PLI Should Be Extended To Agri-Based Manufacturers: ICRIER

The latest Indian Council for Research on International Economic Relations (ICRIER), report called for extending India’s production-linked incentive (PLI) scheme—currently supporting domestic solar panel manufacturing—to include low-carbon agricultural technologies. These could include livestock feed additives that reduce methane emissions (such as Rumen8) and biofertiliser products, the report added.

India’s agriculture sector is vulnerable to climate change impacts such as temperature shifts, erratic rainfall, drought, and solar radiation variability. Strengthening resilience through energy and emissions reforms, the report said, could help turn climate shocks into long-term opportunities.

India’s agriculture sector consumed 240.8 billion units (BU) of electricity in 2022-23, accounting for 17.2% of the country’s total power consumption of 1,403.4 BU, according to a new study by the Indian Council for Research on International Economic Relations (ICRIER), citing data from the Central Electricity Regulatory Commission.

The report found, “This level of electricity use translated into 178.9 million tonnes (Mt) of carbon dioxide equivalent (CO₂e) emissions. Maharashtra (29.7 Mt) and Rajasthan (23.6 Mt) had the highest absolute emissions, while Telangana recorded the highest emissions per hectare at 1,958 kg CO₂e.”

Decarbonizing Agricultural Electricity With Solar

The report said decarbonising agricultural electricity use is key to reducing emissions and easing financial pressure on loss-making power distribution companies (DISCOMs). It advocated for scaling up solar irrigation under the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme, which targets 10 gigawatts (GW) of solar capacity in the sector.

The programme includes the installation of small solar power plants of up to 2 megawatts (MW) on agricultural land, 2 million standalone solar pumps for off-grid areas, and solarisation of 1.5 million grid-connected irrigation pumps.

“These emissions can be mitigated by replacing diesel and electric pumps with solar alternatives, though this could lead to overexploitation of groundwater,” the report warned.

Replacing Conventional Pumps With Solar-Powered Ones.

Agriculture contributes significantly to methane and nitrous oxide emissions due to practices such as livestock rearing and fertiliser use. The report estimates that 130-150 Mt CO₂e can be mitigated from the agriculture sector—about 85 Mt through better methane and nitrous oxide management and another 45-60 Mt by replacing conventional pumps with solar-powered ones. The report also recommends aligning various government schemes—such as those promoting natural, regenerative, and organic farming—with solarisation efforts to create synergies and increase participation in carbon credit markets.

Minimum Floor Price For Carbon Credit 

It proposed setting a minimum floor price of $20 per carbon credit to ensure quality offsets and attract investment. While agriculture currently lacks binding emissions targets, it could play a key role in helping other sectors offset emissions by selling verified credits.

It added, “Energy use in agriculture is primarily driven by groundwater pumping and mechanised equipment like tractors and threshers. Due to fuel and electricity subsidies, energy use is often inefficient, creating opportunities for emissions reduction through improved efficiency and clean energy transitions.”