RE adoption rises in textile sector, but challenges persist: Report

Renewable energy adoption has gained momentum in the Indian textile industry, but intensity-related challenges still persist, stated an ICRA ESG Ratings Report.

A new report by ICRA ESG Ratings Ltd shows a steady increase in renewable energy adoption among Indian textile companies, even as energy use per unit of revenue, has also increased, an ICRA statement said.

The findings are based on a review of 19 major textile firms, including Page Industries Ltd, Welspun Living Ltd, Arvind Ltd, and KPR Mill Ltd, from FY2023 to FY2025.

The study is part of the broader analysis presented in 'Sustainability Unstitched: Indian textile industry's green gauge.'  The report says that the average share of renewable energy in the sector's total energy consumption rose from about 14 per cent in FY2023 to nearly 18 per cent in FY2025.

Apparel companies led with an increase from 26 per cent to 28 per cent, aided by the feasibility of rooftop solar for electricity-driven operations like cutting and stitching.

The yarn and fabric segment showed the sharpest relative improvement, climbing from 3 per cent to 8 per cent, driven by leaders scaling up solar and biomass-based solutions, it stated.

The integrated segment advanced from 17 per cent to 21 per cent, supported by bulk green power contracts and captive solar investments by large composite units.

Despite this shift toward cleaner energy, the energy required to generate each crore of rupees in revenue increased by 68 per cent compared to FY2023, it stated.

The apparel segment saw a notable 28 per cent rise in energy intensity, attributed to scaling production and a higher share of premium, energy-intensive finishing processes.

The yarn and fabric segment, the most energy-intensive, posted an 8.5 per cent overall increase, with a spike in FY2024 linked to revenue contraction and higher operational energy use, it stated.

The integrated segment's energy intensity remained relatively stable, rising only 6 per cent, supported by investments in waste heat recovery and process automation.

Greenhouse gas emission intensity, however, declined in some segments, indicating efficiency gains and a gradual fuel shift, it stated.

Integrated companies reduced emission intensity by about 5 per cent, and yarn and fabric firms by about 8 per cent, it stated.

The apparel segment recorded a 12 per cent increase in emission intensity, driven by higher production volumes. Disclosure of indirect Scope 3 emissions, which cover value chain activities, remains low across the board.

Only 21 per cent of the sampled companies reported Scope 3 data in FY2025, with the highest coverage in the integrated segment at 29 per cent, followed by apparel at 20 per cent and yarn and fabric at 14 per cent.

Sheetal Sharad, Chief Ratings Officer, ICRA ESG Ratings Ltd, said in the statement, "The textile sector's sustainability transition is underway, but the pace must quicken. For players that are part of global value chains, achieving higher ESG maturity will support competitiveness in the longer run. Implementation requires investment in advanced technologies and renewable energy solutions. Targeted upstream interventions would ensure that India's textile leadership thrives in a sustainability-driven world."  The report states that energy-heavy upstream processes like spinning, weaving, and wet finishing continue to drive the sector's energy and emission footprint.

It calls for more captive renewable energy projects, efficiency measures, and improved Scope 3 reporting to align with global standards, it stated.