Navigating The Coal Challenge: India’s Push for Climate Action
India has made strong progress in renewables and climate initiatives, but aligning fully with global 1.5°C goals will require clearer targets, reduced coal dependence, and stronger policy action
As of 2024, India is the world’s most populous country. In 2023, IQAir ranked India as the third most polluted nation by PM₂.₅ levels, but the ranking slipped to fifth place in 2024, according to the same report.
The data said that out of 138 countries, Chad, Congo, Bangladesh, Pakistan, and India had the dirtiest air, as per the data analysed from 40,000 air quality monitoring stations. India had six of the nine most polluted cities, with the industrial town of Byrnihat in northeastern India being the worst.
As one of the prominent parts of the Paris Agreement, India has made promises and environmental goals, including cutting down the amount of pollution created for every rupee of GDP by 45% from 2005 levels by 2030, and also aims to get half of the energy from clean resources, non-fossil fuel sources by the same target year, as published in the PIB reports.
While India has made notable progress in the renewable sector and is still expanding it by launching different schemes such as subsidies and in-house manufacturing solar module and solar cell mandates, the Climate Action Tracker (CAT) says India’s initiatives are 'Highly Insufficient' to meet the 1.5°C goal of the Paris Agreement. Although we are doing well with solar and wind power, our dependency on coal for energy is still high.
The country has seen a steady increase in renewable energy deployment, with non-fossil energy sources like solar, wind, and hydropower accounting for 46% of the country’s total installed capacity as of 2023. The National Electricity Plan (NEP) 2023 has big goals. It wants 57% clean energy by 2026–27 and 66% by 2031–32. We were the fourth biggest country in adding renewable energy. Only China, the U.S., and Germany were ahead in 2023. Spending on clean energy projects grew by 83% in 2023–24. It reached about USD 16.5 billion. The government helped with subsidies and import taxes to support local solar makers. It also gave viability gap funding (VGF) of USD 893 million to support offshore wind projects.
Policies On The Go
India’s Nationally Determined Contributions (NDCs) contain producing an additional carbon sink of 2.5–3 billion tonnes of CO2 equivalent through forest and tree cover by 2030. Reflecting our progress in afforestation and conservation efforts, we have already achieved an additional 1.97 billion tonnes in 2022 from 2005.
Through streamlining of administrative processes with fiscal incentives and mandated minimum renewable purchase obligations for power distribution companies, we are set to increase from 24.6% in 2023 to 43.33% by 2030. The NEP 2023 also supports battery energy storage systems (BESS) and pumped storage projects to enhance grid reliability and integrate renewables.
Prime Minister Narendra Modi’s “Lifestyle for Environment” campaign encourages eco-friendly habits to fight climate change. The country is ranked10th in the 2024 Climate Change Performance Index (CCPI) , which shows good progress in clean energy and low emissions per person. However, the Climate Action Tracker still rates our climate plans as “Highly Insufficient” because the country depends too much on coal.
India’s 7% GDP growth (2008–2018) led to rising energy demand—from 19.5 to 23.3 gigajoules per capita. Heatwaves have further boosted electricity needs, especially for cooling. The government ramped up coal and gas use, notably in 2023, to meet the demand. With over 70% of electricity and 77% of total energy from coal, India remained coal-heavy in 2023. It’s the world’s second-largest coal producer and consumer, hitting one billion tonnes domestically and importing record amounts. Government support for mining expansion, subsidies, and tax incentives for coal—eight times higher than those for renewables—signal a continued commitment to this fossil fuel. India’s coal sector enjoys strong financial backing. Though a coal cess began in 2010 for clean energy, it was redirected in 2017 for GST compensation.
Coal India Ltd. gets $2B annually, and coal plants benefit from tax breaks and cheap land, far outweighing support for renewables and slowing the clean energy shift. Growth in coal capacity in India is expected to see a rise from 200GW to 266GW by 2030, with the addition of 35GW in the next five years. Instead of worrying about stranded assets from having cheaper renewables, NEP 2023 instead rounds up the race for coal plants between 2027 and 2032. Last month, the Environment Ministry exempted the installation of FGD systems for 79% of the coal power plants, bringing about controversy on the trade-off between clean air and cheap power.. The government also avoids tracking carbon intensity in coal block allocations and lacks any coal phase-out plan—raising serious concerns about climate accountability.
In the critical observations of Climate Action Tracker’s (CAT) “Highly Insufficient” rating, they have pointed out that India’s 2022 NDC update raised ambition on emissions intensity (45% cut by 2030) and non-fossil capacity (50%), but still falls short of a 1.5°C pathway. CAT finds that India is already set to exceed these targets, so they won’t deliver extra emissions cuts. India’s plan to add 51 GW of coal power by 2032 clashes with the Paris-aligned goal of cutting coal’s share to 17–19% by 2030 and phasing it out by 2040. Instead, India is on track for 50% coal reliance—far off the 1.5°C path.
Our 2030 emissions are projected at 4.1–4.3 GtCO2e, slightly lower than earlier estimates due to reduced power sector emissions, but still far from 1.5°C alignment. According to CAT, current policies point toward rising emissions instead of the decline that is so urgent.
According to CAT, our 2070 net zero pledge that was announced at COP26 remains vague and offers no clarity on whether it covers all greenhouse gases or simply CO2. While the 2022 LT-LEDS discusses sectoral actions, it does not present any interim targets or a roadmap toward the ultimate net zero.
India’s climate strategy reflects the country’s development concerns- that of balancing low per capita emissions and widespread poverty with ever-increasing energy demands. Hence, governments see coal as vital to ensuring energy security, especially now with increased incidences of droughts and floods. Dependence on coal, however, holds up big risks. Against the backdrop of renewables becoming increasingly cost-competitive, the risk of stranded assets is growing. Air pollution emissions from coal plants also cause around 250,000 preventable deaths every year (source). With the rollback of pollution norms in 2025, health impacts are expected to worsen. Unequal regional growth of renewables is also a threat to a just transition. The biggest challenge remains in scaling clean energy without affecting economic development-unless international finance and technology fill this gap.
In order to improve its CAT rating and bring India in line with the 1.5°C target, it will need more ambitious climate strategies: setting absolute emissions targets, clearly laying out the scope of its 2070 net zero target, forbidding new coal projects and retiring old coal plants. The rapid growth of renewables and energy storage will be essential to address peak demand and reduce coal dependencies. India must both push back for international climate finance and technology transfer for CCUS and green hydrogen. In order to ensure a just transition, worker re-skilling in coal-reliant regions should be undertaken, and climate education should be fostered to raise public support for sustainable change.
Although up-and-down trends toward renewables and afforestation are evident, continued coal dependence and weak climate targets annihilate its global credibility. Rated Highly Insufficient by Climate Action Tracker, India needs to walk the bold and transparent policy walk.
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