Circular economy initiatives in Indian manufacturing: an ecosystem view

Escalating consumption patterns in India on account of the expansion in manufacturing and economic growth, are resulting in a complicated web of interdependencies between economic growth and the nation’s resources dependence. Re-circulation of resources, to create closed-loop systems for technical and biological nutrients, as a means of extending the useful life of materials and reducing losses through atmospheric emissions and wastage indicates a shift to a circular economy. This is a marked transformation from the predominantly linear economy, which relies on materials extraction, production, use and disposal. Delinking resource consumption (quantity and intensity) from economic growth and ecological impact, also referred to as decoupling, promises sustainable development. The dichotomy of India’s expected pace of industrialisation in the face of multifarious resource exigencies is the research motivation for this study. Manufacturing is intrinsically linked to India’s economic growth, and the sector is expected to attain a 25% share of GDP by 2025. Concomitantly, the nation’s escalating material, energy and water consumption, coupled with challenges in the recovery and management of waste have put resources efficiency at the forefront of current policy. The circular economy in Indian industry is grimly under-explored. This thesis presents a multi-stakeholder ecosystem view by investigating India’s realisation of the circular economy through the evaluation of macro (nationwide) material and energy use patterns, and six case studies in manufacturing industrial parks (Naroda, Nandesari, Jawaharlal Nehru Pharma City), and industrial sectors (steel, cement, bio-products). The researcher used secondary data, field studies, and interviews to investigate macro (national) level, meso (industrial region/park) level and micro (firm) level drivers for resource efficiency and productivity in India’s manufacturing sector. Time-series analyses for macro nation-level material and energy performance revealed interesting patterns. India’s domestic material consumption (DMC) in 2017 rose sharply by 92% over the year 2000. This surge was led by non-metallic minerals as well as fossil fuel materials and can be directly linked to the expansion of industrial, infrastructure and housing sectors. By contrast, India’s IPAT identity recorded increasing affluence as one of the main drivers for material demand, although lowered material intensity due to rising GDP suggests relative decoupling for India’s material performance. Material consumption (per capita) of 5.26 tonnes is far lower than in the USA (21.03 tonnes) and China (17.73 tonnes), signalling opportunities to leapfrog traditional material intensive growth patterns. xviii India’s electricity demand is expected to triple by 2040 to 15,280 TWh; a green energy shift is underway through the scaling up of wind, water, solar infrastructure, generation and storage. Renewable energy sources (RES), which contributed a negligible (<1%) share of India’s energy mix in 2000, had achieved a 1000-fold increase in capacity by 2017. In March 2019, India’s total energy capacity stood at 356 Giga Watt (GW), of which coal and thermal sources had a large but declining share at 64%, followed by the rapidly expanding RES at 22% and large hydro at 13%. The research uncovered nineteen industrial symbiosis networks through circular loops for heat steam exchange; centralised treatment and recovery for hazardous wastes; chemical gypsum as an alternative material in cement; spent acid; treated effluent and wastewater recovery and reuse; product upcycle for bio products; and iron fines and dust by-products transformed into valuable materials. The results suggest early signs of eco-industrial transformation and resource efficiency advances reported through intra- and inter-firm resource exchanges, product and process innovations. The case studies demonstrated not just successful examples of industrial symbioses through resource exchange and shared services but also distinctive institutional structures and support networks to facilitate a circular economy amongst industrial actors. The research contributes to the evolving literature on the circular economy, by examining ecosystem perspectives for the initiation, implementation and accomplishment of green industrialisation models. The study is the first holistic assessment of circular economy initiatives in Indian manufacturing, adding a novel dimension of eco-industrialisation pathways in a fast developing economy. Small and medium enterprises (SMEs) constitute the vast majority of enterprises in India, but they face technological and financial limitations in the adoption of resource efficiency. This research found successful examples of circular economy practices in Indian SMEs, in addition to identifying relevant mechanisms for fostering stronger knowledge and resource exchange networks. The industrial symbiosis patterns in India are proximate to the ‘spontaneous and voluntary’ emergence of symbiosis networks in Europe; contrasting with ‘planned’ symbioses in China, Korea and the USA.