CHENNAI: The State's textile industry, one of the country's largest generators of exports and employment, can save up to Rs 3,250 crore annually by fully transitioning to renewable energy, according to a new study released by the Bengaluru-based climate research organisation Climate Risk Horizons.
The report, titled "Fashioning a Net Zero Future for Tamil Nadu's Textile Sector", was jointly published by Climate Risk Horizons and Energy Transition Ventures. The study was authored by researchers Rakesh Ranjan Kumar and Arundhati Muthu following an extensive assessment of industrial energy consumption, export trends and field-level consultations with textile stakeholders across Tirupur, Coimbatore and Erode.
The report arrives at a time when industries across the country are grappling with mounting fuel costs amid global crude oil volatility triggered by the US-Iran conflict. Against this backdrop, the study argues that Tamil Nadu's textile sector can significantly improve profitability and global competitiveness through rapid decarbonisation.
The State's textile and apparel sector supports over 8.6 lakh workers in the organised sector and contributes nearly 17 per cent to the state's manufacturing Gross Value Added (GVA). The sector also accounts for around 27 per cent of India's textile exports, with hubs such as Tirupur, Coimbatore and Karur driving knitwear and apparel shipments to global markets.
Drawing on data from the Annual Survey of Industries (ASI) for 2011-12 and 2023-24, the report found that total energy expenditure in Tamil Nadu's textile sector surged by nearly 47 per cent between 2020-21 and 2023-24. During the same period, fuel cost intensity, a measure of how much revenue is consumed by energy expenses, rose by about 17 per cent, steadily eroding operating margins.
The study said electricity currently accounts for around 80 per cent of the sector's energy expenditure, while petroleum products, coal and biomass make up the remaining share. Petroleum alone constituted 12.6 per cent of total energy spending in 2023-24.
According to the report, a complete transition to renewable electricity sourced through green tariffs and open-access mechanisms could reduce electricity expenditure by up to 41.5 per cent, resulting in annual savings of nearly Rs 3,250 crore. Even under conservative cost assumptions, the sector could still save more than Rs 2,300 crore annually, the report said.
The study further projected that replacing fossil-fuel and biomass-based boilers with renewable electricity-powered clean heating systems could generate additional annual savings of Rs 1,560 crore to Rs 2,770 crore.
"Renewable electricity is not merely a sustainability choice but a financially compelling strategy that can reduce energy expenditure and strengthen long-term competitiveness in Tamil Nadu's textile and apparel industry," the report said.
The report also raised concerns over the sector's environmental footprint. It noted that India's textile industry has the highest carbon footprint among major exporting nations, with emissions exceeding 12.5 kg of carbon dioxide equivalent per kilogram of textile produced, 31 per cent higher than Vietnam, 28 per cent above Bangladesh and 14 per cent higher than China.
It further pointed to a correlation between rising biomass use in Tamil Nadu's textile clusters and the decline of dense forest cover in surrounding districts. The report estimated that woody biomass consumption by textile units between 2011-12 and 2023-24 could potentially equal the loss of between 65 million and 249 million trees.
"Shifting to low-carbon and non-biomass heat sources is not only a decarbonisation imperative but also a crucial step toward protecting regional ecosystems," the study observed.
The report warned that Tamil Nadu's textile exports have largely stagnated at around USD 7.4 billion annually since 2017-18, despite the State's strong manufacturing base. It said future export growth would increasingly depend on compliance with sustainability-linked global trade regulations such as the European Union's Carbon Border Adjustment Mechanism (CBAM) and the UN-backed Fashion Industry Charter for Climate Action.
While Tamil Nadu was among the earliest adopters of wind energy in the textile sector nearly three decades ago, the report said several bottlenecks continue to hinder large-scale adoption of renewables, including high costs of green power, banking restrictions, grid curtailment, and inadequate evacuation infrastructure.
The study called upon the Tamil Nadu government, electricity regulators, textile associations and global apparel brands to jointly accelerate investments in renewable electricity, electrified heating systems and green industrial infrastructure to protect the long-term competitiveness of the state's textile economy.
TN textile sector can save up to Rs 3,250 crore annually through a renewable energy transition
Sector employs over 8.6 lakh people in organised industries
Energy costs in textile sector rose by nearly 47% between 2020-21 and 2023-24
Fuel cost intensity increased by 17%, affecting profit margins
India's textile sector has the highest carbon footprint among major exporters
TN textile exports have stagnated at around USD 7.4 billion since 2017-18
Biomass use by textile units could equal the loss of 65 million to 249 million trees in a decade.