India-UK bilateral relations has the potential to deepen and reach a new high in the post-COVID world. These two nations have the potential to create a powerful ‘economic green partnership,’ according to new report, UK-India Energy Opportunities out today (22 April).
Published by the leading think tank, Bridge India in collaboration with Howard Kennedy LLP and Mercia Asset Management, it highlights that the UK and India are at the forefront of a clean energy revolution, with shared natural ambition.
There is a global consensus that climate change is the most urgent issue of our time and the stakes could not be higher. Solutions are needed and this report urges closer UK-India energy collaboration in electric vehicles, batteries and green financing. UK-India Energy Opportunities reveals how a closer energy sector collaboration could create a huge market for British businesses to innovate in the UK, but grow in India. Currently, this is largely untapped and has the potential to propel bilateral relations between these two nations in the next five years. Bridge India interviewed investors, government stakeholders and businesses in both countries to give a comprehensive overview at how to turbo-charge bilateral trade and investment.
The timing of this report could not be more relevant, as earlier this week (20 April), the UK government announced that it is to set in law the world’s most ambitious climate change target, cutting emissions by 78 percent by 2035 compared to 1990 levels. The new target will become enshrined in law by the end of June and will mean an increase in ambition on the international pledge made by the UK last December to reduce emissions by 68 percent by 2030. By setting such an ambitious emission reduction target, it will turbo-boost the UK’s diplomatic drive to persuade other countries to set out ambitious targets of their own.
The UK now has the opportunity to spark a real global green industrial revolution. However, its credibility will rest on action and must put in place the policies and investment needed to achieve the target. In 2020, the UK announced its Ten Point Plan for a Green Industrial Revolution, which seeks to make the UK a global leader in green technologies, such as offshore wind, low carbon hydrogen and green transport as well as innovative green finance mechanisms. The Plan will mobilize £12 billion of government investment, and potentially three times as much from the private sector, to create and support up to 250,000 green jobs.
The Advance Praise
The report has already been warmly praised by both Gaitri Issar Kumar, IFS, High Commissioner of India to the UK and Alex Ellis CMG, British High Commissioner to India.
Gaitri Issar Kumar, IFS, High Commissioner of India to the UK congratulated Bridge India for its initiative to publish this report and went on to say, “The shared commitment of both governments, the United Nations Framework Convention on Climate Change and its Paris Agreement are the beacons showing the way to business houses wishing to partner in further strengthening the energy sector in both countries. The successful India-UK Green Growth Equity Fund is an example of such collaboration.”
She added, “With the UK hosting COP26 this year and India assuming the Presidency of G20 in 2023, both countries are well placed to provide leadership and direction to the effort of the international community towards the objectives of UNFCCC.”
The UK government is looking to build back better and to invest in making the UK a global leader in green technologies and Alex Ellis CMG, British High Commissioner to India said, “This report comes at a critical moment, as countries decide how they power their economies. Decisions today will have impacts for many years to come. Developing cleaner energy and reducing emissions is an essential part of any smart economic growth and business strategy.”
The International Energy Agency expects India to be the largest contributor to the global upswing in renewable energy in 2021, with solar photovoltaic panels and wind energy playing a key role in this transition. The report recommends India should utilize London’s position as the go-to venue of choice for raising green bonds to finance its ambitious climate agenda. In the electric vehicle market, both countries have the opportunity to work together to build international industry champions. In part, this is important to act as a bulwark against China’s dominance of the EV supply chain.
The report gives a balanced view and while it praises India’s extraordinary successes in its recent energy development, its progress in improving energy efficiency, developing new renewables, where it now produces some of the cheapest solar energy in the world; it also highlights the challenges. While climate change is important for India’s clean energy ambitions, it is set against rapid urbanization and industrialization, which are responsible for increasing carbon emissions. Six of the world’s ten most polluted cities are in India. Four of these – Delhi, Noida, Gurugram, Greater Noida and Ghaziabad – are in the Delhi region. According to the World Health Organisation, one out of every four people killed by air pollution globally each year is in India.
The Bridge India report believes the solution to these challenges is collaboration, where innovation out of the UK will help accelerate India’s progress in the renewable energy sector, and will support a global transition to a net zero economy. Both markets are taking their first steps towards a hydrogen economy, where there is great scope for technology sharing as the UK’s carbon capture, usage and storage (CCUS) technology market grows, which could support India’s production of hydrogen from natural gas. The report features the work of Faradion, the world leader in sodium-ion battery technology, which has expanded its presence significantly in India through licensing and building manufacturing capabilities. It also highlights Nova Pangea Technologies, a business created to convert discarded plant biomass into a variety of valuable biochemical and biofuels, is another example of British innovation flourishing in India.
The 2015 Paris Agreement
Sadly, it is a well-known fact that the world is not currently on track to reduce its emissions enough to keep global warming within the goals laid out in the 2015 Paris Agreement of 1.5°C above pre-industrial levels and well below 2°C. This Bridge India report is a blueprint of how countries can work to the benefit of each other and the international community as a whole.
International collaboration is imperative to take the world through the recovery from COVID-19 – fostering partnerships for leveraging trade, investment and technology. The pandemic has underlined the fact that global challenges need global solutions and strong global climate leadership.