New coal mines add question mark to India’s climate commitments

Along with a major expansion of renewable energy, India is also pushing for big increases in its coal production, casting doubt on its climate commitments.

As of 2022, 65 per cent of India’s CO2 emissions are from coal, and India’s rapid expansion of coal mines and plants might complicate the road to India achieving its ambitious climate goals. Image: , CC BY-SA 3.0, via Flickr.

At COP28, on 9 December, India’s environment and climate change minister Bhupender Yadav affirmed the country’s “trust and confidence” in the Paris Agreement, whilst highlighting the country’s achievements in emissions reduction.

But this announcement was seemingly at odds with another made just three days earlier, when coal minister Pralhad Joshi confirmed that India intends to increase production for the fossil fuel.

Two weeks later, Joshi told the consultative committee meeting of the coal ministry that seven rounds of coal mine auctions had been completed and another two were ongoing. Within these rounds, 91 mines have been successfully auctioned, representing a maximum annual production capacity of approximately 221 million tonnes.

In the accompanying document, Joshi states: “Overall, large numbers of mines are under development to meet the domestic coal demand.”

In its Nationally Determined Contributions (NDCs), updated in 2022, India has made three major promises: a 45 per cent reduction in its carbon emissions intensity (CO2 emissions per unit of electricity) based on 2005 levels, by 2030; 50 per cent of installed electricity coming from non-fossil-fuel sources by 2030; and national carbon neutrality by 2070.

On the same day at COP28, the Indian government submitted its third “National Communication” to the UN Framework Convention on Climate Change (UNFCCC). In its executive summary, there is a curious formulation: “India’s emissions are likely to increase in line with growing energy demand and overall development, eventually reaching the envisioned goal of net-zero emissions in 2070.”

But, as of 2022, 65 per cent of India’s CO2 emissions are from coal, and India’s rapid expansion of coal mines and plants might complicate the road to India achieving its ambitious climate goals.

There will be complexities along the way [to net-zero], but the Indian government and the private sector are actively adopting new technologies and policies to drive down emissions.

Bharath Jairaj, energy programme director, World Resources Institute India

Enhanced coal production

Despite the landmark 2015 Paris Agreement, which committed the countries of the world to lower carbon emissions, India has seen no need to reduce coal use. This is despite the fact that emissions for coal – largely by China and India – have been the biggest driver of recent carbon emissions, accounting for 40 per cent of the total in 2021. As the mainstay of its energy supply – thermal power plants (coal, oil and gas) supply 56 per cent (239 GW) of the country’s total installed electricity – coal remains crucial for Indian energy security. To boost domestic supply rather than be reliant on coal, India has aggressively expanded its coal mines.

In a written reply to parliament in August 2023, the coal minister stated that a “major leap in coal production over the years has been witnessed”. From 2013 to 2014, Indian coal production was 565 million tonnes; from 2022 to 2023, that had increased by 58 per cent to 893 million.

According to India’s 2023 National Electricity Plan, the country’s 2026-2027 domestic coal requirement will be an estimated 866.4 million tonnes, rising to 1.025 billion tonnes by 2031-2032. On 18 December, the coal minister told parliament that domestic coal production is expected to grow by 6-7 per cent annually and reach approximately 1.5 billion tonnes by 2029-2030.

Is forest cover the panacea?

The Third Pole asked Sanjay Kumar, chief policy advisor for the international legislator network Climate Parliament, whether India’s large increases in coal production and consumption are at odds with its NDCs.

Kumar, a former director general of forests for India, sees no contradiction between the two pursuits. He believes India has not wavered in its commitment to meeting the 2030 and 2070 climate goals, and that it is more accurate to view India’s approach as strategic adaptation to the complex balance between energy needs and climate change.

“This [trade-off] demonstrates a proactive approach, as the nation actively pursues renewable energy sources [and] energy efficiency measures over a wide range of sectors and cleaner energy technologies,” says Kumar. India has “[balanced] its economic needs with its environmental responsibility” by continuously increasing its forest and tree cover over the past few decades – one of the few countries where this has been seen, he adds.

The country has tried to tout its credentials in other climate-friendly areas throughout the years. Expansion of forest cover for carbon sequestration is one of the key net-zero strategies that India’s third National Communication to the UNFCCC identifies. The communication cites a 2021 report from the Forest Survey of India which claims the country’s forest cover has expanded.

However, a closer look at how India measures its forests has revealed a host of issues. For example, plantations are classified as forests, which researchers have criticised as a loophole created to achieve compliance with climate goals. Furthermore, in July 2023, India passed a new law that has made it easier to clear forests, including for coal mines.

On-the-ground research in states like West Bengal suggests that weak regulation and enforcement mechanisms allow deforestation to continue apace – in contrast to the rosy picture painted by the government.

The necessity of fossil fuels

In Yadav’s COP28 statement, the climate change minister says India has successfully reduced its greenhouse gas emissions intensity “vis-à-vis its GDP 33 per cent between 2005 and 2019”, and “achieved 40 per cent of installed electricity generation capacity through non-fossil-fuel sources”. These updates mean India is well on its way to fulfilling its NDCs.

But they do not necessarily mean that India is on track to meet its 2070 goals of carbon neutrality. According to a report by the environmental think-tank Ember, India is one of six G20 countries (the world’s 20 largest economies) in which per capita coal power emissions increased between 2015 and 2022, experiencing a 29 per cent increase in seven years. Additionally, the report states that like China, India “is experiencing rapid electricity demand growth, which is outpacing even the massive renewables expansion in recent years.”

It is, though, worth noting that despite this increase, India had the lowest per capita emissions among G20 countries according to the Climate Tracker 2022 report, and less than a third of the average of all G20 countries.  

“There will be complexities along the way [to net-zero], but the Indian government and the private sector are actively adopting new technologies and policies to drive down emissions,” Bharath Jairaj, who directs the World Resources Institute India’s energy programme, told The Third Pole.

Highlighting the Indian steel industry’s recent emissions-reduction success, Jairaj emphasises the effectiveness of such initiatives: “Since announcing the 2070 goals, the steel industry has been encouraged to not only produce more steel, but also to integrate emissions-reduction strategies into their operations.”

However, a September 2023 analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) indicates that steelmaking in India, which accounts for 12 per cent of the country’s total CO2 emissions, has a carbon intensity of 2.55 tonnes of CO2 per tonne of crude steel (tCO2/tcs) – significantly higher than the global average of 1.85 tCO2/tcs.

IEEFA also predicts that Indian steel’s CO2 emissions will “double at an exponential rate by 2030”. And while green hydrogen technology is currently considered a credible way to reduce the carbon intensity of steelmaking, its cost means this option is inaccessible to India before 2050, the analysis notes.

“Fossil fuels remain necessary”, Jairaj says. “Transitioning to a renewable energy-based economy will not happen overnight.”

Time for longer-term thinking

Trupti Mishra is a professor at the Indian Institute of Technology Bombay who specialises in the economics of pollution and climate change. She believes India is on track to meet its 2030 NDCs, even as its per capita coal power emissions rise. Mishra told The Third Pole that India has progressed well in expanding its renewable energy capacity, and that lowering the carbon intensity of its overall emissions is not the challenge.

But India must be serious about moving beyond coal if the country is to achieve net zero by 2070, she says, stressing that the plan for the phase-out of coal – and its details – are important. “It should not be at [an] aggregate level; rather, some regional-level planning is required to identify the scope for phasing out [coal plants] and the timelines,” she adds.

India’s “ambitious” updated NDCs are a successful “balancing act [of mitigation] and economic growth requirements”, Mishra says. But she notes that there is “great scope” for improvements, recommending the restricting of finance for fossil fuel projects, greater infrastructure support for clean energy, better implementation of policies, and sector-specific approaches that sufficiently deal with on-the-ground realities.

Banks fall in line to finance coal

It seems that banks have also been drawn into India’s push for coal production expansion. In July 2022, the Reserve Bank of India, the country’s central bank, issued a discussion paper on banks’ exposure to climate risks. A year later, a Reuters report claimed banks were growing reluctant to fund coal mine operations, and that only one bank – the Kerala-based Federal Bank – was funding coal mines at the time. This could become an important market mechanism for steering India away from coal investment.

Yet a note issued by India’s coal ministry in October 2023 demonstrated it was seeking to reverse this trend, revealing it held a “Funding of Commercial Coal Mines in India” stakeholder consultation, which included mine owners and bank officials.

In the note, the ministry says banks are willing to finance coal mines and are setting up branches dedicated to that endeavour. “The State Bank of India has extended financial assistance for the development of one commercial coal mine, and others are [in] the process of doing the same,” it stated.

This story was published with permission from The Third Pole.

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