Effect of Perform-Achieve-Trade Cycle-II: Study of the Indian Cement Industry

Abstract

Industrial sector is the largest consumer of fossil fuels in India. Dependence on fossil fuels also increases carbon dioxide emissions. In order to steer the industrial sector towards a more efficient use of energy resources, Government of India and Bureau of Energy Efficiency launched the Perform-Achieve-Trade scheme to improve energy efficiency of select high energy consuming industries. From each of these industries, on the basis of their energy consumption, a set of plants were selected for implementation of the scheme. PAT has multiple cycles of implementation. This paper analyses the effect of PAT Cycle-II on the energy intensity of the cement industry for a sample period of 2004-05 to 2020-21, along with the effect of other control variables like gross fixed assets, R&D expenditure, imports, and FDI. Results show that in its second phase PAT has had a significant impact in reducing energy intensity of designated cement firms. The paper also estimates the amount of energy saved by the cement industry, and the fall in CO2 emissions thereof. It has helped to achieve an energy saving of 3.964 Mtoe, and the concomitant fall in CO2 emissions of 15.608 MtCO2.