Tamil Nadu textile industry could unlock annual savings of up to ₹3,250 crore (approximately $341 million) by fully transitioning to renewable electricity, according to a new report titled Fashioning a Net Zero Future for Tamil Nadu’s Textile Sector published by Bengaluru-based think tank Climate Risk Horizons.
Authored by Rakesh Ranjan Kumar and Arundhati Muthu, the report highlights that Tamil Nadu, which accounts for nearly one-fourth of India’s textile production, is facing rising energy costs that are impacting the sector’s competitiveness. The study notes that fuel cost intensity—the ratio of fuel costs to output—has increased significantly over the past four years, reflecting growing production expenses and declining energy efficiency.
According to the report, a complete shift to renewable electricity could generate annual savings ranging from ₹2,320 crore to ₹3,250 crore, depending on renewable energy tariff rates. At renewable electricity prices of ₹5 per kWh, annual savings could reach ₹3,250 crore, while tariffs of ₹5.5 per kWh and ₹6 per kWh would result in estimated savings of ₹2,790 crore and ₹2,320 crore, respectively.
The analysis further suggests that a broader clean-energy transition, combining renewable electricity with renewable-powered electric heating systems to replace fossil fuel and wood-based boilers, could yield annual savings between ₹1,560 crore and ₹2,720 crore. However, the report notes that biomass remains relatively inexpensive, making the replacement of biomass-based heating systems less financially advantageous than renewable electricity adoption alone.
“Rising fuel costs are one of the reasons for the declining competitiveness of the state’s textiles, exports of which have plateaued since 2017 at approximately $7.4 billion. Our analysis finds that transitioning towards renewable energy can save the industry billions, improve cost competitiveness and revitalise the sector,” said Rakesh Ranjan, co-author of the report.
The report also underscores the growing importance of decarbonisation as global sustainability requirements become more stringent. India’s textile industry currently has the highest carbon footprint among major textile-exporting countries, exceeding 12.5 kg CO₂e per kilogram of textile production. This footprint is approximately 31 per cent higher than Vietnam’s, 28 per cent above Bangladesh’s and 14 per cent greater than China’s, raising concerns over future compliance with international sustainability frameworks such as the Carbon Border Adjustment Mechanism (CBAM) and the UN-backed Fashion Industry Charter for Climate Action.
In addition, the study links rising biomass consumption within Tamil Nadu’s textile sector to declining dense forest cover in several textile-producing districts. Researchers estimate that the industry may have consumed biomass equivalent to 65–108 million trees over the past decade.
“Global brands sourcing from Tamil Nadu and other Indian states must enable large-scale electrification of heat-based processes, explicitly reject biomass as a climate solution, and use their influence to drive the policy and grid-level reforms needed to accelerate decarbonisation,” said Ashish Fernandes, Director of Climate Risk Horizons.
The report recommends that textile industry associations explore collective renewable energy procurement models to improve access and affordability. It also calls on the Tamil Nadu government and electricity regulators to support wider renewable energy deployment across the textile value chain, particularly among micro, small and medium enterprises (MSMEs), to accelerate the sector’s transition towards a low-carbon future.
With rising energy costs and increasing global pressure for sustainable manufacturing, the report positions renewable energy adoption as a critical pathway for enhancing the competitiveness, profitability and environmental performance of Tamil Nadu textile industry.
Source: Fibre 2 Fashion
(Rewritten & adapted by Indian-Apparel.com News Desk)
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