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India’s $1 Trillion Challenge: The High Cost of Moving Away from Coal

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The transition away from coal in India presents a complex and costly challenge, as revealed by a recent study from iForest. Over the next 30 years, India will require more than $1 trillion (Rs 84 lakh crore) to phase out coal while ensuring socio-economic stability for coal-dependent regions.

Coal Resource in India

India’s estimated coal reserve as of 2023 stands at 378.21 billion tonnes, with a production of nearly 1,000 million tonnes in 2023-24, showing an 11.71% growth. Coal imports remain significant, with 261 million tonnes imported during the same period, primarily for steel and power sectors.

Ensuring a Just Energy Transition in India

A “just” transition aims to ensure that workers and communities dependent on coal are not left behind as India shifts towards a low-carbon economy. This is crucial as public sector coal companies alone employ over 3.6 lakh workers. The study outlines key cost components such as mine closures, site repurposing, and skilling workers for green jobs. Notably, green energy investments will account for almost half of the projected costs.

International Support – Case Studies

International examples from South Africa and Germany offer lessons for India. South Africa, for instance, has secured $8.5 billion in international funding for its Just Energy Transition Investment Plan, while Germany has committed over $55 billion for its coal phase-out by 2038.

Findings on Coal-Dependent Districts in India

The study highlights the significant reliance of districts like Bokaro, where coal industries account for 54% of the district’s domestic product. Bokaro’s transition is expected to cost Rs 1.01 lakh crore, emphasizing the magnitude of the challenge ahead.

Balancing economic stability, the welfare of workers, and India’s climate goals will require a well-planned and adequately funded approach to ensure a smooth and inclusive transition from coal.

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