A Responsible Clean-Energy Transition for India

Backdrop

Countries’ pathways to achieve their net-zero targets hinge on the progressive deployment of decarbonisation technologies. India is accelerating this transition through policy instruments, such as the Production-linked Incentive (PLI) schemes and National Critical Mineral Mission, to scale up advanced clean-energy manufacturing, promote domestic deployment, and secure the supply chain needed to support these technologies (Appendix 1). As demand for low-carbon technologies increases, industries, even traditional fossil fuel players like Coal India, are either seeking to green their operations or foraying into critical minerals, with initial interests in battery metals.[1] India’s total installed non-fossil capacity of approximately 275 GW (solar: 147 GW; wind: 55 GW) reflects this momentum and indicates steady progress towards its ambitious 500 GW non-fossil-fuel target by 2030.[2]

However, while the adoption and expansion of low-carbon technologies reduce carbon footprints, their supply chains and life cycles are embedded with significant environmental, social, and governance (ESG) risks that remain largely unaddressed. Instances of child labour in Congo’s artisanal cobalt mining to feed the EV batteries, land conflicts to set up a solar park, or closure of an important copper smelter in India due to environmental non-compliance raise serious ethical concerns, challenging the integrity of clean-energy value chains.[3][4] Moreover, these supply chains are fragmented across geographies, which makes the compliance process quite complex. Hence, regulations in major markets like the EU and the USA make it harder for countries with lax environmental regulations to establish long-term trade relations and investment flows, ultimately leading to the loss of market access in those countries.

In this context, India must re-examine its energy transition pathway. This blog identifies key sustainability risks and challenges and offers plausible recommendations for a responsible, ethical transition.

Among the myriads of challenges that renewable energy (RE) technologies face, such as scaling while innovating, high upfront costs, market penetration and supply chain vulnerabilities, what often remains less discussed are their embedded lifecycle emissions, environmental and socio-economic costs.

Growing Adoption of Sustainability Safeguards        

Major markets are introducing sustainability principles to ensure clean, responsible supply chains. The EU’s carbon border adjustment mechanism (CBAM) imposes higher carbon pricing on carbon-intensive exports from developing countries when they enter the EU market.[5] Earlier, the EU’s 2017 Conflict Minerals Regulation prevented the import of minerals linked to human rights conflicts, reinforcing responsible sourcing. Its ‘Battery Passport’ enables lifecycle traceability from raw material sourcing and manufacturing to recycling by documenting recycled content, end-of-life management, and supply chain due diligence.[6]

India is also moving in a similar direction. The recently proposed ‘Battery Pack Aadhaar System’ aims to track and trace battery chemistry as a constructive step within evolving battery policies. Furthering Scope 3 reporting, the updated Business Responsibility and Sustainability Reporting (BRSR) requires Indian-listed companies to disclose the ESG performance of their top value-chain partners as well.[7] Driven by investors, consumers, market, and international scrutiny from UN bodies, global NGOs, and watchdogs, several countries and companies across the world are progressively adopting sustainability through mandatory regulatory frameworks and voluntary measures.

India’s Sustainability Risks and Challenges

Among the myriads of challenges that renewable energy (RE) technologies face, such as scaling while innovating, high upfront costs, market penetration and supply chain vulnerabilities, what often remains less discussed are their embedded lifecycle emissions, environmental and socio-economic costs.

Embedded Emission

Every RE technology carries embedded emissions across its supply chain, from raw material extraction and processing to manufacturing, logistics, and transport. These value-chain emissions are harder for firms to measure and mitigate than their direct Scope 1 and 2 emissions. Most clean-energy technologies largely rely on minerals, which are inherently extractive and carbon-intensive. Electricity from coal-heavy grids used to power these amplifies carbon intensity. For example, in India, producing one tonne of aluminium can emit 20.88 tonnes of CO₂[8]. Although EVs have zero tailpipe emissions, manufacturing an average EV battery alone can emit up to 100 CO2e/kWh.[9]

Land and Community Conflicts

Utility-scale solar and wind projects require vast tracts of land, which can disrupt habitats and lead to conflicts over shared resources with communities, farmers, and pastoralists. Conflicts usually arise from the loss of access to common grazing lands that support local socio-economic and cultural sustenance. Inadequate consultation with affected communities often escalates disputes, leading to project delays or operational disruptions. Ambiguous land titles and tenurial records of the common lands, which are often construed as “wasteland” in government records, add to the challenge. Even when land transfers are legally approved, RE developers face serious on-ground challenges. Ecological sensitivities further complicate deployment, as seen in Rajasthan and Gujarat, where the critically endangered Great Indian Bustard is frequently killed in collisions with overhead transmission lines from renewable projects, prompting Supreme Court interventions.[10]

Traceability in Raw Materials Sourcing

India largely imports solar cells, wafers, ingots, and lithium-ion batteries, exposing its clean-energy transition to upstream ESG risks in source countries. Nickel, cobalt, lithium, and copper mining often occur in regions with weak regulatory oversight and poor environmental governance. For example, Congo produces 70% of the world’s cobalt, but artisanal cobalt mining here is marred with child labour, unsafe/unregulated working conditions, and human rights violations. Similarly, the South American lithium triangle, spanning Argentina, Bolivia, and Chile, threatens indigenous communities. China, the world’s processing hub, has also faced allegations of human rights violations, including minority workers working in harsh conditions in polysilicon factories in Xinjiang.[11]

These create serious ethical dilemmas for businesses and consumers while making procurement decisions from those regions. In the absence of reliable traceability standards, tracing domestic sourcing becomes difficult as well. Moreover, not all the RE manufacturers have the capacity to always prioritise sustainable procurement over economically viable operations. Tracing a mine in the Congo to a gigafactory in Nevada and eventually to end markets in India is opaque, making claims of a clean, ethical supply chain difficult to verify.

Recycling Challenges and Circularity Gaps

The International Renewable Energy Agency projects that PV panels alone could generate approximately 78 million tonnes of waste by 2050, which could bring USD 15 billion worth of recovered material back into the economy.[12] India alone could generate over 200 kilotons of cumulative solar waste by 2030.[13]  However, current technologies are primarily designed for performance optimisation rather than recycling and metal recovery. For example, solar panels or wind turbine blades are made of a complex blend of glass, silicon, aluminium, polymers, and hard-to-separate composite plastic.[14] Driven by Extended Producer Responsibility (EPR), sectors such as batteries, e-waste, and plastics in India have made significant progress in recycling, with increasing industry participation. However, recycling is still a challenge across other RE spaces. The absence of state-of-the-art technologies results in low metal recovery from scrap, and weak governance and incentives often lead to scrap ending up in landfills.

In some cases, recycling costs per PV module are much higher than usual discarding, discouraging material recovery.[15] Recycling processes such as pyrolysis and incineration are not only energy-intensive but also hazardous, exposing workers to toxic chemicals and metals, like lead and mercury. In India, where a large share of the recycling ecosystem is informal and unregulated, with poor safety oversight, the situation worsens.

Concluding Remarks

Sustainability is increasingly becoming a competitive edge for businesses worldwide, rather than a compliance checklist. However, to ensure the credibility of the clean-energy supply chain, sustainability principles must be tailored to country-specific sectoral dynamics. In India, mid- and small-scale players account for a large share of the clean-energy value chain; however, they often fall outside regulatory reporting mechanisms. Thus, the challenge lies in holistically integrating them into existing frameworks without adding yet another procedural compliance.

In addition, RE technologies are developing at different timelines, creating asymmetric sustainability risks. Solar panels and wind turbines installed in India during the 2000s are soon to reach the decommissioning or repurposing stage, necessitating a supportive policy environment. India, therefore, requires stronger institutional capacity and coordination among regulators, such as the Pollution Control Boards, the Indian Bureau of Mines, and the National Green Tribunal, and their respective state-level arms.

In this context, the following recommendations aim to make the process as clean as the products.

Unlocking the enormous potential of scraps requires well-developed recycling infrastructure, policy incentives, and tax reforms to make recycled materials more economically appealing than virgin materials. While ambitious recycling targets in the forthcoming EPR regulations on non-ferrous metals are a right step, the scope must also be expanded to include the recycling input rate, which measures how much recycled material re-enters the economy, as a useful indicator of substitutability.

Emphasis on Supply Chain Traceability

The discussion should move beyond the adoption of clean energy products to scrutinising the underlying processes, with greater focus on supply-chain traceability, due diligence, and lifecycle emissions. International good practices such as the EU’s Product Environmental Footprint under the European Green Deal or the Solar Stewardship Initiative, which assesses end-to-end traceability and lifecycle impacts through independent audits, offer useful reference points. In India, linking BRSR reporting to ethical sourcing of raw materials, as well as human rights and labour practices, could provide strong policy impetus for systemic improvements.

Advancing Circular Economy

India’s journey towards a circular economy depends on how well it values what it discards. Unlocking the enormous potential of scraps requires well-developed recycling infrastructure, policy incentives, and tax reforms to make recycled materials more economically appealing than virgin materials. While ambitious recycling targets in the forthcoming EPR regulations on non-ferrous metals are a right step, the scope must also be expanded to include the recycling input rate, which measures how much recycled material re-enters the economy, as a useful indicator of substitutability. Products should be designed to maximise resource recovery and recyclability at the end of life. Integrating the informal recycling supply chain into a well-regulated framework with robust safety measures can deliver both environmental benefits and fiscal gains.

The next phase must move beyond just community consultation and compensation to enable communities to become co-creators and beneficiaries of the value added by RE.

Community Engagement and Benefit Sharing

Community engagement in development projects is taking shape, but largely in fragments. In Distributed Renewable Energy, while local people can benefit from localised power generation, a cohesive and structured framework is lacking. The next phase must move beyond just community consultation and compensation to enable communities to become co-creators and beneficiaries of the value added by RE. District Mineral Foundations, which mitigate the adverse impacts of mining, have worked well in areas where they have been implemented and monitored effectively. Similar models for benefits, revenue, or equity sharing through public–private–community partnerships can be considered within the RE spectrum to ensure a just energy transition.

Author Note: The author would like to thank Rajesh Chadha, Senior Fellow, CSEP and Karthik Bansal, Associate Fellow, CSEP, for their valuable feedback.