances • Include multi-door and side-by- side refrigerators in mandatory star rating label Shift from voluntary BEE star rating Policy BEE Energy (2020) to mandatory star label for Conservation Act, commercial deep freezers and S&L Program chillers Design voluntary star ratings for other Shift from voluntary to Ensure regular commercial refrigeration technologies mandatory star labels upgradation of such as drinking water coolers, etc. star rating 146 Climate Investment Opportunities in India’s Cooling Sector Annex 4: Detailed Roadmap for Passenger Transport Air Conditioning Sector Note: Prioritized opportunity and its roadmap has been highlighted Proposed Interventions Key National & State Medium Term Long Term Instrument Stake- Policy Short Term (2022-24) holders Alignment (2025-30) (2031-38) 1. Improve efficiency of MAC systems in passenger transport vehicles 1.1 S&L for vehicles Implement and continuously improve the Develop more stringent Enforce targets Policy MoRTH CAFÉ a norms fuel efficiency standards for vehicles: targets of fuel efficiency for and periodically • Introduce Standard 2 of fuel efficiency 2026 and 2030 update the same norms for passenger cars in 2022-23 • Fast track implementation of fuel efficiency standards for passenger buses which will drive manufacturers to improve fuel efficiency. Per ICCT, 20-25% fuel reduction is possible by improving rolling resistance and auxiliary loads, optimizing driver behavior, improved engine and transmission efficiencies and reducing vehicle weight. Notify mandatory testing of all new Enforce amendment in testing methodology Policy MoRTH CAFÉ norms manufactured air-conditioned passenger cars effectively with air conditioner ‘ON’ condition to provide realistic fuel efficiency and emissions profile to encourage improved MAC efficiency. Revise testing methodology for CAFÉ standard compliance to include switching on of air conditioner while testing to give a more realistic fuel consumption scenario. Climate Investment Opportunities in India’s Cooling Sector 147 Proposed Interventions Key National & State Medium Term Long Term Instrument Stake- Policy Short Term (2022-24) holders Alignment (2025-30) (2031-38) Encourage compliance of revised CAFÉ Implement incentive mechanisms for Policy, MoRTH CAFÉ norms standard by: manufacturers to adopt efficient MAC systems investment • Developing an incentive mechanism (carbon (such as a certification and trading finance) system) for manufacturers to increase compliance with CAFÉ standards and promote usage of energy efficient MAC system. • Designing a carbon finance program to support compliance Introduce a labelling system for cars to build Introduce and periodically update labels for cars Policy MoRTH, S&L program public awareness on energy efficiency of BEE vehicles. Explore incorporation of emission intensity in the label by integrating low-GWP refrigerants into the equation 1.2 R&D and commercialization of efficient MAC systems Support R&D to improve energy efficiency Policies to support adoption of energy efficiency Knowledge, DST, FAME Scheme of air conditioners in hybrid and electric and low-GWP refrigerant-based MAC systems in policy Ministry vehicles and reduce battery energy hybrid and electric vehicles of Heavy consumption. Energy consumption by Industries, batteries for AC purposes in e-vehicles R&D is a major issue, especially in hot climate institutes, countries such as India. Air conditioners in electric e-vehicles tend to consume up to 40% of vehicle battery energy manufa- cturers 148 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions Key National & State Medium Term Long Term Instrument Stake- Policy Short Term (2022-24) holders Alignment (2025-30) (2031-38) Develop a program which encourages Create incentives and policy guidance to Knowledge, DST, Mission private sector R&D on technologies that support commercialization/scale up of proven policy MoRTH, Innovation have high energy efficiency and use low- technologies, particularly those which have manufa- GWP refrigerants. application in public transportation systems cturers 2. Optimize demand for transport air conditioning 2.1 Modal shift to public transportation Develop guidelines for appropriate thermal Build integrated and high-quality public transport Policy MoRTH Atal Mission for comfort and heat stress management systems to shift passenger traffic from private Rejuvenation approaches in public transport systems, vehicles and Urban particularly for vehicle operators in cities Transformation with higher ambient temperature climates – Public and prone to heat waves Transportation National Mission on Sustainable Habitat Smart Cities Mission, 2015 Green Urban Mobility Scheme, 2017 Metro Rail Policy 2017 National E-Mobility Program, 2018 Climate Investment Opportunities in India’s Cooling Sector 149 Proposed Interventions Key National & State Medium Term Long Term Instrument Stake- Policy Short Term (2022-24) holders Alignment (2025-30) (2031-38) 2.2 Load reduction Develop vehicle design specifications/ Implement and periodically update vehicle Policy MoRTH, guidelines which support load reduction design specifications based on latest technology MoHUA through: (a) improving ventilation/insulation developments of vehicles; and (b) using targeted cooling that directly cools a passenger without having to cool the entire vehicle. Combined, the two strategies can reduce air conditioner energy consumption by 22- 31%, depending on the climate123 CSISAC: Central Sector Integrated Scheme on Agricultural Cooperation 150 Climate Investment Opportunities in India’s Cooling Sector Annex 5: Detailed Roadmap for Refrigerants Note: Prioritized opportunity and its roadmap has been highlighted Proposed Interventions National & State Long Term Key Instrument Policy Short Term (2022-24) Medium Term (2025-30) (2031-38) Stakeholders Alignment 1. Support HFC phase down through roadmaps, policies and public procurement 1.1 Roadmaps, standards and guidelines for low-GWP refrigerants Develop India’s KIP. The Gov- Support implementation of India’s Conduct periodic mon- Policy MoEFCC, India’s ratifica- ernment of India has announced KIP by: itoring and evaluation MoCI, MoFPI, tion of Kigali that a 'National strategy for • Developing technology of the implementation MoAFW, Mo- Amendment to phase down of Hydrofluoro- roadmaps combined with of India’s KIP HUA, MoUD, the Montreal carbons' is to be developed by modelling phasedown MoRTH Protocol 2023 requirements • Amending Ozone Depleting Develop safety standards and Substances (Regulation and Policy BIS, Standards by BIS appropriate building codes for Control) Rules 2000 and its BEE (for safety) and flammable and toxic refrigerants amendment to align with Kigali BEE (for building across all sectors. In line with Amendment to the Montreal code) this, develop safety regulations Protocol particularly for ammonia-based • Introducing a licensing system cooling and ensure its strict for controlling the import and implementation in industrial export of HFCs process cooling and cold chain Implement and update safety stan- as ammonia is cost effective and dards building codes periodically to zero GWP refrigerant with abun- reflect latest developments in low- dant usage in India. GWP refrigerants Climate Investment Opportunities in India’s Cooling Sector 151 Proposed Interventions National & State Long Term Key Instrument Policy Short Term (2022-24) Medium Term (2025-30) (2031-38) Stakeholders Alignment Promote adoption of low-GWP Policy MoEFCC, BEE, Mission refrigerants and technologies BIS Innovation, with lower refrigerant demand Start-up India (i.e., clean technologies) by: i) Creating a rating system to provide preference to low-GWP refrigerants and clean technolo- gies in codes and standards. ii) Supporting pilots to demon- strate performance and viability 1.2 Incentives for adoption of low-GWP refrigerants Conduct assessment and indus- Introduce regulatory Policy MoEFCC, MoCI India’s ratifica- try-wise dialogs to design prag- mechanisms for HFC tion of Kigali matic regulations for HFC phase phase down which Amendment to down across each sector. The consider sector-spe- the Montreal assessment should explore the cific technology Protocol feasibility of various regulatory access and econom- options such as quota/cap and ic viability aspects. phase-down, tax and refund, lim- These should be its on GWPs and incentives for aligned to support low-GWP products, environmen- achievement of In- tal cess, subsidies for using low dia’s KIP GWP refrigerants and products 152 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions Key National & State Policy Long Term Instrument Medium Term Stakeholders Alignment Short Term (2022-24) (2031-38) (2025-30) Expanding the 'green category', Policy MoCI GeM currently assigned only for RACs, to all refrigerant based products under GeM portal Mandating the procurement of refrig- Policy Ministry of General Financial Rules eration and air-conditioning products Finance, state with low-GWP refrigerants in govern- governments ment offices 2. Promote domestic R&D and indigenous production of low-GWP refrigerants 2.1 Research & Development of low-GWP refrigerants Establish a domestic R&D program Create business Knowledge DST; MoEFCC; Mission Innovation, by: models and value prominent R&D Start-Up India • Instituting a government chain development institutes such operated steering committee for commercialization as CSIR-IICT, with representation from relevant of low-GWP IITs, IISC, and ministries, R&D institutes, experts alternatives identified NITs; MoCI and private sector companies to through indigenous identify and map the knowledge, R&D expertise and capabilities Support new Support further Knowledge, DST, MoEFCC, Mission Innovation available both in terms of molecule research, development and policy prominent R&D manpower and lab facilities, while possibly from two deployment of new institutes such developing a R&D roadmap for R&D institutions molecule research: as CSIR-IICT, low-GWP refrigerants with clear review • Review molecule IITs, IISC, and • Operationalizing an R&D program mechanism and research and, NITs to identify and pilot test low incentives for application lab GWP alternative and natural corporates for effectiveness refrigerants which are Climate Investment Opportunities in India’s Cooling Sector 153 Proposed Interventions Key National & State Policy Long Term Instrument Medium Term Stakeholders Alignment Short Term (2022-24) (2031-38) (2025-30) suited to the Indian market needs molecule research • effectiveness prog- and ambient conditions while ress and further ensuring achievement of safety strengthening of standards and energy efficiency infrastructure • Review regulatory/ policy framework for launching the newly developed molecules 2.2 Indigenous production of low-GWP refrigerants Support indigenous production of Develop low-GWP • Support Policy, MoEFCC, MoCI, Make in India hydrocarbon (R600A and R290) alternative production commercial scale investment MDBs, FIs refrigerants process and setting production of HFOs (private up of production • Demonstration of finance) facility for them bench and pilot which are based on production of indigenous R&D newly developed molecules based on indigenous R&D Develop knowledge/training Knowledge MoEFCC, MSDE Skill India Mission - centers for enhancing capabilities of PMKVY refrigerant manufacturers for energy- efficient and low-GWP refrigerants 154 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions Key National & Long Term Instrument Stakeh- State Policy Short Term (2022-24) Medium Term (2025-30) (2031-38) olders Alignment 3. Improve servicing, maintenance and disposal to reduce refrigerant demand 3.1 Proper servicing and maintenance of refrigerant-based equipment to reduce refrigerant leakage Design a program to support skilling of Ensure successful Introduce Policy, MSDE, Skill India technicians and supporting their employment by: implementation of the skill universal knowledge MoEFCC, Mission - i) Designing training and certification programs development program of mandatory MoHUA, PMKVY for service technicians on GSP across sectors technicians by: certifications for MoCI, to better manage and reduce refrigerant losses i) Establishing training all technicians MoFPI, during recharge and end-of-life. Amongst centers/centers of MoRTH sectors, priority should be given to RAC sector excellence across India which has tremendous market share and growth and upgradation of training potential. MoEFCC recently released the book centers on ‘Good Servicing Practices for Energy Efficient ii) Promoting online refresher Operations of Room Air Conditioners’ which training courses on new and should be taken forward through dedicated upcoming technologies as training programs skill enhancement support ii) Conducting a state-wise assessment of the for technicians demand and availability of trained service iii) Designing programs to technicians as well as availability and quality of build customer awareness training institutions on the need and benefits iii) Conducting dialog with industry to encourage of hiring only certified participation in training delivery and seeking its technicians commitment to employ a fixed number of trained iv)Developing a system to candidates mandate the hiring of only iv) Operationalizing central voluntary certification certified technicians by large scheme through a single government entity facilities under a single framework Climate Investment Opportunities in India’s Cooling Sector 155 Proposed Interventions National & Key Long Term Instrument State Policy Stakeholders Short Term (2022-24) Medium Term (2025-30) (2031-38) Alignment Listing of empaneled certified or ITI-trained Policy MoCI GeM servicing personnel on GeM portal to ensure competitive cost and reliable servicing for zero ozone-depleting substances /lower GWP products. 3.2 Recovery, recycling and reclamation of refrigerants Design policy and training program to support Policy MSDE, MoEF- Skill India the recovery, recycling and reclamation or CC, Sector Mission - effective destruction of refrigerants Skill Councils PMKVY Introduce subsidies to bring down cost of Policy, MoEFCC, recovery equipment investment MDBs, FIs, (public/ private com- private panies finance) Support infrastructure development and Policy, MoEFCC, incentivize recycling and reclamation of investment MDBs, FIs, refrigerants and for safe and effective end-of-life (public/ Private Com- management of gases private panies finance) • Training of technicians to support recovery Policy MSDE, Skill India and transport of refrigerants to reclamation MoEFCC, Mission centers Sector Skill -PMKVY • Mandate public sector to utilize licensed Councils service technicians only 156 Climate Investment Opportunities in India’s Cooling Sector Proposed Interventions National & Key Long Term Instrument State Policy Stakeholders Short Term (2022-24) Medium Term (2025-30) (2031-38) Alignment Embed refrigerant disposal guidelines within Policy MoEFCC EPR and existing regulatory mechanisms of end-of- e-waste life disposal of RACs, i.e., EPR and e-waste guidelines guidelines for reclaiming electronic components at end of life CSIR-IICT: Council of Scientific and Industrial Research Indian Institute of Chemical Technology; IIT: Indian Institute of Technology; IISC: Indian Institute of Science; NIT: National Institute of Technology Climate Investment Opportunities in India’s Cooling Sector 157 158 Climate Investment Opportunities in India’s Cooling Sector Climate Investment Opportunities in India’s Cooling Sector 159 Designed by: 160 Climate Investment Opportunities in India’s Cooling Sector