Embracing Net Zero In Warehousing: A Pioneering Approach For Indian Infrastructure Firms
Net zero pertains to achieving a balance between the amount of greenhouse gases produced and removed from the atmosphere. It means that a net zero process or facility doesn’t contribute to the overall increase of greenhouse gases in the environment. The global momentum around net zero continues to rise as it is crucial in mitigating climate change and achieving sustainable development.
Significance of net zero in addressing climate change
The equilibrium between atmospheric extraction and greenhouse gas emissions is represented by net zero. Since these gases trap heat in the Earth’s atmosphere, causing global warming and a host of related impacts like rising sea levels, harsh weather, and diminished biodiversity, achieving net-zero emissions is crucial for fighting climate change.
To address global temperature rise to well below 2°C as per the Paris Agreement, we must achieve net-zero emissions globally by about 2050. This necessitates significantly curtailing greenhouse gas emissions across diverse sectors like energy production, transportation, infrastructure, and agriculture. Moreover, compensatory measures must be taken to counterbalance any residual emissions, by eliminating an equivalent volume of carbon dioxide from the atmosphere through natural or engineered methods, including afforestation or carbon sequestration and storage.
Realizing net-zero emissions mandates a collective global endeavour, accompanied by substantial transformations in our methods of generating and utilizing energy, transportation of goods and people, and land management practices. This process will call for rigorous policies and regulations, trailblazing technologies, and concerted efforts from governments, corporations, and citizens. Although it is a challenging and ambitious goal, achieving net-zero emissions is vital for preventing the worst effects of climate change and securing a sustainable future for everyone.
Warehousing Industry Overview in India
The warehousing sector in India has experienced rapid expansion in recent years as it transitioned from conventional warehouse models to a more sophisticated logistics and supply chain structure. India has made a significant leap in the World Bank’s Logistics Performance Index for 2023, ascending to the 38th position among 139 nations, marking a noteworthy improvement of six spots.?
A combination of essential and sophisticated initiatives, like Sagarmala and Bharatmala, have played a pivotal role in bolstering India’s logistics efficiency.This growth can be attributed to supportive government policies and increased institutional investments, with the industry set to expand even further in the coming years.The growth of e-commerce, the rise of third-party logistics, and the increased need for storage in Tier I and II cities are all factors that are advancing the industry.
Future growth in demand for warehousing and storage services is anticipated, and reliable storage and delivery of commodities depend on an effective supply chain. However, the industry’s expansion has led to increased demand for resources and energy, leaving a significant environmental footprint. By adopting net-zero strategies, Indian infrastructure companies can minimize their environmental impact while improving their competitiveness, efficiency, and adherence to government regulations.
India’s warehousing market is seen as a lucrative investment opportunity, given the growing needs of a vast consumer market and the government’s ambitious economic growth objectives. The government’s focus on raising the manufacturing sector’s share of GDP to 25% by 2025 and transforming India into a global design and manufacturing hub through the “Make in India” initiative is a significant driving force behind interest in the warehousing market. The introduction of favorable initiatives such as GST, PM Gati Shakti, and the ongoing national logistics policy has made the sector more appealing for investment. As India takes significant steps towards becoming a worldwide manufacturing and industrial powerhouse, the warehousing sector will play a crucial role as a major enabler and act as one of its primary building blocks.
The Role of Warehousing in India’s Infrastructure Development
A. Growth of the Logistics Sector in India
The logistics sector in India has witnessed remarkable growth recently due to the expanding manufacturing industry, rising e-commerce, and increased investment in infrastructure development. The expansion of the nation’s GDP and the creation of new jobs both heavily rely on this industry. In particular, the storage sector is crucial for maximising supply chain effectiveness, cutting costs, and satisfying customer and corporate objectives. The growth of the logistics sector and warehousing industry is poised to continue as the Indian economy flourishes, emphasizing the need to incorporate sustainable practices in their operations. Additionally, the Indian government’s initiatives, such as the ‘Make in India’ program and the development of industrial corridors, have fueled demand for warehousing and logistics services. Attracting global manufacturing: India’s Production Linked Incentive (PLI) scheme has successfully attracted large investments in various sectors, including mobile phone and electronic component manufacturing, which is expected to increase industrial demand and benefit the warehousing market. Approximately 61 companies in the electronics industry have set up component manufacturing plants at 111 locations across 14 states/union territories under the Production Linked Incentive (PLI) scheme.
B. The Need for Modern and Sustainable Warehousing Solutions
India’s conventional warehousing infrastructure frequently grapples with suboptimal storage spaces, inefficient energy usage, and an absence of innovative technologies. As per some estimates, about 16% of India’s agri production is wasted at different stages of supply chain. Government under NLP seeks to limit losses incurred while transporting perishables commodities to under 5%.To counter these hurdles, it is essential to adopt up-to-date and sustainable warehousing solutions, which incorporate green technologies, energy-saving designs, and intelligent building management systems. The integration of net-zero practices in warehousing can maximize resource utilization, diminish waste, and shrink the carbon footprint, ultimately contributing to a more sustainable and robust future.
A crucial advantage of modern and sustainable warehousing solutions is the potential for reduced operation and maintenance costs. By implementing energy-efficient systems, businesses can experience long-term savings and enhanced operational efficiency.
The following noteworthy points of evidence demonstrate the necessity for contemporary and environmentally friendly warehousing solutions:
In a 2022 research from Knight Frank, it is predicted that India’s Warehousing transaction volumes for the eight key markets will increase at a compounded growth rate of 19% between FY 2021 and 2026. This was off to a very strong start, with the volume growing by 62% in FY 2022, and the supply chains’ resilience highlighting the need for effective and environmentally friendly solutions.
Implementing energy-saving measures can cut warehouse energy use by up to 30%, according to research by the National Renewable Energy Laboratory (NREL).
According to a study by the Global Environmental Facility, better inventory control and storage planning can save the cost of warehouse storage by 20% to 30%.
Embracing contemporary and eco-friendly warehousing solutions offers businesses the opportunity to lower operational costs, decrease their environmental impact, and bolster competitiveness in an increasingly globalized market.
C. Government Policies and Initiatives Supporting Warehousing and Logistics
India is one of the world’s fastest growing major economy in 2023, with an anticipated GDP growth rate of 7.2% by the Reserve Bank of India. This growth is further supported by a young population more than two-thirds of whom are under the age of 35 an rising middle class, and a united domestic market. To support the logistics industry’s growth and significance, the government has introduced several policies and initiatives. The Goods and Services Tax (GST) has streamlined tax structures and facilitated the development of larger, efficient warehouses. The implementation of the GST, as well as the government’s support for the industry, led to in a considerable increase in demand for the services provided by structured logistics and storage companies. The Logistics Performance Index (LPI) assesses and improves logistics infrastructure and services. Furthermore, India’s ambition to become a regional manufacturing powerhouse, supported by the monumental USD 1.8 trillion National Infrastructure Pipeline initiative, aims to boosts investment in key sectors, including warehousing and logistics. By creating a supportive policy environment, the government encourages sustainable practices like net zero warehousing, enhancing the industry’s efficiency, competitiveness, and environmental performance.
Net Zero in Warehousing: Key Concepts, Technologies, and BOOTES Solution
A. Energy Efficiency
Implementing energy-efficient lighting solutions like LED fixtures and smart lighting controls reduces warehouse energy consumption while enhancing safety and productivity. Advanced building management systems optimize energy usage, monitor indoor air quality, and control warehouse operations. Proper insulation and ventilation maintain comfortable temperatures and decrease energy-intensive systems’ needs.
B. Renewable Energy Integration
Incorporating renewable energy sources offsets warehouse electricity consumption and lowers greenhouse gas emissions. Solar panels and wind turbines generate clean energy, while energy storage solutions store excess on-site renewable energy for use during peak demand or low production periods.
C. Sustainable Building Materials
Using green concrete and employing recycled materials reduce the environmental impact of warehouse construction while maintaining durability and strength. Warehouses built with prefabricated components minimize on-site construction waste, shorten project timelines, and improve energy efficiency.
D. Waste Management and Recycling
Implementing waste reduction measures minimizes warehouse waste materials. Efficient recycling systems contribute to sustainable warehousing operations. Embracing circular economy principles optimizes resource utilization, extends product lifecycles, and promotes material reuse and recycling.
E. Radiant Cooling
Radiant cooling systems efficiently cool warehouses, providing uniform temperatures and improving interior air quality. These systems consume less energy than conventional air conditioning systems.
F. The Bootes Holistic Solution: Achieving Net-Zero Emissions in Cold Storage Facilities
The Bootes Solution is an innovative, environmentally friendly approach to cold storage design, aimed at achieving net-zero emissions through:
1. Building Insulation and Design: Improving insulation to reduce heat transfer and maintain consistent internal temperatures.
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2. Peak Cooling Demand Reduction: Incorporating geothermal and ice storage systems to reduce peak cooling demand.
3. Radiant Cooling System: Using radiant panels on floors and walls to meet the cooling load, supported by fan coil units for dehumidification.
4. Thermal Energy Management: Optimizing energy use through thermal inertia, charging geothermal systems, and freezing water using renewable energy.
5. Solar Power Integration: Powering heat pumps, chillers, and distribution pumps with photovoltaic (PV) solar panels and utilizing batteries for peak demand control.
6. Efficient Chillers: Employing highly efficient chillers with natural refrigerants, like CO2 and propane, boasting an almost zero global warming potential (GWP).
7. Air Handling Unit with Heat Recovery: Recovering energy from exhaust air to maintain the required humidity and temperature.
8. Fan Coil Unit and Dry Coolers:Lowering the supply air temperature, evenly distributing treated air, and using dry coolers for geothermal pile loading and heat rejection.
The Bootes Solution combines innovative technologies to achieve net-zero emissions, enabling cold storage facilities to significantly reduce their environmental impact and contribute to a more sustainable future.
Benefits of Net Zero Warehouses for Infrastructure Firms and Stakeholders
A. Cost Savings through Energy Efficiency
India holds a prominent position among the world’s most promising warehousing markets, driven by its strong consumption and economic growth. The previous decade has seen a remarkable surge in this sector, thanks to government efforts such as the ‘Make in India’ campaign. Nevertheless, the logistics costs in India represent 13-17% of GDP and government under National Logistic Policy(NLP) aims to bring down India’s logistics cost to 8% in the next five year. This underscores the crucial importance of efficient intermodal and multimodal transportation networks. Net zero warehouses employing energy-conserving technologies and strategies can substantially lower operating expenses. By minimizing energy usage through advanced lighting systems, intelligent building management, and enhanced insulation, infrastructure companies can attain long-term savings, contributing to better financial outcomes.
B. Environmental Benefits and Reduced Carbon Footprint
Embracing net zero approaches in warehousing can substantially reduce greenhouse gas emissions and diminish the ecological footprint of warehouse activities.? Infrastructure businesses and stakeholders can adopt net zero warehousing methods to address environmental concerns and adhere to government regulations. This not only cuts operational expenses through energy-saving technologies and methodologies but also significantly lowers greenhouse gas emissions, supporting the global effort to combat climate change. The emergence of dark stores and multi-level warehouses, combined with the evolving nature of international supply chains, offers chances for the warehousing industry to become more sustainable and efficient.
C. Compliance with Government Regulations and Policies
Adopting net zero warehousing practices enables infrastructure businesses to meet government emission regulations, demonstrate ecological commitment, and avoid fines or legal issues.? The warehousing market, projected to grow at a 19% compounded annual rate between FY 2021-2026, offers a compelling opportunity for businesses to invest in sustainable warehousing solutions amidst a strong market rebound and regulatory compliance requirements.
D. Life Cost Cycle Analysis
To fully comprehend the long-term benefits of modern and sustainable warehousing solutions, it is essential to conduct a life cycle cost analysis. This analysis takes into account a warehouse’s total cost of ownership, which comprises the costs of construction, use, upkeep, and disposal. By evaluating these factors, businesses can appreciate the importance of lower operation and maintenance expenses and the financial advantages of eco-friendly warehousing solutions.
Key facts and figures highlighting the significance of life cycle cost analysis for contemporary and eco-friendly warehousing solutions include:
A study published in the International Journal of Sustainable Built Environment found that green warehouses can achieve energy savings of up to 50% compared to conventional warehouses, significantly reducing long-term operational costs.
According to a report by the Rocky Mountain Institute, energy-efficient warehouses could lower heating and cooling expenses by 20-50%, emphasizing the importance of sustainable design in reducing maintenance costs.
Research by the World Green Building Council reveals that incorporating sustainable building materials and construction practices can extend a warehouse’s lifespan by up to 20%, minimizing the need for costly repairs and renovations.
When considering life cycle costs, the advantages of modern and sustainable warehousing solutions become evident. Through the implementation of energy-efficient systems, smart building management, and eco-friendly construction practices, businesses can reduce operational and maintenance expenditures while minimizing their environmental impact. This approach results in a more competitive and resilient business model, which is crucial in an increasingly environmentally-conscious market.
Challenges and Barriers to Implementing Net Zero Warehouses in India
The lack of awareness and understanding of net zero concepts among stakeholders, including policymakers and infrastructure firms, may hinder the widespread adoption of sustainable warehousing practices in India. This knowledge gap can lead to misconceptions, reluctance to invest in new technologies, and missed opportunities for collaboration and innovation in the sector.
The Need for Innovative Financing Models and Government Support
Innovative financing models and government support are crucial to overcoming the financial barriers associated with net zero warehousing. This may include subsidies, grants, low-interest loans, or tax incentives for infrastructure firms adopting net zero practices. Without such support, smaller companies may struggle to invest in net zero technologies and infrastructure, while larger firms with greater financial resources may dominate the market.
Conclusion
A. The potential for net zero warehousing in India’s infrastructure landscape
The logistics chain’s efficiency is vital for firms to remain competitive in the internet age, where inventory cycle time and costs are critical. Warehouses’ roles have developed to allow inventory management, secondary packing, cross-docking, and product extraction in the shortest amount of time possible. Although the Indian storage business has expanded fast in the last five years, it still trails behind its global equivalents. In conclusion, the warehousing industry in India presents a significant opportunity for infrastructure firms to adopt net zero practices and promote sustainability. By utilizing energy-efficient technologies, renewable energy sources, radiant cooling and sustainable building materials, net zero warehouses can achieve significant reductions in environmental impact while also enhancing operational efficiency and cost savings.
B. The importance of collaboration between stakeholders
Collaboration between stakeholders, including government agencies, industry players, and local communities, is crucial to drive the widespread adoption of net zero practices in India’s warehousing sector. Working together, these stakeholders can create supportive policies, share knowledge and resources, and foster an ecosystem that promotes sustainability and innovation.
C. The long-term benefits of embracing net zero warehousing solutions
Investing in net zero warehousing solutions delivers immediate benefits in terms of cost savings and environmental performance while also ensuring long-term resilience and competitiveness for infrastructure firms. As global markets increasingly demand sustainable practices and environmental responsibility, embracing net zero warehousing can position Indian infrastructure firms at the forefront of the green logistics revolution and ensure their continued success in a rapidly evolving industry landscape.
BOOTES is at the forefront of the construction industry’s shift towards sustainable and green building practices, and in line with India’s long-term vision. Our strength has been our ability to undertake design, engineering and construction for our projects to incorporate a net zero implementation plan from the very beginning to achieve sustainable / aatmanirbhar infrastructure.
Our commitment to sustainability is re?ected in our use of cutting-edge technology and innovative construction models, which are environmentally friendly and energy-ef?cient. Some of the key methodology that we incorporate are:
With Net-Zero infrastructure, we not only deliver reduced carbon footprint, but also reduced operating costs.