Slide Number : Introduction to India’s Paper Sector

The Indian paper sector contributes around 4.7% of total global paper output, and it directly
employs 0.5 million individuals, whereas indirectly it employs over 1.5 million people1. Furthermore,
the paper industries contribute significantly to India's GDP, amounting to approximately USD 500
billion. This sector is projected to grow at a 6% CAGR with expected paper production of 39.2 million
tons by 2030. Paper clusters are energy-intensive in their operations and generally use a mix of both
modern as well as conventional technologies for their day-to-day functioning, but at the same time,
this sector holds immense potential for energy efficiency and the upgradation of technologies in
routine processes.

Indian Paper market has a share of more than 17 MT in 2019-20 of paper and growing at around 7%
per annum. As can be seen, from Figure 8, the market share of the paper products in India is given
below:

a) Newsprint has 2.58 MT of market share and growing at 2.1%.

b) Writing and printing paper (uncoated + coated) has 5.06 MT of market share and growing at 4.9%
per annum.

c) Packaging paper/ paperboard (kraft paper/ paperboard and duplex paperboard) has an 8.71MT
market share and growing at 8.4%.

d) Magazine variety/poster has 0.24 MT of market share and growing at 2% while tissue paper has
0.17 MT and growing at 17.8%. In contrast, other paper/paperboards have a 0.36 MT market share
and grow at 10.8% per annum.4

The total energy consumption of the paper sector in India was 659 Mtoe in 2015 , which is projected
to reach 1440 Mtoe by 2030

Slide Number : Summary of Obligated Entities

The Indian Micro, Small, and Medium Enterprises (MSME) sector, a critical growth engine
contributing 6% to GDP and 33% to exports, faces significant challenges in adopting energy efficiency
(EE) measures, particularly within the paper industry.

The MSME sector is a cornerstone of the Indian economy, often described as its growth engine.
Recognizing its importance, a significant portion of the government's ₹20 trillion stimulus package
has been earmarked for MSMEs. To ensure their sustainable growth and competitiveness, energy
efficiency must be mainstreamed into the national development framework.

Slide Number : Summary of Obligated Entities

Presenter Notes:

 The Big Picture: We are looking at 53 industrial units in the Pulp & Paper sector now
officially classified as 'Obligated Entities' under the new GHG Emission Intensity Target Rules.
 These units are legally required to reduce their carbon footprint per tonne of paper
produced over the next two years."

 Sub-Sector Logic: "The data is categorized by manufacturing process because carbon

footprints vary wildly based on raw materials. For instance,

 Integrated Plants These are "all-in-one" facilities that convert raw wood/bamboo into pulp
and then into paper on a single site. They are energy-intensive because they handle the
heavy-duty chemical and thermal processing of raw timber.

 whereas RCF (Recycled Fiber) Plants These plants use waste paper and cardboard as their
primary raw material. They generally have lower emission baselines because the "heavy
lifting" of creating the fibers was already done in the past.

 Agro Based Plants: These units utilize agricultural residues like wheat straw, rice straw, or
bagasse (sugarcane waste). They are vital for circularity but require specific technology to
handle the high silica content of these residues.

 Specialty Paper Plants: These produce high-value, niche products (like tissue, cigarette
paper, or medical packaging). They use specialized coatings and textures, resulting in unique
emission profiles compared to standard printing paper.

 The Target: "Our focus is on the Compliance Years 2025-26 and 2026-27. Entities that beat
these targets can earn tradeable carbon credits, while those that fail will face financial
penalties. This is the operationalization of India’s domestic carbon market.

Slide 2: Geographical Summary for Compliance

Presenter Notes:

Clustering Strategy: "Compliance isn't just a corporate issue; it's a regional one. We see massive
concentrations in specific states. Uttar Pradesh alone hosts nearly 40% of these entities, mostly
clustered in Western UP districts like Muzaffarnagar and Meerut. This makes Western UP a critical
'Green Hub' for monitoring."

Regional Specialization: "Note the regional trends: the South (Tamil Nadu/Andhra) houses the giant
integrated mills, while the North (UP/Punjab) is dominated by smaller, recycled-fiber or agro-based
plants. This distribution tells us where the infrastructure for carbon monitoring and renewable
energy transitions needs to be most robust."

Logistics Impact: "The proximity of these mills to raw material sources—like the sugar belts in UP
and Gujarat for agro-residue—is a key factor in their baseline emissions. Reducing the 'distance to
mill' for raw materials is one way these entities are aiming to hit their 2026 targets.

Slide 3: The Papermaking Journey: A Three-Act Process

The production of paper is a complex, multi-stage operation primarily divided into three core
phases: Pulping, Papermaking, and Liquor Recovery. Mills utilize a variety of raw materials, including
virgin sources like wood chips and agro-based materials (e.g., bagasse), as well as recycled fibers
from wastepaper. Within the MSME paper sector, production is dominated by kraft and packaging
paper (88%), followed by writing/printing paper (10%), with newsprint and special grade paper each
accounting for 1%.

The Pulping stage is designed to separate and treat fibers. The subsequent Papermaking process
converts the prepared pulp into a finished product. For mills using wood or agro-based materials,
the Liquor Recovery process is a critical, closed-loop system. Its primary functions are to minimize
the environmental impact of pulping by-products (black liquor), recycle essential cooking chemicals
(Sodium Hydroxide and Sodium Sulphide), and co-generate steam and power, thereby enhancing the
mill's energy efficiency.

Slide 4: From Wood Chips to Raw Pulp

The first and most fundamental stage in papermaking is Pulping. The entire goal of this process is to
break down raw materials—whether they are wood chips or recycled paper—to separate out the
valuable plant fibers. This creates a thick, fibrous slurry called "pulp," which is the essential building
block for paper.

The journey begins by preparing the raw material. Wood chips are first loaded into a Chip Bin for
pre-steaming. This step is crucial for removing air from the chips and increasing their moisture
content, which allows chemicals to penetrate more evenly later on. From the bin, the prepared chips
move into the Digester, which is essentially a large industrial pressure cooker. Inside, the chips are
cooked with a chemical solution of Sodium Hydroxide (NaOH) and Sodium Sulphide (Na2S). This
potent mixture dissolves the lignin—the natural glue that holds wood fibers together. When the
pressure is released, the chips fly apart into individual fibers, transforming solid wood into a fibrous
slurry.

Note: TPD (Tonnes Per Day) represents an operational flow rate, not a specific consumption rate per
tonne of product. This value is not directly comparable to other specific energy consumption figures
(e.g., kWh/Tonne).

While wood chips go through a Digester, recycled paper is processed in a machine called a Pulper,
which uses water to break it down into a fibrous slurry suitable for processing.

Slide 5: Pulp Purification and Preparation

Washing

After cooking, the raw pulp is mixed with leftover cooking chemicals and dissolved lignin. To create a
quality product, it must be thoroughly washed with water. This removes the residual chemicals to
prevent them from interfering with later stages.

Screening
Next, the pulp is passed through screens to filter out any unwanted physical contaminants. This
removes foreign matter like pieces of bark, dirt, or other debris to ensure a pure, high-quality pulp.

Bleaching

For products like writing and printing paper, the pulp must be white. Bleaching removes any
remaining lignin, which gives pulp its brownish color. This is a multi-step chemical process using
agents like oxygen, peroxide, and chlorine dioxide to break down and remove the last traces of
lignin.

Refining

The final step in the pulping process is Refining. Here, the pulp passes through a refining aggregate
with rotating and stationary cutters. The positioning of these elements determines the nature of the
refining action:

• Free Stock Refining: The fibers are primarily cut to a desired length.

• Wet Refining: This process causes fibrillation, which creates fine, hair-like fibrils on the ends
of the cellulose fibers.

Fibrillation is critical for paper strength. These fine fibrils interlock during sheet formation, creating a
close-knit, well-bonded connection between individual fibers that results in a stronger final paper
product.

Now that a clean, strong pulp has been created, the next challenge is to transform this wet slurry
into a uniform, dry sheet of paper.

Slide 6 From Slurry to Sheet: Formation of the Paper Web

This stage is a large-scale mechanical process where the wet pulp is formed, pressed, dried, and
finished into a continuous roll of paper. The entire sequence takes place on a massive piece of
equipment known as a paper machine.

Stock Preparation

In Stock Preparation, the refined pulp is moved to a mixing chest where various papermaking
chemicals, such as starches, dyes, and sizing agents, are added. This creates a uniform slurry, or
"stock," with the desired properties for the final paper grade. The process has a dedicated electrical
input, presumably to power the pumps and mixers required to create the homogenous stock.

Web Formation

This is the initial and most critical phase of creating the paper sheet, where a uniform web is formed
from the pulp slurry.

• Headbox The headbox is a sophisticated piece of equipment that receives the pulp stock and
discharges a uniform jet onto the moving wire. It performs five key functions to ensure a high-
quality, consistent paper web:
1. Spreads the stock evenly across the entire width of the machine.

2. Levels out any cross-currents and variations in pulp consistency.

3. Levels out velocity gradients in the direction of the machine.

4. Creates controlled turbulence to prevent fibers from clumping together (flocking).

5. Discharges the stock evenly onto the forming fabric at the correct location and angle.

• Wire Section The paper web is formed in the Wire Section. The wire is a continuous belt of
fine-mesh fabric that picks up fiber at the breast roll from the headbox. As it travels, it runs over
table rolls, foils, and suction boxes that actively remove water from the pulp slurry. It then passes
over a couch roll, where the newly formed web of fibers leaves the wire and moves on to the press
section. The wire itself continues its loop, traveling around the couch roll and under the machine to
return to the breast roll, where it receives more fiber stock for continuous operation.

Slide Removing the Water: Pressing and Drying

Water Removal and Sheet Consolidation

After initial formation, the paper web is still mostly water. The next sections are dedicated to
removing this water mechanically and thermally to consolidate the sheet.

 Press Section From the wire, the fragile web is transferred to the Press Section. Here, it is
conveyed by felts through a series of large, heavy rollers that mechanically squeeze water
out of the sheet. This wet pressing is a strategically vital step, as it significantly increases the
sheet's dryness. This not only ensures the dryer section has adequate capacity but also
improves the web's runnability, reducing the risk of breaks.

 Dryer Section The paper web then snakes through the Dryer Section, which consists of a
long series of cast iron, steam-heated cylinders. These cylinders are coded for steam
pressures of 250-750 kPa. The heat transferred from the cylinders evaporates the remaining
water in the sheet, bringing it to its final moisture content.

Slide Finishing and Winding

Finishing

The final mechanical treatments are applied to determine the paper's surface properties and
prepare it for distribution.

 Calendar Section After drying, the paper passes through the Calendar Section. This consists
of a stack of hard, smooth rolls that apply pressure to the paper. Unlike the press section,
which is for water removal, the calendar's purpose is to provide an "ironing effect." This
process finishes the paper surface, controlling its smoothness and thickness.

 Pope Reel Section Finally, the finished paper is wound onto a large reel spool in the Pope
Reel Section. This equipment uses a set of primary arms to position an empty spool and
secondary arms to press the spool against the pope reel with controlled force. As the spool
 fills, the secondary arms push the full reel into its final position, where it is braked using
levers and hydraulic shock absorbers before removal.

With the creation of a finished paper product complete, we now turn to the parallel process that
ensures the sustainability and economic viability of the entire operation: the recovery of chemicals
used in the initial pulping stage.

Slide From Black Liquor to Biofuel

The liquor recovery cycle is designed to achieve three primary goals:

 Minimizing the environmental impact of waste material (black liquor).

 Recycling pulping chemicals (NaOH and Na₂S).

 Co-generating steam and power.

3.2 Black Liquor Concentration and Combustion

The recovery process begins with the weak black liquor from the digester, which is rich in dissolved
lignin and spent cooking chemicals.

 Evaporator The black liquor is first sent to a series of Evaporators. Their function is to
concentrate the weak black liquor from an initial consistency of approximately 15% dry
solids up to 70-85% dry solids. This removes a significant amount of water, making the liquor
suitable for efficient combustion. During this process, volatile compounds are released from
the black liquor and separated from the condensate, which is then collected for future use.

 Recovery Boiler The concentrated black liquor is then introduced into a Recovery Boiler,
where it is combusted. This achieves two objectives simultaneously: the inorganic fraction of
the liquor is recovered as molten sodium compounds, and the heat generated from burning
the organic lignin fraction is used to produce high-pressure steam for electricity generation
and process heating throughout the mill.

Slide : Re-Causticizing: Regenerating the Cooking Chemicals

The molten inorganic compounds from the boiler (green liquor) are then regenerated back into
active cooking chemicals (white liquor) through a process known as causticizing. This is a sequential,
multi-step operation:

1. Green Liquor Clarification: The process begins with the clarification of the green liquor to
remove insoluble impurities, known as dregs.

2. Slaker & Causticizer: The clarified green liquor is mixed with lime (Calcium Oxide, CaO) in a
tank called the Slaker. A chemical reaction is initiated where the lime activates the
conversion of sodium carbonate (Na₂CO₃) in the green liquor into sodium hydroxide (NaOH),
the primary active ingredient in white liquor. To ensure this reaction goes to completion, the
liquor then passes through a series of agitated tanks known as Causticizers.
 3. Clarifier: The output from the causticizers is a slurry containing white liquor and a
precipitate of lime mud (Calcium Carbonate, CaCO₃). This slurry is sent to a White Liquor
Clarifier, where the lime mud is allowed to settle out, leaving the clear white liquor to be
drawn off from the top.

4. Lime Kiln: To create a fully closed loop, the recovered lime mud is sent to a Lime Kiln. The
kiln calcines the lime mud (CaCO₃), heating it to drive off carbon dioxide and convert it back
into quicklime (CaO). This regenerated lime is then sent back to the slaker for reuse in the
causticizing process.

White Liquor Storage and Reuse

The clear, regenerated white liquor from the clarifier is moved to a White Liquor Storage tank. From
here, it is ready to be recycled back to the digester for use in cooking a new batch of wood chips.

Slide : A system View of energy consumption

 Highest Electrical Consumption: The Pulp Processing (Washing & Screening) stage exhibits
the highest quantified demand for electricity, at approximately ~140 kWh/Tonne. This figure
is driven by the extensive mechanical equipment needed to wash, screen, and transport
large volumes of pulp slurry to ensure final product quality.

 Highest Thermal Consumption: The Paper Machine is the undisputed leader in thermal
energy demand, consuming 2 Tonnes of Steam per Tonne of Production. This confirms that
the evaporation of residual water from the paper web is the most thermally demanding
operation in the entire lifecycle.

Slide Energy Inefficiency is Limiting the Sector's Potential

While governments globally are implementing policies to reduce energy use and GHG emissions to
meet climate commitments, these measures also serve to bolster economic efficiency and energy
security. In India, frameworks such as the Energy Conservation Act 2001 and the PAT scheme for
large industries exist, but they have not sufficiently addressed the unique challenges within the SME
paper sector. The low adoption of EE technologies and best practices—such as installing VFDs, using
energy-efficient agitators, and implementing energy monitoring—necessitates a targeted and
integrated policy approach to unlock the sector's full potential.

Slide Three Core Barriers

The MSME paper sector faces a complex set of interconnected obstacles that span technical,
financial, and human resource domains.

Technical Barriers

 Limited awareness of Energy Efficiency (EE) technologies and practices: Many MSMEs lack
information about modern, energy-efficient equipment and Best Operating Practices, such
as replacing centrifugal screens with pressure screens, installing energy-efficient agitators,
or adopting Variable Frequency Drives (VFDs).
  Lack of access to EE technologies and services: Even when aware, firms often struggle to
procure advanced technologies and find qualified service providers for installation and
maintenance.

 Poor knowledge sharing among industry clusters: Valuable operational insights and
practical experiences with new technologies are not effectively disseminated among
enterprises within the same industrial cluster.

Financial Barriers

 Higher initial cost of energy-efficient technologies: The upfront capital investment required
for EE equipment is often a significant deterrent for MSMEs, which typically operate with
tight financial constraints.

 Difficulty in accessing loans and the higher cost of finance: MSMEs face challenges in
securing affordable financing for technology upgrades, often due to perceived risks by
financial institutions and a lack of collateral.

Skill Barriers

 Limited availability of skilled operators and technicians: There is a notable shortage of

personnel trained to operate modern EE equipment and properly implement Best Operating
Practices, which limits the potential energy savings that can be realized.

Slide The Solution: An Integrated Policy Package

These interconnected barriers create a significant obstacle to progress, locking many MSMEs into a
cycle of high energy consumption, elevated operational costs, and increased environmental impact.
Overcoming this requires a comprehensive, multi-pronged policy solution that addresses each of
these challenges in a coordinated manner, establishing a robust strategic architecture for change.

Integrated Policy Package" as the core strategic response. This framework is designed to
systematically dismantle existing barriers by integrating five distinct but complementary policy
mechanisms. Together, these pillars create a robust and supportive ecosystem that incentivizes,
enables, and mandates the adoption of energy efficiency across the MSME paper sector.

Slide Policy Package: Recommended Instruments both the slides

1. Regulatory Instruments This pillar creates a strong, direct push for the adoption of specific
EE technologies and practices. It moves beyond voluntary measures by establishing
structured mandates, expanding national programs like the PAT scheme, and promoting the
regulated uptake of key technologies such as biofuels, cogeneration, co-processing, and
shared renewable infrastructure like solar parks.

2. Informatory Instruments This pillar focuses on building technical capacity and

demonstrating best practices by creating shared physical infrastructure. Its primary
instrument is the formation of cluster development centers, which will serve as hubs for
technology demonstration, skill development, and testing facilities, directly addressing the
knowledge and skill gaps at the local level.
 3. Financial Instruments This pillar is designed to create a viable market for EE technologies by
directly mitigating the financial barriers faced by MSMEs. By providing access to soft loans
and promoting innovative de-risked financing models like cluster-level Energy Service
Companies (ESCOs), these instruments make energy efficiency an economically attractive
and achievable investment.

4. Market-Based Instruments This pillar leverages the forces of supply and demand to drive
energy efficiency improvements in the most cost-effective manner. Instruments like
emissions trading schemes and carbon pricing create powerful financial incentives for
reducing energy consumption and emissions, allowing the market to identify the most
efficient pathways to decarbonization.

5. Institutional Framework Instruments This pillar creates the necessary organizational and
support structure for the deep and sustained penetration of EE initiatives. By strengthening
the roles of State Designated Agencies and local MSME associations and building a future
pipeline of skilled talent through educational reform, these instruments provide the
essential guidance and on-the-ground support required for effective implementation.

Slide Phased Approach to National Implementation

Phased Implementation Roadmap: Strategic Initiatives and Timelines

The strategic importance of a phased implementation cannot be overstated. A progressive rollout

ensures that foundational capacities are built before more complex policies are introduced, allowing
for iterative learning and adaptation. This roadmap categorizes initiatives into short, medium, and
long-term horizons to ensure a manageable, progressive, and impactful deployment of the
integrated policy package.

Short-Term Initiatives (Within 3 years)

 Promotion of Energy Management System (EnMS) standards: Fostering a culture of

continuous energy performance monitoring and improvement, directly addressing the lack
of awareness and poor knowledge sharing.

 Increase in biofuel usage in clusters: Encouraging the switch to more sustainable fuel
sources to reduce the carbon footprint of thermal energy generation.

 Use of Microturbines in clusters (Cogeneration): Promoting high-efficiency combined heat

and power generation to maximize the energy value derived from fuel inputs.

 Soft loans for EE technologies: Easing the financial burden of technology upgrades by
providing access to concessional financing, directly addressing the core barriers of high initial
costs and difficulty in accessing loans.

 Increase the participation of State Designated Agencies (SDA): Decentralizing and

strengthening program implementation by leveraging state-level institutional capacity to
overcome barriers of access and knowledge.
  Enhance the role of MSME associations: Leveraging local industry bodies to drive adoption,
build trust, and address the challenge of poor knowledge sharing within clusters.

 Introduce Paper curriculum in Engineering colleges: Building a future pipeline of skilled

talent to directly combat the long-term barrier of limited availability of qualified operators
and technicians.

Medium-Term Initiatives (3 to 5 years)

 Widening of the PAT scheme to include Paper units: Expanding a successful energy
efficiency trading scheme to the MSME sector, creating a structured incentive for
continuous improvement.

 Plastic waste to energy boiler for paper mills (Co-processing): Creating value from waste
while reducing fossil fuel dependency and addressing environmental challenges.

 Promotion of Paper recycling: Supporting circular economy principles to reduce the energy
intensity of raw material processing and improve resource security.

 Formation of cluster development centers: Creating shared infrastructure for technology

demonstration, skill development, and testing, directly targeting technical and skill-based
barriers.

 Adoption of energy-efficient technology through cluster-level ESCOs: Introducing

innovative financing and implementation models to overcome the high initial cost of EE
projects for individual MSMEs.

Long-Term Initiatives (More than 5 years)

 Promotion of electrification of boilers: Transitioning away from fossil-fuel-fired boilers

toward cleaner electric alternatives as a long-term decarbonization strategy.

 Setting up Solar Park in clusters: Facilitating large-scale adoption of renewable energy by

overcoming the land and capital constraints faced by individual units.

 Emission trading scheme: Establishing a national cap-and-trade program to create a market-

based mechanism for limiting industrial emissions.

 Carbon pricing: Implementing the "polluter pays principle" to provide a powerful, economy-
wide incentive for deep decarbonization.

Executing this ambitious roadmap depends entirely on the clear allocation of responsibilities and the
coordinated action of accountable actors across the public and private sectors.

Slide Strengthening the Institutional Framework

While national agencies like the Bureau of Energy Efficiency (BEE) play a crucial role in setting
standards, a key strategy in the proposed plan is to empower local organizations. The current model,
where programs are driven from the center, makes it cumbersome to manage over 400 SME
clusters, many of which are in remote areas.
The proposed solution shifts the focus to deeply involving local MSME associations and State
Designated Agencies (SDAs). These bodies are closer to the businesses on the ground and can drive
change more effectively because they operate within existing community structures. This approach
leverages human relationships and pre-existing trust to accelerate the adoption of new technologies
and practices.

As the policy report highlights, this local-first strategy is powerful because of the unique position
these associations hold:

"MSME associations tend to enjoy the greater trust of the member enterprises, on basis of which it
is easier to change behavioral patterns and perceptions to drive energy efficiency measures."

Slide Driving Technical Adoption and Financial Access

SME units often lack consistent data on energy use and do not monitor key performance indicators.
Implementing EnMS (e.g., ISO 50001) will help integrate energy performance into daily
management, enabling units to monitor usage, set targets, measure results, and continually improve
efficiency.

• Action Point: BEE should develop a program to support pilot SME units in implementing
EnMS.

• Stakeholder Responsibilities:

o BEE: Develop the implementation program for EnMS.

o Cluster Associations: Actively promote EnMS uptake among member units.

o Technical Consultants: Provide services for EnMS implementation.

To directly tackle the financial barrier, the integrated plan proposes a creative and powerful
solution: establishing cluster-level Energy Service Companies (ESCOs). This model fundamentally
changes the financial calculation for a small business owner considering an efficiency upgrade.

Here is how the model works in simple terms:

• Local "mini-ESCOs" are created within the industrial clusters.

• These ESCOs manage the implementation of proven, high-impact technologies, such as

installing energy-efficient agitators or replacing centrifugal screens with modern pressure screens.

• Crucially, the ESCO provides and installs this equipment at "no upfront cost from the SMEs."

• The ESCO is then paid back over time directly from the energy savings generated by the new
equipment.

This approach is a game-changer. It reduces the financial burden on individual businesses, lowers
equipment costs through bulk purchasing for the entire cluster, and promotes high energy savings. It
effectively turns a complex capital investment problem into a simple operational decision