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Outlook Brief: Investment Estimates for Industrial Air Pollution Control in India

Air pollution in India is a prevalent threat to human health and has a significant dampening impact on national economic productivity and growth as well. This brief examines the state of industrial pollution control in India. Source apportionment studies conducted in major urban centres reveal industrial activity and thermal power generation to be significant contributors to particulate matter pollution. Waste incineration which includes waste processing units and waste to energy plants are also responsible for elevated levels of particulate matter, especially PM2.5 and PM10 in Indian cities. A mapping of existing continuous air quality monitoring stations in the country reveals limited monitoring coverage of industrial units. Under the National Clean Air Programme (NCAP) setting up of additional continuous air quality monitoring stations across the country is expected to bring within its purview a much larger number of large and small industrial units driving compliance to national emission standards.

This brief also estimates the investment on air pollution control equipment (APCE) in India by large industrial units (PAT signatories), as well as, small units belonging to four of the largest MSME sectors, and waste management units using incineration to process waste or convert it to electricity.

Investment analysis shows that a few key sectors like thermal power, cement, and iron & steel undertake more than 90% of all capital expenditure on air pollution control; this CAPEX is also a larger percentage of total CAPEX Of the unit for these industries. Currently, large industrial units in India spend between USD 2.7 billion and USD 4.03 billion each year on APCE systems. On the other hand, capital investment on air pollution in the MSME and waste management sector is marginal compared to heavy industry – between USD 42 million and USD 104 million annually. This reveals that, although widespread across the country and prominent emitters of hazardous particulate matter, medium and small industrial units undertake less than 1% of total industrial investment on APCE, and allocate negligible capital budgets for air pollution control.

However, with the global market for air pollution control systems expected to grow significantly at a CAGR of 5.1% in the coming years, national impetus in the form of NCAP driving tighter emission monitoring and control standards, industries in India are expected to receive a greater push to invest in air pollution control equipment to comply with stricter air quality norms. 

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Author: Mugdha Malik