Navigating the Coal Transition for Energy Security

• 01 Dec 2025

For Prelims: Quality Council of India, Mines and Minerals (Development and Regulation) Act, 1957, Sedimentary Rock, GST, Coal Gasification, Coking Coal, Flue Gas Desulfurization (FGD), Battery Energy Storage Systems.     

For Mains: Key Facts Regarding the Coal Sector and its Importance in Indian Economy, Major Challenges and Drawbacks Facing India's Coal Sector and Way Forward.  

Source: PIB 

Why in News? 

The government has allowed private entities, accredited by the Quality Council of India (QCI), to serve as Accredited Prospecting Agencies (APAs) and carry out prospecting work under the Mines and Minerals (Development and Regulation) Act, 1957. 

• It will boost coal availability, strengthen energy security, and support India’s economic growth through a more transparent and efficient mineral exploration framework. 

What Role does Coal Play in India's Energy Security? 

• Bedrock of Energy Security: Coal remains essential to energy security—contributing 55% to India’s energy mix and fuelling over 74% of electricity generation. 
  • Unlike intermittent renewables, coal-fired power plants provide stable, and reliable power, essential for grid stability and meeting India’s continuous electricity demand. 
• Crucial Driver of the Economy: The coal sector generates over Rs 70,000 crore annually for central and state governments through royalties, GST, and levies.  
  • As the largest commodity transported by Indian Railways (49% of freight earnings), coal revenue also subsidizes passenger fares, making it crucial for the transport ecosystem. 
• Key Input for Core Industries: Coking coal is essential for steel production, forming about 42% of steel costs, while coal also fuels cement kilns, making it crucial for construction and infrastructure. 
• Major Source of Employment: Coal India Ltd directly employs over 2.39 lakh people, with millions more working indirectly in contracting, transport, equipment manufacturing, and related services.  
• Foundation of Sustainability: The government is promoting coal gasification through an Rs 8,500 crore incentive, converting coal into syngas for cleaner fuels, and methanol, reducing its carbon footprint.  
  • Revenue from coal supports renewable energy expansion, with NTPC planning 60 GW RE capacity by 2032, nearly 45% of its total generation. 

What are the Key Facts Regarding the Coal Sector in India? 

• About Coal: Coal is a combustible black or brownish-black sedimentary rock made mostly of carbon and is considered a fossil fuel because it formed from ancient plant remains.  
  • Over millions of years, layers of sediment buried this material, and the pressure and heat removed water and gases, increasing carbon content and gradually transforming peat into different grades of coal. 
• Grades of Coal: Coal is classified according to its carbon content, heat value, and energy output, with the main types being: 
  • Anthracite: It contains 86%–97% carbon and generally has the highest heating value of all ranks of coal. Found primarily in Jammu and Kashmir. 
  • Bituminous: It contains 45%–86% carbon. Found predominantly in Jharkhand, West Bengal, Odisha, Chhattisgarh, and Madhya Pradesh. 
  • Subbituminous: It typically contains 35%–45% carbon, and it has a lower heating value than bituminous coal. 
  • Lignite (Brown Coal): It contains 25%–35% carbon. It has high moisture (30–55%), high volatile matter, and low ash content, making it inferior to higher-rank coals in heating value and stability.  
    • It is light, porous, and friable, and cannot be transported over long distances due to the risk of spontaneous combustion. 
    • Found in Tamil Nadu, Puducherry, Gujarat, Rajasthan and Jammu & Kashmir. 
• Coal Reserves in India: India holds the 5th-largest coal reserves and is the 2nd-largest consumer globally.  
  • The top 3 states—Odisha, Jharkhand, and Chhattisgarh—together account for about 69% of the country’s total coal reserves. 
• India’s Coal Production: Coal production reached 1,047 Million Tonnes (MT) in FY 2024-25, marking a 4.99% growth from 997 MT the previous year. 
• Coal Imports: Coal imports fell by 8.4% to 183 MT in April–December 2024, saving USD 5.43 billion in foreign exchange. 

What are the Major Challenges Facing India's Coal Sector? 

• Environmental Damage: Coal-based Thermal Power Plants (TPPs) emit disproportionately more than the industrial sector, contributing 60% of PM, 45% of SO₂, 30% of NO₂, and 80% of mercury (Hg). 
  • All power plants in India use enough water to meet the needs of 251 million people, according to Greenpeace. 
• Severe Public Health Consequences: In 2022, fossil fuel air pollution in India led to 1.72 million deaths and millions of cases of asthma, respiratory, and cardiovascular illnesses, according to The Lancet Countdown 2025. 
• Import Dependence for High-Grade Coal: India depends on imports for high-grade coking and thermal coal, with 85% of coking coal imported, exposing the economy to price volatility and foreign exchange outflow. 
• Stranded Asset Risk: With falling solar and wind costs, building new coal plants is becoming uneconomical, and existing plants risk becoming stranded assets.  
  • About two-thirds of India’s coal power is now more expensive than renewables, costing the country billions annually, according to Greenpeace. 
• Long-Term Transition Challenge: The phase-out of coal poses a critical challenge to ensure a just transition for millions of workers and communities reliant on the sector, requiring reskilling and alternative employment. 

How can India Navigate a Just Transition from Coal to a Renewable Energy Dominated Future? 

• Phased Reduction of Coal Dependence: Phase out coal power gradually, retiring inefficient, high-polluting plants, and adopt cleaner technologies like Selective Catalytic Reduction (SCR) and Electrostatic Precipitators (ESPs) to reduce emissions during the transition. 
• Advanced Pollution Control Technologies: Enforce and monitor Flue Gas Desulfurization (FGD) systems and other emission controls in all thermal plants; these scrub SO₂ from flue gas, reducing a major air pollutant that causes respiratory issues. 
• Accelerating Renewable-Centric System: Rapidly expand solar and wind power, leveraging India’s natural advantages. India aims for 500 GW of non-fossil capacity by 2030 and has already surpassed 190 GW by mid-2025 across solar, wind, hydro, and nuclear. 
• Build Robust Energy Storage: Invest in a green energy corridor to transmit renewable power and support Battery Energy Storage Systems (BESS) and pumped hydro for grid stability.  
  • The government’s Scheme for Viability Gap Funding (VGF) for development of BESS plans 4,000 MWh of BESS by 2030–31, funding up to 40% of capital costs. 
• Leverage Coal for Grid Stability: Strategically reposition coal-based power plants to operate as flexible peaking power sources that can be ramped up quickly when renewable generation is low (e.g., at night or during monsoons), ensuring grid stability and a reliable 24/7 power supply. 

Conclusion 

India's coal sector remains vital for energy security and the economy, but it faces unsustainable environmental and economic costs. The future hinges on a dual strategy: responsibly managing coal as a transitional, flexible power source while aggressively scaling up renewables and storage for a sustainable, self-reliant energy future.

Drishti Mains Question:

"Coal is the bedrock of India's energy security, but its long-term sustainability is questionable." Critically analyze this statement in the context of India's developmental and environmental goals.

Frequently Asked Questions (FAQs) 

Q. What is the significance of coal in India’s energy mix?
Coal contributes 55% to India’s energy mix and fuels over 74% of electricity generation, providing stable, reliable power essential for grid stability. 

Q. Which Indian states hold the largest coal reserves? 
Odisha, Jharkhand, and Chhattisgarh together account for 69% of India’s total coal reserves. 

Q. How is the government promoting cleaner use of coal? 
Through initiatives like a Rs 8,500 crore viability gap funding scheme for coal gasification, which converts coal to syngas for cleaner fuels and chemicals, reducing its direct carbon footprint. 

UPSC Civil Services Examination, Previous Year Questions (PYQs) 

Prelims 

Q1. Consider the following statements: (2019) 

1. Coal sector was nationalized by the Government of India under Indira Gandhi. 
2. Now, coal blocks are allocated on lottery basis. 
3. Till recently, India imported coal to meet the shortages of domestic supply, but now India is self-sufficient in coal production. 

Which of the statements given above is/are correct? 

(a) 1 only   

(b) 2 and 3 only  

(c) 3 only 

(d) 1, 2 and 3 

Ans: (a)

Q2. Which of the following is/are the characteristic/characteristics of Indian coal? (2013) 

1. High ash content 
2. Low sulphur content 
3. Low ash fusion temperature 

Select the correct answer using the codes given below: 

(a) 1 and 2 only  

(b) 2 only 

(c) 1 and 3 only 

(d) 1, 2 and 3 

Ans: (a)

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Mains 

Q. Despite India being one of the countries of Gondwanaland, its mining industry contributes much less to its Gross Domestic Product (GDP) in percentage. Discuss. (2021)

Q. “In spite of adverse environmental impact, coal mining is still inevitable for development”. Discuss. (2017)