Context:

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.

What’s in today’s article?

• Coal Resource in India
• Ensuring a Just Energy Transition in India
• International Support for Coal Phase-Down – Case Studies
• Findings from the Study of Coal-Dependent Districts in India

Coal Resource in India

• Statistics
  • According to the National Coal Inventory of 2023, the total estimated coal reserve (resource) of India is 378. 21 billion 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.

Ensuring a Just Energy Transition in India

• About Just Energy Transition and challenges associated
  • A "just" energy transition refers to an equitable and inclusive shift towards a low-carbon economy that takes into account the needs of workers and communities dependent on fossil fuels.
  • As the world's second-largest coal producer, India employs a vast number of individuals in coal mining, thermal power plants, logistics, and related sectors.
    • Public sector coal companies alone employ over 3.6 lakh workers, with many more in the private sector.
  • As India aims for net-zero emissions by 2070, growing its renewable energy capacity will be crucial.
  • However, ensuring that coal-dependent workers and regions are not left behind in this transition poses a major financial challenge.
  • Balancing economic stability with climate goals will require significant investment.
• Costs associated with a just transition
  • A study on India's just transition from coal, based on assessments of coal-dependent districts and international examples from South Africa, Germany, and Poland, identified eight key cost components.
  • These include:
    • mine closures and site repurposing,
    • retiring coal plants and converting them to clean energy,
    • skilling workers for green jobs,
    • fostering new businesses,
    • community support,
    • green energy investments,
    • compensating states for revenue loss, and
    • planning costs.
  • Nearly 48% of the estimated $1 trillion required over the next 30 years will be needed for green investments to replace coal-based energy infrastructure with cleaner alternatives.
• Source of funds for this transition
  • Funding India’s just transition away from coal will require a mix of public and private investments.
  • Public funding, through grants and subsidies, will primarily address "non-energy" costs such as community support, skilling coal workers for green jobs, and aiding new businesses.
  • India’s $4 billion District Mineral Foundation funds, collected from miners, along with Corporate Social Responsibility (CSR) funds, can be used to support new businesses and coal-dependent communities.
  • Private investments, on the other hand, are expected to cover most of the "energy costs," focusing on developing clean energy projects and green infrastructure.

International Support for Coal Phase-Down – Case Studies

• South Africa’s Just Energy Transition
  • South Africa’s Just Energy Transition Investment Plan (JET-IP) will receive international financial support from countries such as the UK, France, Germany, the US, the EU, the Netherlands, and Denmark.
  • The plan requires $98 billion over two decades, with $8.5 billion to be provided between 2023-2027.
  • Most of the funds will go towards green energy investments, with financing through concessional loans, grants, and public-private partnerships.
• Germany’s Legislative Action on Coal Phase-Out
  • Germany has enacted legislation to phase out coal power by 2038, with over $55 billion allocated to close coal mines and power plants.
  • The funds will also be used to support coal-dependent regions by fostering economic development.

Findings from the Study of Coal-Dependent Districts in India

• The study focused on four coal-dependent districts: Korba (Chhattisgarh), Bokaro and Ramgarh (Jharkhand), and Angul (Odisha), to assess their reliance on coal and estimate the costs of a just transition.
• In Bokaro, coal-based industries contribute 54% of the district's domestic product, employing around 1,39,000 workers in coal mining, power plants, and related sectors like steel and cement.
• The study estimates that a full coal phase-down in Bokaro will begin after 2040 and will require Rs 1.01 lakh crore over 30 years to rehabilitate workers, repurpose coal sites, and develop green energy infrastructure.