The shift toward sustainability in global supply chains is accelerating, driven by a growing awareness of environmental concerns and the pressing need to combat climate change.

Understanding climate-smart commodities - Climate-smart commodities are goods produced, processed, and distributed using methods that significantly reduce greenhouse gas emissions, enhance resilience to climate change, and improve overall sustainability. These commodities span various sectors, including agriculture, forestry, energy, and manufacturing. Green principles are applied at each stage of the commodity lifecycle, from resource extraction to manufacturing, transportation, and waste disposal.

Renewable Energy

A cost-effective solution - At the heart of climate-smart commodities is integrating renewable energy to power every stage of the supply chain, from manufacturing to logistics. As industries transition away from fossil fuels, renewable energy offers a cleaner, more cost-effective option for reducing greenhouse gas emissions. India’s installed renewable energy capacity has increased by 165 per cent over the past decade, rising from 76.38 Gigawatts (GW) in 2014 to 203.1 GW in 2024, and we are now ranked fourth globally in renewable energy installed capacity. The cost of renewables is significantly lower than that of fossil fuels, and now 24-hour round-the-clock green power is also available (with the integration of storage) at prices comparable to conventional power.

This abundance of economic green 24-hour power is key to integration across the manufacturing and transportation of goods. Corporations can either install these renewable plants on site or procure green power directly through the grid through open access power purchase agreements (PPAs). By leveraging renewable power, the company reduces reliance on coal-based electricity, cutting emissions. This can be done across sectors, whether automotive, cement, textiles, consumer goods, etc, to produce climate-smart commodities that are both environmentally and economically viable.

Storage & Green Hydrogen

Ensuring reliability - The cost of storage has plummeted, making 24-hour renewable power available at less than 5 Rps. This effectively addresses any concerns about intermittency or reliability, ensuring stable round-the-clock green power even beyond sunshine or wind hours. Storage is crucial at three points – at the generating source, at the grid, and at the consumer end to maintain a balance. This also guarantees the stability of the grid & transmission infrastructure.

Beyond solar, wind, and hydro, green hydrogen has emerged as a critical enabler of sustainable supply chains, particularly in heavy industries and transportation. Green hydrogen, produced through electrolysis powered by renewable energy, offers a carbon-neutral fuel alternative for sectors such as steel, cement, and chemical manufacturing. One of the key reasons for the growing interest in green hydrogen is its versatility as both a fuel and an energy storage solution. However, its cost structure heavily depends on power prices — approximately 70 per cent of the cost of producing green hydrogen is the cost of electricity required for electrolysis. This makes renewable energy the linchpin in determining the commercial viability of green hydrogen. India is leading the front with the Green Hydrogen Mission, looking to decarbonize hard-to-abate industries sectors with an outlay of Rs. 19,744 crores for the mission.

Sustainable logistics and electric vehicles

Transportation and logistics are crucial elements of global supply chains and are responsible for a significant portion of carbon emissions. Integrating renewable energy into logistics operations can drastically reduce these emissions. In India, the growing adoption of electric vehicles (EVs) powered by renewable energy is a step toward decarbonizing transportation networks. EV fleets, particularly for last-mile deliveries, are being adopted by e-commerce giants. When charged using solar or wind power, these vehicles create a closed loop of sustainability. Moreover, companies are investing in solar-powered warehouses or procuring green power through the grid, reducing energy consumption and associated carbon emissions at storage and distribution centres.

Conclusion

The future of climate-smart commodities hinges on integrating renewable energy across supply chains. From manufacturing to transportation, renewable energy sources like solar, wind, or hydro are essential for creating sustainable, low-carbon products. As India continues to expand its renewable energy capacity and invest in storage technologies, the country is poised to become a global leader in climate-smart commodities, setting a benchmark for sustainable supply chain practices.

Renewable energy is no longer just a good to—it has become a strategic asset for industries to reduce costs and align their operations with global climate goals. By embracing renewable energy, Indian industries are reducing their carbon footprints and creating a more resilient, future-proof supply chain. In this context, climate-smart commodities are not just a trend but an imperative for sustainable economic growth in the 21st century.

The author is Founder, Mynzo Carbon & SolarArise

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