Decarbonization of Micro, Small and Medium Enterprises through Circular Economy Approaches: An Exploratory Study of Uttar Pradesh

Micro, Small and Medium Enterprises (MSMEs) are central to Uttar Pradesh’s economy but contribute significantly to emissions due to thermal energy dependence, outdated processes, and linear material flows. This study explores how Circular Economy (CE) strategies can enable MSME decarbonization using an exploratory design that combines literature review, scenario building, stakeholder consultations, and indicative lifecycle assessment (LCA). We first profile MSME clusters and high-emission activities across textiles, leather, ceramics/brick kilns and agro-processing, then synthesize barriers and opportunities for CE adoption. We examine the policy landscape (e.g., ZED, PAT, NAPCC) and identify gaps in implementation, finance, and technology access for MSMEs. Findings indicate that resource efficiency (waste heat recovery, cleaner furnaces), circular material loops (remanufacturing, recycling), industrial symbiosis, and renewable integration can materially cut emissions and costs while improving resilience and competitiveness. We propose a state-level roadmap: targeted green financing, cluster-level pilot demonstrators, capacity building, and stronger regulatory and market incentives, supported by stakeholder coalitions (government, industry associations, finance, technical agencies). The study provides an actionable foundation for integrating CE into MSME decarbonization in Uttar Pradesh and supports India’s net-zero ambitions.