India's energy landscape is currently navigating a complex transition, acknowledging that coal will remain a significant component of its energy mix for the foreseeable future, while also exploring avenues to make its use cleaner. Coal is essential to meet the country’s growing electricity demands, with coal-fired power plants consistently generating over 70% of India's total electricity supply since the early 2000s. Electricity consumption has seen a significant increase, with a growth rate exceeding 9% from 2021 to 2025, and is expected to double by 2030.
Despite being the world's third-largest carbon emitter, India continues to prioritize coal. This reliance poses a challenge as the nation strives to meet its international climate commitments, including decreasing emissions intensity by 45% by 2030. To reconcile these conflicting priorities, India is focusing on strategies to reduce emissions from coal-fired power plants rather than phasing out coal entirely.
One promising approach is decarbonizing coal-based thermal plants, which a recent report from the Centre for Science and Environment (CSE) suggests could reduce greenhouse gas emissions by 30%. Experts have proposed several strategies for emission reduction, including lowering the minimum running capacity of thermal plants and adopting carbon capture technologies. Substituting coal with agricultural residues in thermal plants has also shown promise in reducing coal usage in regions like Delhi, but its widespread adoption remains limited.
The government is also promoting coal gasification as a way to switch to cleaner fuels and greener technologies. Coal gasification transforms solid coal into syngas, a mix of carbon monoxide, hydrogen, and carbon dioxide, which can be used to produce cleaner fuels and chemicals while reducing emissions. The Ministry of Coal views coal gasification as a step toward energy self-reliance and a cleaner industrial future. The government has approved an outlay of ₹8,500 crore as financial incentive for promotion of coal gasification projects for both government PSUs and private sector companies.
Several projects have already been awarded financial incentives under the Coal Gasification Incentive Scheme. These include New Era Cleantech Solution Private Limited, which received ₹1,000 crore for its coal gasification project in Maharashtra, and Greta Energy Limited, which was awarded ₹414.01 crore for its coal gasification project. Coal India Limited and GAIL (India) Limited have also signed a joint venture agreement to set up a Coal to Synthetic Natural Gas plant using surface coal gasification technology.
However, renewable energy infrastructure is currently unable to keep pace with India's surging energy needs, leading to a pivot back to coal. Coal India Ltd is reopening 32 defunct mines and preparing to launch up to five new greenfield projects this year. This move highlights the widening gap between energy demand and clean power supply.