India - Environmental Technology India - Environmental Technology
Overview
India is grappling with significant challenges in air, water and waste management. The legislative framework is strong, but enforcement is relatively weak. Half of world's 20 most polluted cities are in India, according to World Health Organization’s Global Urban Ambient Air Pollution 2016 database. About 62 million tons of municipal solid waste is generated each year in the 468 cities of over 100,000 people; only 70 percent is collected and only 23 percent is processed or treated. While 94 percent of Indians have access to drinking water, just under 40 percent of the population has access to sanitary wastewater system- a disparity that emphasizes the dire need for wastewater treatment systems. Almost 63 percent of municipal wastewater and 40 percent of industrial wastewater is left untreated and discharged. India is also one of the largest and fastest growing greenhouse gas emitters. On the industrial pollution front, 30-40 percent of India’s industrial units produce sizeable quantities of pollutants. There are about 3 million small-scale enterprises in the country and most of these are using minimal or no pollution control equipment. The Government of India has classified 60 industry categories as highly polluting; these sectors are subject to stringent standards. The Indian Parliament passed the National Green Tribunal Act in 2010, which led to the creation of the National Green Tribunal. Its purpose is the effective and expeditious disposal of cases relating to environmental protection. Orders of the Green Tribunal are driving many of the recent environment management initiatives.
Important environmental sub-sectors include: drinking water supply; waste water treatment; municipal solid waste management; industrial hazardous waste management; industrial air pollution; pollution monitoring equipment and services; and carbon abatement technologies.
The Indian pollution control industry consists of a large number of specialized equipment suppliers, chemical suppliers, engineering-procurement-construction (EPC) contractors, consultants, build-own-operate and transfer (BOOT)/build-own-operate (BOO) operators, analytical equipment and services companies. The equipment market is dominated by small and medium-sized units, manufacturing end-of-pipe treatment solutions. Major suppliers of high-end pollution abatement technology are from the United States, Germany, China, South Korea, and Japan. Most of the leading international original equipment manufacturing companies operate in India.
Market barriers for export of environmental technologies and services to India include:
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High tariff - particularly in area of monitoring and instrumentation
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Fragmentation of the market across region - making it difficult to find an agent or a representative that can truly provide national coverage
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Price sensitivity in tender - lowest bidder mentality with little assessment of cost/quality trade-offs
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Risk averse municipal government buyers, which dominate drinking water, wastewater, waste management, and other sectors, have limited technology-assessment and project management capacity
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Limited sophistication of local partners- many of the Indian companies are relatively new to the sector and may not have adequate experience developing and implementing the projects
India’s environmental technologies market is valued at $23.22 billion, including goods and services. Increasingly, service exports are overtaking manufactured goods due to technology licensing, engineering contracts, consultancy work, etc. As the technologies themselves become more complex, it is difficult to track exact trade figures, but growth trends can be noted by a proxy of key goods in the air, water, and waste management sub-sectors being imported by India to meet sharply increasing demand, though it is noteworthy that the market is split between the municipal government buyers which provide community environmental services, and private sector.
Units: $ millions
|
Environmental Technology Equipment |
2016 |
2017 |
2018 |
2019 Est. |
|
Total India Imports |
594 |
690 |
829 |
996 |
|
Imports from U.S. |
98 |
103 |
155 |
199 |
|
U.S. Share of Imports |
16.47% |
14.85% |
18.70% |
20% |
Source: Global Trade Atlas (HTS 842121, 842139, 842199, 902710)Units: $ million'
Leading Sub-Sectors
Promising sub-sectors in pollution control equipment include:
Sub Sector Projected Growth Rate
Water and wastewater management 15-20%
Air pollution control 10-20%
Municipal solid waste management 6-8%
Water and wastewater are the most promising sub-sector in India’s environmental segment. This accounts for 26 percent of India’s environmental technologies industry and is expected to grow at 15-20 percent every year over the next five years. The government, mostly local government with construction funding from state and central government agencies, is primarily involved in the treatment of raw water, water transmission and distribution, wastewater collection and sewage treatment and disposal operations. The private sector industries in power, food and beverage, chemicals, pharmaceuticals, refineries and textiles sectors are generating immense opportunities for water and wastewater treatment equipment. These industries prefer advanced treatment technological systems such as reverse osmosis membranes for treating their wastewater. The water treatment market is gradually shifting from chemical treatment and demineralization plants to membrane technology. The concept of wastewater recycling and zero discharge systems is becoming more widely accepted as new technologies such as sequencing batch reactor (SBR) and membrane bioreactor (MBR) based treatment gain in popularity. Government of India has committed significant funds for upgrading the infrastructure of cities and towns, to include upgrading water supply and wastewater treatment systems. However, government entities remain risk averse in exploring and adopting new environmental technologies.
Coal fired thermal power plants offer significant opportunities air pollution control equipment. About 58 percent of the installed power generation capacity is fueled by coal. India’s Ministry of Environment, Forests & Climate Change in December 2015 notified changes related & relevant to thermal power plants under the Environment (Protection) Amendment Rule, 2015, targeting significant reduction of particulate matter (PM), sulfur oxide (SOx), nitrogen oxides (NOx), mercury emission and freshwater withdrawal in the order of 60-80 percent. Based on this, India’s Ministry of Power, as per latest action plan dated October 13, 2017, has set the following roadmap for various pollutant categories in 650 power plants of India, comprising 196,667 Mega Watt (MW) of installed capacity:
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SOX- Flue Gas Desulfurization (FGD) units will be installed in 414 plants by 2022, covering 161,522 MW capacity. Remaining 235 plants are either complying with SOx norms or are planned for phase-out.
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PM- 222 plants will need to install/upgrade Electrostatic Precipitator to achieve PM norms. This entails capacity of 161,402 MW.
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NOx- pre-combustion modifications in boiler, installation of low NOx burners, over fire air along with installation of Selective Catalytic/Non-Catalytic Reduction technology (SCR/SNCR) systems (no concrete roadmap seen)
India’s Central Pollution Control Board (CPCB) has issued directions on December 11, 2017 to thermal power plants to ensure compliance as per the revised plan, by 2022. Overall 160,000 MW of thermal power capacity is slated to be linked to FGD systems. The mandated timeframe of 4 years appears unrealistic; a more realistic timeframe is 7 years. Indian utilities will spend $8.5 billion on installation of FGD systems over this 7-year timeframe. About 55,000 MW capacity is owned by National Thermal Power Corporation (NTPC); and the organization is on track by having floated FGD tenders for about 25,000 MW capacity already. Another 80,000 MW capacity is owned by State Electricity Boards, which are financially weak and are unlikely to meet the stipulated timeframe. The Independent Power Producers own about 30,000 MW capacity and are capable of installing FGD systems but are moving slow as their financials are based on old tariff structures which do not factor capital required for pollution abatement stipulated recently.
Municipal Solid Waste (Management & Handling) Rules, 2016 contains new standards for composition of compost, treatment of leachates, emissions from incineration, and criteria for waste treatment facilities and landfills. Coupled with focus of the new regulation on waste to energy and funding available from Government of India for upgradation of cities, it presents renewed opportunities for U.S. waste management equipment and service companies. This sector is dominated by municipal governments, which often have limited financial resources as well as governance, technical, and personnel capacity to implement and operate such projects. Waste solutions are often met with resistance from community and environmental groups.
Opportunities
On May 31, 2019, Prime Minister Narendra Modi's government launched a new ministry called the "Jal Shakti" to bring all the water-related works under one ministry to provide safe drinking water to the people of India. The new Jal Shakti Ministry has been created by reorganizing and merging the earlier Ministry of Water Resources, River Development and Ganga Rejuvenation, and the Ministry of Drinking Water and Sanitation. The Jal Shakti Ministry will cover issues ranging from international and inter-states water disputes, to the Clean Ganga project - which is a flagship initiative to clean the river, its tributaries and sub-tributaries. This merger will ensure a holistic approach to the issue of water management and ensure better coordination of efforts and would help in expeditiously taking forward the program for linking rivers from different parts of the country and ensure a solution to drinking and irrigation water shortages.
The Government of India has allocated $250 million to National Mission for Clean Ganga (NMCG) since 2015, out of which $156 million was provided to state-level agencies and executing agencies for development of the Ganga River in 2017. The NMGC funded projects will continue to be a major opportunity for municipal water projects. So far, 267 projects have been funded, out of which, 82 projects have been completed.
The Ministry of Water Resources, Government of India formulated a policy for Public Private Partnership (PPP) projects in the municipal wastewater sector through an innovative hybrid annuity model under the Namami Gange (Clean Ganga) Program. Two most successful categories of PPPs in India are the Build, Operate and Transfer - End-User (in which the end user or consumer itself is the private operator, hence owns and takes responsibility for the project) and the Design, Build, Operate Model (DBO). In the latter, the urban local body funds the capital costs for the project and uses the private sector to bring in technology and managerial skills to operate and maintain the assets for a period of 5 to 10 years. The construction, technology and operating risks are borne by the private sector operator while the financing risk is borne by the government counterpart.
In April 2015, the Government of India rolled out the Smart Cities Mission - a $1 trillion urban sector plan to create 100 “Smart Cities” and rejuvenate 500 other cities and towns over the next five years. Clean water supply, sanitation and waste management, efficient mobility, and public transport are important components of this new initiative. So far, a total investment of $28 billion has been proposed by the 90 cities under their smart city plans. The implementation of the Smart Cities Mission is done by a Special Purpose Vehicle (SPV) to be set up at city level in the form of a limited liability company. Seventy-seven Smart Cities have established their SPVs and 2855 projects worth $20 billion are in various stages of implementation. U.S. companies should position themselves and create local partnerships to take advantage of these opportunities.
We advise U.S. companies to also monitor the U.N. Development Business, World Bank, Asian Development Bank (ADB), the Japan Bank for International Cooperation (JBIC) websites and publications for soft loan and grant funded project announcements. These projects offer significant front-end consulting opportunities and the possibility to supply equipment during the project implementation phase.
For more information about opportunities in this sector contact U.S. Commercial Service Industry Specialist: Arup Kumar Mitra at Arup.Mitra@trade.gov
Web Resources
Ministry of Urban Development http://mohua.gov.in/
Smart Cities project http://smartcities.gov.in/
National Mission for Clean Ganga http://nmcg.nic.in/
Central Pollution Control Board http://www.cpcb.nic.in/
Environmental Information System – ENVIS India http://envis.nic.in/
National Mission for Clean Ganga: http://nmcg.nic.in/
Atal Mission for Rejuvenation & Urban Transformation (AMRUT) http://amrut.gov.in
JICA http://www.jica.go.jp/india/english/
USAID http://www.usaid.gov/india
U.N. Development Business tenders http://www.devbusiness.com/
World Bank projects http://www.worldbank.org/projects/
Asian Development Bank’s Country Partnership Strategy for India- 2018-2022: https://www.adb.org/documents/india-country-partnership-strategy-2018-2022