India Climate Startups Insights

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Industrial hubs as a strategic lever for Net-Zero transitions

Source : Modern Diplomacy

Notes by Narsi

Decarbonization is not a competitive imperative for most corporates, at least not now. It is a survival imperative. That being the case, it makes sense for corporates that share common characteristics to collaborate for decarbonization. This means a decrease in overall costs (owing to economies of scale) and equally important, a decrease in risks - if an innovative project bomb, the extent of harm for each company in the mix could be much less than if they had tried it out individually.

One exceptional avenue for corporates to have such a collaboration done in the short term is through industrial clusters - geographic regions where industrial companies are concentrated, and in many cases, companies related to the same or similar industrial sectors are concentrated in one place.

Such proximity can enable sharing of infrastructure (such as CO2 and hydrogen pipelines or renewable energy assets), financial and operational risks, and also easier access to human resources & talent.

It is quite encouraging to see many such cluster initiatives already starting off in North America and Europe. Hopefully, this will start soon in India as well.

See all Insights from: Decarbonizing Industries


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