India's coal investment deeply troubling: UN

UN chief urges Delhi to end fossil fuel subsidies; India set for first commercial coal mine auction

The United Nations chief yesterday called India's growing investment in coal "deeply troubling" and warned that expanding fossil fuel subsidies is "a human disaster and bad economics" that only means more deaths and rising healthcare costs.

UN Secretary-General Antonio Guterres' remarks, made during an online lecture held by The Energy and Resources Institute in Bangalore, come as India prepares to hold its first commercial coal mine auction in October. The government has said auctioning 41 coal blocks is part of India's stimulus for economic recovery from Covid-19. But climate change activists and states with coal reserves have opposed the auctions. India's major coal investor Adani Group will sit out the auction.

Mr Guterres said it makes "no commercial sense" to double down on domestic coal and open up coal auctions. As the cost of renewables falls, and 39 per cent of coal plants become uncompetitive - some 60 per cent could become so in 2022 - the world's largest investors are increasingly abandoning coal, he added.

India is the world's third largest emitter of greenhouse gases after China and the United States.

Coal provides about half of India's commercial primary energy supply and is the dominant fuel for power production. It accounts for 80 per cent of all industrial emissions.

India has committed to making clean renewable energy 40 per cent of its energy mix by 2040 and last year, its spending on solar energy surpassed that on coal-fired power generation for the first time.

"Yet, here in India, subsidies for fossil fuels are still some seven times more than subsidies for clean energy," said Mr Guterres. Many Indian coal plants are financially distressed, and ready to be overtaken by renewables and clean coal plants.

The UN chief spoke of India's role in staving off the threat of climate change. This meant "ending fossil fuel subsidies, placing a price on carbon pollution and committing to no new coal after 2020," he added.

Twenty top business leaders from India have signed a statement asking the government to accelerate the move away from coal, support electric vehicles, and pioneer "green industrialisation".

India's central bank, in its latest annual economic outlook, said the impacts of climate change would be the severest and India would need an appropriate framework to manage financial risks from worsening and erratic weather conditions. India was hit by eight cyclones last year while floods have already devastated three states this year .

Experts expect coal to dominate the power economy at least until 2030. They say that after years of stitching together a clean coal policy, India has undone these plans.

On May 21, it reversed a January 2014 notification that required thermal power plants to use coal with less than 34 per cent ash content. New rules allow power plants to use low-grade Indian coal that produces more fly ash, as long as they meet emissions norms and control pollution.

Senior researchers Kanchi Kohli and Manju Menon wrote in a Centre for Policy Research report: "By refusing to remedy the governance problems of coal use ... the environment ministry has put on the line the lives of the poorest people residing in the country's coal enclaves."

Mr Guterres had this advice for India: "Do not bail out polluting industries. End fossil fuel subsidies."

A version of this article appeared in the print edition of The Straits Times on August 29, 2020, with the headline 'India's coal investment deeply troubling: UN'. Subscribe