The Cost of India’s Crop Waste Burning

After years of stumbling about on developing a compliance-based carbon market, India seems to finally be getting serious on reaching that goal.

Last month, that meant drafting key emissions targets for more than 460 industrial units in sectors that are among the country’s chief polluters — aluminium, iron and steel, petroleum refining, petrochemicals, and textiles.

The rules, though still in draft stage, are significant as they set out legally binding requirements for these units to cut their greenhouse gas emissions per unit of output over time. If they are unable to do so, they will need to compensate by purchasing carbon credit certificates from the Indian carbon market. And if they fail to do that too, they will be liable to pay hefty fines.

Whether or not the rules will go through, and if they will be strong enough to start reining in emissions from the world’s third-biggest greenhouse gas emitter, remains to be seen. India has moved at a snail’s pace to tackle its emissions so far. Policy initiatives to do so have often been mired in controversy and even failed to solve problems that have hobbled the growth of necessary industries such as renewables and electric vehicles.

A critical example of such policy gaps is the yearly problem of stubble burning. The ages-old practice involves India’s farmers — particularly in northern states — burning an enormous amount of crop residue just before the onset of fall to make way for sowing new seeds. But every year that activity turns many northern Indian cities, including the national capital New Delhi, into a cauldron of toxic gases and pollutants.

A new study by a group of researchers from Europe’s Paul Scherrer Institute and Indian Institutes of Technology in Kanpur and Delhi finds that these fires are the main cause behind the thick toxic smog that suffocates north India between September and November. The pollutants these fires emit, including particulate matter (PM2.5 and PM10), carbon monoxide and methane, react together to form the smog that persists over the region throughout the dry winter months. Residents in the region regularly wake up to largely unbreathable air reeking of a burnt smell throughout the winter.

Mind you, the stubble burning is in no way solely responsible for the toxic air over the region, but in the months that it is done, it is significant enough to surpass the pollution from traffic and industrial activity. Researchers on the study say that between October and December, smoke from crop fires lead to at least a third of the premature deaths caused by PM2.5 exposure in Delhi.

Now, while it’ll be easy to squarely put the onus of the problem on the farmers — most of whom are poor and marginalised — the problem is far too intricate and requires sustainable policy measures. India has already banned the practice of stubble burning, with fines as high as 30,000 rupees ($350). But penal measures such as these are nearly impossible to enforce considering they require the policing of thousands of fires in most states.

It’s also unfair to expect farmers to simply adopt newer technologies, considering their earnings remain some of the lowest in the country. According to the Indian government’s own disclosures, the average income of an agricultural household is less than 11,000 rupees ($128) a month. Meanwhile, the costs of the fuel and machinery required to actually remove stubble are so high that some farmers say it’s cheaper to just pay a fine and continue burning stubble so as to quickly begin the process of sowing new crops.

And that… brings us back to carbon markets. If India truly wants to become serious about growing its carbon markets it could give its farmers an elegant solution to the stubble problem. One that could turn their waste into a source of wealth in more ways than one.

A price tag on stubble

Amid all the challenges, it is easy to miss that stubble can actually play a crucial role in India’s climate policy. For one, stubble is a great source of biomass and can take the role of providing a significant amount of renewable energy. It is also far more than just garbage that needs to be burnt — with a potential to be turned into a source of nutrition for crops and soil.

These benefits can be unlocked if India can link stubble recovery to carbon markets. One key instrument to this link is biochar, a charcoal-like substance created by burning agricultural waste or waste wood in the absence of oxygen, often through a process called pyrolysis. This process is capable of not only sequestering carbon for hundreds of years but also returning it into soil and improving its nutrition density when added to farmland.

This biochar can also be sold on the voluntary carbon market in the form of credits, to be purchased by other industries or countries that are unable to meet their emissions targets. Effectively, it can become a sustainable source of additional income for farmers and improve their productivity.

The benefits of biochar have not been lost on firms in India. Last year, Indian steelmakers Sail and Tata Steel said they had begun using biochar instead of coal at some plants to cut emissions. In the farming space, American snack-maker PepsiCo, has been running a biochar-based crop residue management program in Punjab state, where more than 35% of the workforce are engaged in agriculture. The company sets up pyrolysis kilns for farmers to help them produce biochar.

Meanwhile, in April, three Indian firms said they were partnering to create the country’s “largest biochar based carbon credit platform”. Elsewhere, startups like Takachar are innovating to provide farmers portable machines to create biochar and earn carbon credits from the process. The firm won $1 million from Elon Musk-backed XPrize for carbon removal. Meanwhile, in January, Google inked the world’s largest biochar carbon removal deal with Indian startup Varaha.

Earlier in May, a top Indian minister also called on farmers to use biochar — describing it as ‘black gold' — to improve yields and improve incomes.

Aside from biochar, simple sustainable farming is also enough to earn farmers carbon credits — a development that has motivated many to change their methods. But this transition too has been fraught with issues. For instance, a study last year found that over 99% of farmers who participated in emissions reduction projects under the voluntary market did not receive any monetary benefits.

Other issues keeping farmers from turning to sustainable or ‘carbon’ farming include a lack of transparency in the pricing of credits, lack of awareness about the methodologies that make them work and keep them compliant and an increasing problem of credibility. For instance, credits from Indian agriculture have shrunk since 2023 since many were deemed as "phantom credits" that did not represent genuine carbon reductions. Experts also note that often the lion’s share of the money generated from credits is “eaten up” by middlemen.

To truly make its carbon markets a success, India will need to undertake the herculean task of addressing each of these challenges. But doing so could bring with it a huge boost to its net zero targets, and even more so for its economy. India’s ongoing carbon farming initiatives alone have the potential to generate $256 million worth of credits, the Indian Council of Agricultural Research estimates.

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