Coal production in India: India must color coal money green for mining communities to survive

Coal production in India: India must color coal money green for mining communities to survive

Every October, cash registers ring in stores dotting the mining centers of eastern India during the Hindu festival season of Dussehra, when the country’s largest coal company, , offers a bonus to its workers.

Researchers and unions are calling for this coal money – which fuels spending in homes and local economies – and the revenue local governments derive from mining companies to be mapped as a first step towards planning for a post- coal.

India aims to more than triple its renewable energy capacity by 2030 – but state support for renewable energy projects is still only a fraction of that for fossil fuels, as coal generation is also increasing to meet the growing demand for energy.

The researchers are calling for a big increase in spending on renewable energy to help ensure mining communities don’t lose out as India transitions to a more climate-friendly economy.

“India needs to go back to the drawing board to map its financial challenges as it goes green,” said Prateek Aggarwal, Program Associate at the Energy, Environment and Water Council, to the Thomson Reuters Foundation.

“In coal-dependent economies, the majority of spending depends on coal revenues. And these states need to diversify – because where will they get the money for development and state social welfare from?” said Aggarwal.

He co-authored a report released in May – Mapping India’s Energy Policy 2022, which shows that coal continues to receive more investment and state subsidies than renewables and argues that the balance needs to be steered towards clean energy.

A gradual reduction in coal production and use in India is inevitable in the future, policy experts have said, calling on the country to immediately start planning alternative industries and build renewable energy capacity.

Kavita Rao, director of the National Institute of Public Finance and Policy, a think tank, said coal in India would not disappear for three decades, so jobs could be protected for now, but it won’t last because the sector will stop growing.

“Our challenge is raw energy production – and if we gradually move to solar and other energy sources, a just transition can be managed,” she added.


India, the world’s second-largest coal producer, aims to build 500 gigawatts (GW) of renewable energy capacity by 2030, up from around 150 GW currently, and has pledged to achieve net global warming emissions of here 2070.

It is betting heavily on large solar and wind projects to achieve these goals, encouraging investments and launching water and energy security programs to phase out the use of fossil fuels in the agricultural sector.

But to meet its 2030 target, India needs to invest between $20 billion and $27 billion a year in renewable energy, double what it currently spends, according to the Ministry of Renewable Energy.

While the government cut coal subsidies to $1.7 billion last year from $3 billion in 2014, they still outweigh support for renewables, which stood at around $1 billion l year, compared to $0.6 billion in 2014, according to the study co-authored by Aggarwal.

But what the state gets back for its investment is a big barrier to change.

More than 80% of India’s total energy revenue of around $94 billion – mainly in the form of taxes and duties – comes from oil and gas, followed by coal and electricity at around 16%, while less than 1% comes from renewable energy sources, calculations in the new report show.

Coal mine closures will have a cascading effect on local economies and services such as health and education.

Surendra Pandey, all-India secretary of the Delhi-based Bharatiya Mazdoor Sangh union, called for a “just transition law” that would give workers the right to compensation after mines close.

“Coal India is expected to increase its investment in solar energy in these regions, but currently their focus is on boosting coal production,” he said, referring to India’s recent decision to increase coal’s ability to meet growing energy demand spurred by a severe heat wave.

India’s plan to reopen closed mines and open new ones to boost domestic coal production to 1.2 billion metric tons from around 780 million tons is now out of step with long-term risks. climate-related terms, researchers said.

“The decision to invest in coal expansion means that already limited public resources will be used to finance a mature technology that has clear negative impacts on the environment, people’s health and the planet,” said Swasti Raizada. , co-author of Mapping Energy Policy. report.

Moreover, coal power projects will become stranded assets as the world embraces clean energy, said Raizada, policy adviser at the International Institute for Sustainable Development.


Conversations around a just transition are just beginning in India – and the topic is often dismissed as premature in the halls of thermal and coal power companies.

But a start of sorts has been made: the Federal Coal Ministry is carrying out field surveys in two mining districts to plan a socially equitable shift away from coal – which union leader Pandey says should soon be expanded to cover all 290 closed mines.

Officials from Coal India – which accounts for almost 80% of the country’s coal production – also met with unions and researchers in a rare just transition interaction this month.

Describing the gathering as a “historic milestone”, Professor Pradip Swarnakar, who heads the Just Transition Research Center at the Indian Institute of Technology Kanpur, said everyone accepted that a green energy shift either on the maps.

“Even if coal ends in the next five, 20 or 30 years, we have to work from today – otherwise it will be disastrous like the tsunami,” Swarnakar said.

officials told the Thomson Reuters Foundation they were aware of both direct and indirect coal in mining centers.

Vinay Ranjan, director of people and industrial relations at Coal India, who participated in the just transition dialogue, said the company is considering reskilling workers to prepare them for other industries or persistent jobs such as welders and electricians.

Coal India, he added, understands that several layers of workers, their families and local businesses depend on coal.

“During Dussehra, shopkeepers are waiting for the bonus that our employees will receive by buying new clothes. It is a big festival and the happiest people during this time are the shopkeepers,” he said.

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