Despite achieving substantial progress in installing renewable energy capacity, securing the fourth position globally in 2022, India's dependence on fossil fuels is still on the rise as it directs coal and gas-fired power plants to operate at peak capacity to meet the rise in seasonal electricity demand brought on by record-hot summers.
Long-term planning is crucial for India to deal with volatile energy demand in response to changing weather patterns. There is a pressing need for India, and the world at large, to prioritise a definitive transition away from fossil fuels, imperative for achieving the country's broader developmental goals.
Our latest data indicates a slightly lower estimate of 2030 emissions under current policies due to the increased renewable energy adoption and reduced power sector emissions. However, under current policies, India's overall emissions are still expected to rise beyond 2030. To ensure a fair contribution to the global climate crisis, India’s emissions would need to stay below the emissions projected under current policies, and with international support, it could expedite faster reductions.
The CAT’s overall rating of India’s climate targets and action remains “Highly insufficient”.
The Indian government has implemented several policy measures to encourage renewable energy, including capacity targets, improvements to administrative processes and incentives for the domestic production of solar technologies, and ramping up the production of green hydrogen.
However, reliance on coal power continues to be a drag on ambition. While there is no plan for building additional coal capacity beyond what is under development until 2026-27, the latest electricity plan includes adding substantial new coal power capacity in the following five years, and the government is pushing for increased domestic coal production. With the falling cost of renewables and the shelving of several coal projects in recent years, it is questionable whether this capacity will actually be built. India is also increasing its Liquefied Natural Gas (LNG) imports, given its increasing utilisation of gas power plants.
The National Electricity Plan (NEP2023), adopted in May 2023 does eliminate the small amount of new gas power that had been planned for 2022-2027, as well as reducing the overall reliance on nuclear power throughout the decade. The total added solar capacity has been raised by 31 GW compared to the draft version, but the plan foresees slightly less wind power (12 GW less), for an overall increase of 21 GW in non-hydro renewable energy capacity.
Our analysis shows that with current policies, India will overachieve its NDC targets, so it could set stronger targets.
Our current policy scenario is based on the IEA's World Energy Outlook 2023 (WEO2023) which projects that India's total energy-related emissions will peak around 2035 under the Stated Policies Scenarios (STEPS), while emissions from the power sector will peak around 2030. Overall reliance on coal-based power generation remains around 55%, marginally lower than our 2022 update. Similar to NEP2023, solar capacity additions have increased, but there's been a decline in wind capacity additions.
India is witnessing a surge in summer electricity demand in recent years due to extreme heatwaves and the resulting prolonged summer. In response, the government has directed coal plants to operate at maximum capacity and has increased the use of gas plants to meet peak demand. Both domestic coal production and coal imports have reached record highs in 2023.
Some of the recent positive developments in terms of climate change mitigation policies include:
- Minimum renewable purchase obligation for the power distribution companies to be gradually increased from 24.6% in 2023 to 43.33% in 2030.
- Policy support enhanced to expand storage capacity. The newly-adopted NEP2023 provides guidance to facilitate the procurement and utilisation of Battery Energy Storage Systems (BESS). The Ministry of Power has also adopted guidelines for pumped storage projects. However, concern has been expressed over the environmental clearance process stated in the guidelines.
- The government has started auctions under a production-linked incentive programme for electrolyser manufacturing for green hydrogen production.
To increase its climate action, India needs to:
- At COP28, commit, along with the global community, to phasing out fossil fuels, but highlighting that India needs international support to achieve this domestically.
- Stop building new coal power capacity and develop a sustainable and inclusive plan for the early retirement of its existing capacity. This includes the rapid build-out of renewable electricity and storage options, to ensure seasonal peaks in the demand can be met safely.
- Avoid locking in a dependency on LNG imports. India is expanding its fossil gas infrastructure through development of LNG terminals and pipelines, and plans to increase the import of LNG as the international market price is stabilising. Where such imports cannot be avoided, India could ensure that the infrastructure can be decommissioned.
- Strengthen its climate targets. India is already on track to meet and exceed its 2030 targets. Achieving the emissions reductions needed to limit warming to 1.5°C will require much international support. India could adopt an ambitious conditional target to indicate what it would be willing to do if support were made available.
The CAT rates India’s climate targets and policies as “Highly Insufficient”, indicating that India’s climate policies and commitments are not consistent with the Paris Agreement’s 1.5°C temperature limit.
India’s second NDC strengthened its targets on paper, but will not drive real world emission reductions beyond its current level of climate action. Its emissions intensity target is “Insufficient” when compared to India’s fair share contribution.
India’s 50% non-fossil capacity target by 2030, which is conditional on international support, is “Highly insufficient” when compared to a modelled 1.5°C emissions pathway for the country and its current power sector plans already exceed this target. India’s projected emissions in 2030 under its current level of climate action are marginally lower than in our last assessment, largely due to lower emissions from the power sector than previously estimated, with a marginal fall in coal-fired power generation (due to updated historical emissions).
India needs to adopt stronger targets that will drive actual emissions reductions and accelerate climate policy implementation. The country will need international support to get onto a 1.5°C pathway.
We rate India’s current policies and action as “Insufficient” compared to its fair share contribution.
India has ambitious renewable energy plans as outlined in the National Electricity Plan 2023 (NEP2023) with a share within total capacity of 57% and 66% in 2026-27 and 2031-32, respectively. India ranked fourth in the world in renewable energy capacity installations in 2022, after China, the US and Germany. The NEP2023 is reflected in the lower bound of our current policy and action pathway.
The Indian government is providing financial incentives to promote renewable energy. Measures have been taken to boost domestic solar module manufacturing and attract private investment, including import duties to protect local producers.
The production and use of coal, however, remains an issue: the government is continuing its support for coal and India still has the world's second largest coal pipeline. India is increasing its reliance on coal and gas to meet the growing electricity demand during its increasing summer heatwaves. The extreme heat events will be more likely in future, even if the world meets the Paris Agreement temperature target (Vargas Zeppetello et al., 2022). This increased temperature will create additional demand for electricity for cooling and it is critical that this additional demand should be met through sustainable energy sources.
The NEP2023 outlines a strategy up to 2026-27 and provides a prospective plan extending it to 2031-32. Its adopted electricity plan (NEP2023) envisages more than a 150% increase in additional coal capacity in the second half of the decade as compared to an earlier draft (2027-2032), rising from 9.4 GW to 25.5 GW in the final version.
Planning for 1.3 GW of that capacity is already underway. The plan does eliminate an envisaged 7.7 GW of additional capacity for the 2022-2027 period, but the 25.6 GW already under construction for the period remains unchanged. In total, India would add 51.1 GW of new coal capacity in the coming decade and anticipates retiring only 2.1 GW of its existing fleet.
To be aligned with the 1.5°C temperature limit, India needs to phase out coal use from its power sector by 2040, with substantial reductions by 2030.
The government continues to advance its green hydrogen policy with its updated National Green Hydrogen Mission, an important step forward for decarbonisation of refineries and fertiliser plants where currently fossil fuels are used as feedstock. The policy has set a target of five million tonnes per annum of green hydrogen production by 2030. Financial and policy support has been extended for green hydrogen production and adoption in the industries through the green hydrogen purchase mandate.
Our full policy and action analysis is here.
India’s NDC has three main elements:
- An emissions-intensity target of 45% below 2005 levels by 2030;
- A target of achieving 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030; and
- Creation of a carbon sink of 2.5 to 3 GtCO2e through additional forest and tree cover by 2030.
While India indicated in its updated NDC that achieving the 50% non-fossil capacity target would require international support, it is already on track to achieve 60% or more non-fossil capacity by 2030 under current policies.
We rate this target as “Highly insufficient” when compared to the level of reductions needed in India under modelled domestic pathways to be consistent with limiting warming to 1.5°C, indicating substantial improvement is needed in this target and India will need international support to get onto a 1.5°C pathway.
The rating has improved due to an update in our modelled domestic pathways to the IPCC AR6 dataset: it is not due to any fundamental changes in the target itself. Our estimate of emissions for the 50% non-fossil capacity target is slightly lower than our last update, due to changes in the underlying power sector scenario, not the target.
We interpret India’s emissions-intensity target as being its unconditional contribution to limiting warming to 1.5°C. We rate this target against what India’s fair share contribution should be and find it to be “Insufficient.”
The “Insufficient” rating indicates that India’s unconditional target in 2030 needs substantial improvements to be consistent with limiting warming to 1.5°C. India’s target is at the least stringent end of what would be a fair share of global effort, and is not consistent with the 1.5°C limit unless other countries make much deeper reductions and comparably greater effort. If all countries were to follow India’s approach, warming would reach over 2°C and up to 3°C.
The quantification of this target varies depending on how GDP is measured and assumptions made about 2030 projections. The transparency of India’s target could be improved with further information on these elements.
In 2016, India had a net carbon sink of 308 MtCO2e. India's target for its land and forestry sector remains unchanged in its updated NDC as it plans an additional 2.5–3 GtCO2e of carbon sink by 2030 through additional forest cover. Several policies and measures were adopted under the overarching framework of the National Mission of Green India.
In its National Forest Policy of 1988 India has set a target of bringing 33% of its geographical area under forest cover. As of 2021, forest and tree cover accounts for 24.6% of the country’s geographical area, an only marginal increase since 2013 (24%).
At COP26 in 2021, Prime Minister Narendra Modi announced a 2070 net zero target for India and during COP27 India submitted its Long-term Strategy for Low Carbon Development (LTS). We evaluate the net zero target as “Poor”.
The full net zero target analysis can be found here.