‘Need to create biofuel supply chains to replace coal in textile mills’: Shahi Exports’ Anant Ahuja

This is our third year publishing a sustainability report. Shahi is a privately-held company, so a lot of the compliances that public companies have to meet don’t apply to us. But we still decided to publish this sustainability report because the customers we work with, there’s an advantage to providing them the data. Secondly, it helps set our targets and track our progress. It’s a good discipline to have. We’re following the GRI (Global Reporting Initiative) guidelines, but because of the shifts in the legislative landscape, we’re also now reporting on traceability and due diligence, things that weren’t on the radar before.

Shahi’s mills and factories sourced 65 per cent of their electricity from renewables in FY24, targeting 100 per cent by FY27. How is your renewable energy mix structured, and what shaped these choices?

It’s almost all solar, we have some wind capacity as well. They’re all off-site solar installations or solar farms. People say, why don’t you just put solar panels on your rooftops. A lot of companies do that and it makes sense, but first you have to build your structure with the capacity to hold the weight of the solar panels. The other problem is uneven generation of power. Also, where we choose to set up our factories is determined by the availability of workers. But when you’re setting up solar, it’s kind of the opposite. You set it up in places where there is a lot of sunshine, but also a place where the land is not being used for something else. So the strategy that’s worked for us is off-site solar on the electricity side.

A majority of Shahi’s on-site energy generation is in the form of thermal energy generated by burning coal. How do you see this evolving?

Most industries use some form of thermal energy. For us, it’s for our boilers. It’s not a big deal if you’re in a factory that’s just making clothing. But if you’re making fabric, then you probably need a boiler for the purpose of processing. Thermal energy usually requires burning something. It’s been coal for the last 100 or so years. Now, the solution that people are moving to is biofuel or biomass. Globally, there’s a commitment to eliminate coal by 2030 for OECD countries and by 2040 for non-OECD countries. If you’re an exporter working with the large brands that we work with, a lot of them are saying let’s not wait till 2040. They expect us to do it sooner, like 2025, which is not even the 2030 OECD timeline.

It’s a bit surprising that they would try to accelerate it to that extent. It’s a challenge because coal supply chains have been around for hundreds of years, whereas biofuel supply chains don’t exist. Even when we figure out how to create this biomass supply chain, you’re still burning organic waste. It’s still some emissions.

In the long-term, what is going to be the way forward to replace both coal and biofuels? How are electric boilers as an alternative?

We did a study on whether we could switch to electric boilers with energy storage and full electrification. With current technology, the study concluded that the ROI was around 40 years. Basically, what that told us is that the technology is not there yet for us to electrify our whole system. But there’s also a pressure to get off coal quickly. What’s going to happen is, next year is going to be focused on eliminating coal as much as possible. Ideally, 100 per cent. That’s what we’re targeting. Once we do that, we immediately think of a longer-term solution to stop burning biomass also.

The textile industry is heavily water-intensive. What’s your approach to water recycling?

The cost of getting fresh water might exceed the cost of just treating the water, that’s the reality we’re heading towards. Our largest textile mill is in Shimoga, Karnataka and over there, the laws are really strict around what you can discharge. If you want to essentially discharge water and then get fresh water, that water has to be treated almost fully. That standard is not common around the world, but because we’ve been operating there and that’s the rule, we’ve had to invest a lot in treatment plants, through which we now have zero discharge of any chemicals. As a group, we’re recycling somewhere close to 80 per cent water and the goal obviously is to get to 100 per cent.