With advancements in climate technology retailers that use cold chains extensively can slash wastage of produce from 25% to 6%
By Devendra Gupta
Climate technology is defined as those technologies that are primarily focused on lowering Green House Gas (GHG) emissions or mitigating the effects of global warming. Macro developments in India, such as urbanization, rapid growth, climate change, and depletion of resources, continue to drive the need for investments in climate technology solutions.
This call is being answered by established tech-companies who are developing and launching promising climate tech solutions that will drive the future growth for these technologies in the country and beyond.
Venture Capitalist (VC) investment in climate tech start-ups surged globally from $6.6 billion in 2016 to $32.3 billion in 2021. India is rapidly gaining pace in this regard, with a VC capital input of $1 billion into the country’s climate tech sector during the same period. According to a recent analysis, 120 climate tech start-ups in the country had more than 200 fundraising rounds from 272 different investors over the last five years alone.
Experts estimate that roughly 20% of companies prioritize sustainability, with think tanks such as Niti Aayog offering financial assistance for the growth of clean-tech incubation centers and various catalysts for entrepreneurship in this sector. The start-up and investor ecosystem is also collaborating with the government to address the country’s emission issues across all industries.
Additionally, the US and Western European countries are the leading sources of imports of environmental technologies into India, as per an ADB report.
With an increasing focus on mitigating the effects of climate change, India made several commitments at the COP 26 summit that was held in Glasgow in 2021. These include growing the country’s non-fossil energy installed capacity to 500 GW and the reduction of the total projected carbon emissions by 1 billion tons by 2030.
The investor community’s focus on Environmental, Social, and Governance (ESG) ratings is also adding momentum and leading brands towards adopting and promoting climate tech.
Consequently, the climate tech industry has been flourishing in recent years and is set to grow at a rapid rate as it becomes easier to adopt clean energy. This momentum will play an important role in leading India to build a better tomorrow.
Growth of Climate Technology and its impact on driving sustainability
Often referred to as the Greentech industry, companies in this sector are focused on the conservation of energy and water resources, along with providing an assortment of climate tech solutions in agriculture and manufacturing. In India, the climate tech industry employs a wide range of technologies such as renewable energy (biomass, wind power, biofuels, and so on), recycling, and the like. The sector seeks to increase active performance, productivity, and efficiency while also benefiting the environment. This is accomplished via lowering inputs and reduction in expenses, waste, and energy consumption, particularly in manufacturing.
Today, almost every industry is now working on climate technologies. Even start-ups and small enterprises are making a difference by using climate technologies. According to MarketsandMarkets.com, the global Green Technology and Sustainability market size is expected to grow from USD 11.2 billion in 2020 to USD 36.6 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 26.6% during the forecast period. The growing consumer and industrial interest for the use of climate energy resources to conserve the environment and increasing use of Radio Frequency Identification (RFID) sensors across industries are driving the adoption of green technology and sustainability solutions and services in the market.
Industries such as climate energy, smart grids, and sustainable transportation are all key areas that can help brands and retailers to create innovative solutions to create lasting impact in society.
How Brands and Retailers are building innovation with climate technology
The future of climate technology is changing in India. Major brands and retailers are focusing on macro developments such as urbanization, rapid growth, climate change, and depletion of resources that continue to drive the need for investments in clean technologies. At the same time, emerging industries/start-ups are coming up with innovative ideas to drive future growth towards a clean environment.
The climate tech industry is on the verge of a significant breakthrough. Emerging technologies like IoT, AI, and automation can help retailers and brands to create innovative solutions that will have a lasting impact on the environment. Companies in the climate tech sector are not only providing solutions to the world’s environmental problems but also creating new opportunities for businesses. Some renewable energy industry trends that the brands and retailers are focusing on to create sustainable solutions are:
- Introducing New Technology: These systems may provide zero-carbon power as well as longer-term seasonal electricity storage and help integrate solar and wind into the grid, all while contributing to the goal of reversing climate change.
- New Business Model: Solar photovoltaic (PV) systems are now among the most cost-competitive energy alternatives on the market, thanks to an 85 percent cost reduction over the last decade. The solar sector will certainly increase its attempts to explore novel configurations and business models as it exercises its competitive muscle. By 2022, the sector might be extending solar-plus-storage buildouts, investigating floating solar PV modules, and expanding community solar projects to new markets.
- Sustainable Growth: End-of-life (EoL) management techniques for renewable energy industry items and materials are projected to gain prominence in 2022. As solar, wind, and battery installations reach unprecedented heights, waste output in the renewable energy industry is predicted to skyrocket, necessitating immediate solutions. By 2030, there might be 1 million tons of garbage from retired PV modules, and 80 metric kilotons of lithium-ion batteries (LiBs) to recycle in the United States alone. Food waste is another important aspect that can be addressed through climate technology. Due to a paucity of an efficient cold chain system, India loses 440 billion rupees’ worth of vegetables, fruit and other foodstuffs annually. Most of the country’s existing cold storage facilities are massive units that run off the electric grid and have a single temperature zone mainly designed for potatoes and tomatoes. However, different vegetables and fruits need varied temperature requirements. Besides, since these huge cold storages are expensive to build and operate, they are out of the reach of most farmers.
Small decentralized solar-powered cold rooms are the answer, because they alleviate the reliance on the erratic power supply from the grid, require substantially lower CAPEX, and allow the farmers to fine-tune the temperature to best suit their harvest throughout the year.
Like farmers, retailers would stand to benefit from these systems too. According to some climate tech proponents who have worked in the sector, retailers today lose an average of 25% of their produce to waste. When cold chain technology is introduced right at the gate of the farms, this wastage is brought down to as low as 6%. In fact, the vegetables and fruits that have been stored in the cold chain have been found to be fresher on the second day than the market produce on its first day.
Unfortunately, many retailers are not aware of the significant impact that the cold chain has on their businesses. With increased shelf life for the produce, there is more time for it to sell and slower wilting reduces wastage as well. In terms of percentage, retailers stand to benefit by 8% due to the decrease in moisture loss, another 8% through sourcing in higher volumes made possible due to extended shelf life and 6% by way of the premium that consumers are ready to pay for the extra-fresh produce being sold to them.
Due to these factors, the demand for produce can be satiated without severe supply side competition, and retailers can earn more from the produce they stock.
This is how climate technology – in addition to addressing environmental issues – is also helping other sectors like retail and technology to innovate and create new solutions.
Sustainable Future of Climate technology in India
Climate tech has seen an increase in attention from innovators, corporate, government leaders, and investors over the previous decade, resulting in an increase in the number of inventions, lower pricing, and the creation of new policy frameworks. Climate technologies have the potential to alleviate environmental damage produced by non-renewable energy sources while also addressing the critical demand for energy for all. These improvements have resulted in a larger climate-tech market.
With new trends in the realms of technology and renewable energy, India is witnessing enormous growth in the climate tech space. With a strong need for Greentech to increase energy security and reduce pollution, the country will flourish in the field of climate technology.
The writer is Co-founder and CEO, Ecozen Solutions, which offers solutions for the way perishables are handled across the value chain, with clean and innovative technology. It was first published in the November 2022 issue of Progressive Grocer.
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