A recent study by iForest (International Forum for Environment, Sustainability and Technology) reveals that India will need over $1 trillion (Rs 84 lakh crore) over the next 30 years for a just transition away from coal. The study, the first of its kind, estimates the costs of phasing down coal mines and plants while ensuring socio-economic stability in coal-dependent regions.
Coal Resource in India
- According to the National Coal Inventory of 2023, the total estimated coal reserve (resource) of India is 378.21billion tonnes as of 01.04.2023.
- Coal Production
- The all India Production of coal during 2023-24 was 997.83 MT with a positive growth of 11.71%.
Coal Import
- As per the present Import policy, coal can be freely imported (under Open General Licence) by the consumers themselves considering their needs based on their commercial consideration.
- Coking Coal is being imported by Steel sector mainly to bridge the gap between the requirement and indigenous availability and to improve the quality.
- Other sectors like Power sector, cement etc. and coal traders are importing non-coking coal.
- Total coal import during 2023-24 was 261 million tonnes.
Need for a Just Energy Transition
- A “just energy transition” refers to an inclusive and balanced transition that takes into account workers and communities that are dependent on fossil fuels.
- India is the world’s second-largest coal producer, and coal mining and related activities employ a large number of people.
- More than 3.6 lakh workers are employed in public sector coal companies, and the number is even higher in the private sector.
- India has set a target of net-zero emissions by 2070, which will require a transition from coal-based energy to green energy. But it is also important to ensure that people employed in coal-dependent sectors are not left behind in this transition, which is a significant financial and social challenge.
Cost of a just transition
To understand the cost of energy transition from coal in India, the following eight key cost components have been identified from international examples and assessments of coal-dependent sectors:
- Mine closure and reuse
- Decommissioning of coal plants and conversion to clean energy
- Skill development for green jobs
- Promoting new businesses
- Support to communities
- Green energy investments
- Compensating for revenue losses
- Planning and administrative costs
Of the estimated $1 trillion cost, about 48% will be allocated to green energy projects and investments in clean alternatives.
Sources of funding for the transition
India’s transition from coal to green energy will require both public and private investment
- Public financing: This will focus primarily on “non-energy” costs, such as community support, skills development for workers, and promoting new businesses, through grants and subsidies.
- District Mineral Foundation Fund: This $4 billion fund raised from miners in India can help coal-dependent communities in combination with corporate social responsibility (CSR).
- Private investment: This will cover “energy costs”, focusing primarily on investments in clean energy projects and green infrastructure development.
Study of coal-dependent districts in India
- A study was conducted on four coal-dependent districts in India – Korba (Chhattisgarh), Bokaro and Ramgarh (Jharkhand), and Angul (Odisha).
- Objective: The aim of the study was to assess coal dependence in these districts and estimate the cost of just transition.
Bokaro data
- Coal-based industries in Bokaro contribute 54% to the district’s GDP.
- The sector employs around 1,39,000 workers in coal mining, power plants, and related sectors such as steel and cement.