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Sector Overview

Environmental services industry in India comprises service companies providing advisory and assistance to businesses and other organizations related to environmental issues as well as the designing, program management, Operations & maintenance, monitoring & evaluation of services across all areas. The major environmental services comprises of cleaning up polluted areas, management of natural resources, environmental auditing, waste management and environmental policy development, etc. The various environmental sub-sectors includes water supply & waste water treatment, monitoring equipment and services, solid waste management, renewable energy, air pollution and water sanitation, etc.

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Trends

  • Globally, Environment Services market has reached $600 Billion in 2016 and India stood as the 3rd largest environmental technologies market worldwide.
  • India is also the 5th largest e-waste producer in the world with 1.8 million tons of e-waste generated every year which is expected to rise to 5.2 million tons by 2030.
  • Environment consulting is also one of the emerging environment services accounts for huge revenues worldwide. Water and waste management services accounts for 30%, contaminated land services - 29%, environmental management, compliance, and due diligence - 14%, environmental impact assessment and sustainable development -14% and climate change and energy nearly about 8%, as per an assessment of the aggregated revenues of the world's top 20 firms by Environment Analyst.
  • Indian environmental consulting services market is the 8th largest in the world and is expected to grow from around $0.55 billion in 2016 to around $0.75 billion in 2020. Currently, India holds about 1.8% share of the global environmental consulting services market. Due to increasing investments in infrastructure and manufacturing, environmental consulting services market in the country is expected to grow at a CAGR of 4.3% in the forecast period.
  • India has also ratified the Paris Agreement in 2016 under which an ambitious target is been set up by the government to achieve 175 GW of renewable energy capacity by 2022. It also includes 100 GW of solar capacity addition and 60 GW of wind power capacity by 2022. 60 solar cities to be developed in India as part of Ministry of New and Renewable Energy’s Solar Cities program. With high set targets and growing environment related issues there exists huge opportunities for improvement and growth of environmental services in India.

Highlights of Sub-sectors

Waste Management

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As per the estimates, Waste Management Industry in India is expected to grow to USD 1 Billion by 2020.

Waste comprises of Municipal Solid Waste, Plastic Waste, E-Waste, Hazardous Waste, Industrial Waste and Bio-Medical waste. India is the 6th largest municipal waste generator in the world. As per (Task Force, Planning Commission), India generates approximately 62 million tonnes of waste per annum. With the increasing rate of urbanization in India, it is estimated that volume of waste will increase by 5% p.a. and waste generation will be ~436mn tonnes per annum by 2050.

 

 

Bio-Medical Waste – As one of the largest populated country and a well-known medical tourism destination worldwide, India generates 550 tons per day of medical waste. Although, only 15% of biomedical waste is hazardous, but the treatment of all waste is important, not just for the public but also healthcare workers. Ministry of Environment, Forest and Climate change has amended Bio-Medical Waste Management Rules in 2016 to improve compliance and strengthen the implementation of environmentally sound management of biomedical waste in India.

 
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Plastic Waste

Over 300 million MT of plastics are produced globally p.a. and nearly 50% of this volume is for disposal applications. According to All India Plastic Manufacturer Organization, size of the plastic Industry in India is estimated at Rs 110,000 Crore with plastic consumption of 13 million tonnes per year and waste generated accounts for 9 million tonnes per year. More efforts towards recycling of plastic waste is the need of the hour to save the environment from land pollution, as most of the plastic is dumped into land creating land and soil pollution problems in the country.

 

E-Waste

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India ranks as 5th largest producer of E-waste in the world by generating 18 lakh metric tonnes of E-waste each year which is likely to raise to 52 lakh metric tonnes by 2020.

In India, over 95% of e-waste generated is managed by the unorganised sector and merely 1.5% of total e-waste gets recycled. This indicates that huge opportunity for investment is there for both government and private sector to contribute in the management of e-waste in the country.

 

Waste to Energy

Waste to Energy Programme is the initiative of Ministry of New & Renewable Energy (MNRE) with the objective to harness the available potential for the development of energy sector in the country. Aim is to convert Industrial waste to biogas and generate power from industrial solid waste. Globally, over 2200 plants are operating to convert waste into energy with China and USA alone having 150 and 86 plants, respectively. Despite of burgeoning population, India is only having 4 plants which is indicating immense potential and opportunities in this service sector. In India unused waste has the potential to generate 439 MW of power from 32,890 TPD of combustible waste which is enough to meet the power demand of a union territory like Pondicherry

 

Renewable Energy

Indian renewable energy sector is the 2nd most attractive renewable energy market in the world. India accounts for approximately 4% of the total global electricity generation and contributes 4.43% to the global renewable generation capacity. India ranks 4th in the world in terms of total installed wind power capacity and 6th largest in terms of solar power capacity. According to International Energy Agency’s World Energy Outlook, renewable energy is projected to supply 4,550 GW in 2040 globally.

 
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Installed renewable power generation capacity has increased steadily over the years, with a CAGR of 9.29% over FY08–19.

India is looking to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role. There is high untapped potential in renewable energy sector and India is estimated to have the potential of 900GW from commercially exploitable sources.

Air Quality Management

Air Pollution is one of the major health threat in the modern day metropolitan India. As per a report released by Health Effects Institute, USA (April 17, 2018) India alone accounts for 25% of all the air pollution-related deaths in the world during 2016. Government of India has initiated National Clean Air Program (NCAP) as a comprehensive plan to reduce air pollution in 100 Indian cities. Government is targeting to reduce air pollution by almost 35% over the next 3 years, followed by a 50% reduction within 5 years.

 

References - Data and reports available in the public domain including Ministries Annual Reports and Data Statistics, IBEF Sectoral Reports, Department of Industrial Policy and Promotion (DIPP), RBI Handbook of Statistics on Indian Economy, Media & Industry Reports, Press Information Bureau (PIB), Union Budget 2018-19

Disclaimer - This information has been collected through secondary research and is available in the public domain. We are not responsible for any errors in the same.

Environment Services – Growth Drivers

Government Commitment

Government of India has set an ambitious target of achieving 175 GW of renewable energy capacity by 2022 under Paris Agreement. These include 100 GW of solar capacity addition and 60 GW of wind power capacity. The solar capacity target will be achieved before its 2022 deadline while wind power capacity is expected to reach 60 GW by FY21.

 

FDI inflows in India’s renewable energy sector is recorded as US$ 6.84 billion between April 2000 and June 2018. More than US$ 42 billion has been invested in India’s renewable energy sector since 2014.

The government allows 100% FDI under the automatic route for urban infrastructure areas including waste management subject to relevant rules and regulations

Rising Investments

 

Favourable Policies and Initiatives

Government supporting waste management through Swachh Bharat Mission, Smart Cities Mission, and AMRUT

Government is offering subsidies to businesses for converting waste to energy (WtE)

National Solar Mission, Green Energy Corridor, Skill Development, National Offshore Wind Energy Policy 2015, etc. to boost renewable energy services from India.

 

India is not only highly populated but one of the fastest growing countries in the world. This fast-paced development need environmental services to support the sustainable growth of the country. Population is expected to rise to 600 million by 2031. The rapid growth of urban dwellers is anticipated to further burden the country’s waste management resources.

Population growth and urbanization

 

Growing Industrialization

Policy push like Make in India have resulted in various companies entering India to set up their manufacturing bases. Growing Industrialization is increasing the industrial waste and pollution issues in the country.

 

Increasing awareness of adverse health impacts because of Air and water pollution has increased more concerns on environment services like waste management, pollution control, etc.

Increasing health awareness

 

Apart from above growth drivers, many other important factors that are driving the growth of India’s environment services are –

 
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Upsurge in technology adoption – India is world's 2nd largest Telecom Market and have 3rd Highest Number of Internet Users. High usage of mobile phones and continuous technology upgradation ultimately ends up in more e-waste. Since a meagre 1.5% of total e-waste gets recycled in India due to inadequate infrastructure, tremendous opportunities exist for manufacturers and other players to participate in this space.

 
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Strict Environmental Laws – Huge emphasis of government on better waste management and environment compliance laws. These laws arepromoting environment services like environment consultation and advisory services, waste management services, etc.

 
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Competitive advantage – India receives about 300 days of sunshine in a year and has a large hydro power potential which is still untapped. As one of the largest solid waste producer in the world, India have huge opportunities in waste management services.

 

Government Initiatives/Policy Support

Indian government has taken a number of initiatives to promote environment related services in India.

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100% foreign direct investment under the automatic route for urban infrastructure areas including waste management subject to relevant rules and regulations. 100% is permitted under the automatic route for renewable energy generation and distribution projects subject to provisions of The Electricity Act, 2003

Apart from relaxed FDI norms, various fiscal incentives are provided by government to businessessuch as 100% tax deductions on gains and profits to companies that handle waste management projects, exemption and concessions on electricity taxes and excise duty, waiver of customs duty on certain material imports meant for generating renewable energy, etc.

 
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Government has made waste management a priority under several of its initiatives including Swachh Bharat Mission, Smart Cities Mission, Atal mission for rejuvenation and urban transformation (AMRUT), and National Mission for Sustainable Habitat.

 
  • Make in India to attract Foreign players (PPP model or in collaboration with Indian players) for manufacturing equipment related to waste management and recycling.
  • Start-up India to give enthusiasm support to start-ups in the field of recycling and WtE.
  • Smart Cities to have hi-tech solid waste management system in the country.

 

  • National River Conservation Plan (NRCP) initiated by Central Pollution Control Board (CPCB) in association with the State Pollution Control Boards to monitor the water quality of rivers in the country on a regular basis.
  • Amendment of Bio-Medical Waste rules and E-Waste Management Rules (March, 2018) to improve compliance and strengthen the implementation of environmentally sound management of biomedical and E-waste in the country.
  • New Hydropower policy for 2018-28 has been drafted for the growth of hydro projects in the country.
  • Green Skill Development Programme (2017) initiated by the Ministry of Environment, Forest and Climate Change (MoEF&CC) under the ENVIS Scheme. The objective is to skill youth of India by training them on environment and Bio-diversity related issues like Pollution Monitoring, Waste Management, Forest Management, Water Budgeting & Auditing, Wildlife Management, Marine Taxonomy & Coastal Biodiversity & Livelihood Generation, etc.
  • National Clean Air Program (NCAP) as a long-term national level strategy to tackle the increasing air pollution problem across the country. It is a city specific air pollution abatement action plan for 100 most polluting cities of the country with a corpus of Rs. 637 Crore.
  • Government of India has announced plans to implement a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilisation
  • Many schemes have been initiated by Government of India to promote the growth of Renewable energy such as National Solar Mission, Green Energy Corridor, National Offshore Wind Energy Policy 2015, Repowering Policy, Wind-Solar Hybrid Policy, and Renewable Purchase Obligations (RPO’s), Scheme for Development of Solar, etc.

Opportunities & Road Ahead

With growing pollution and Industrialization, awareness and concerns for environment safety and protection are keep on increasing day by day. Strong commitments and policy initiatives taken by the government indicates huge growth opportunities in this sector. Government of India is committed to increased use of clean and renewable energy sources to meet the demand of power supply in the country. India needs investments of around US$ 125 billion to reach the ambitious target of Ministry of New and Renewable Energy (MNRE) for setting up renewable energy capacities of 175 GW by 2022. In fact, Government of India is aiming to achieve 225 GW of renewable energy capacity by 2022, much ahead of its target of 175 GW as per the Paris Agreement as of June 2018. It is also expected that by the year 2040, around 49% of the total electricity will be generated by the renewable energy. India also have strong future prospects for investments in other segments such as-

Waste to energy (WtE): According to the Ministry of New and Renewable Energy (MNRE), currently 62 million tons of Municipal Waste produced in India is dumped without treatment and it will go up to 114 million tons by 2041. As Per IREDA (Indian Renewable Energy Development Agency) estimates, India has realized only 2% so far of its WtE potential. To promote and uptake WtE, MNRE is also providing subsidies and incentives for WtE projects.

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Smart Cities Mission: Efficient waste management is one of the important areas identified under the Smart Cities Mission. A lot of investment opportunities are there for both domestic and international businesses to invest in Smart City mission of India.

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Swachh Bharat Mission: Government targets to construct 6.6 million toilets in urban and over 100 million toilets in rural India by 2019. Huge opportunities exists for health and hygiene companies, ceramic companies, and construction companies to make Swachh Bharat mission a success.

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Management of E-Waste: India is the fifth largest e-waste producer in the world, generating 1.8 million tons of e-waste each year, which is expected to rise to 5.2 million tons by 2030. There is huge scope for businesses providing e-waste management services to cater the growing demand. India requires newer delivery models, more sophisticated technology, newer designs, and better implementation practices to manage its waste and resources, which can result in tremendous opportunities for investors and private firms.

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