India’s coal production to surpass a billion tonnes by 2025: IEA annual report

Subject :Environment

Context:

Its own coal production will surpass a billion tonnes by 2025, the annual report of the International Energy Agency (IEA), predicted on December 16, 2022.

Report analysis:

Report name: Coal 2022: Analysis and forecast to 2025
India, along with China, is the world’s largest coal producer, consumer and importer.
India’s coal consumption has doubled since 2007 at an annual growth rate of 6 per cent.
India and China, are also the only two countries globally where there has been an uptick in investment in coal mine assets.

Global Coal demand:

Global coal demand reached eight billion tonnes this year.
The Russia-Ukraine war has sharply altered the dynamics of the coal trade, price levels, and supply and demand patterns in 2022.
In India and China, where coal is the backbone of electricity systems and gas accounts for just a fraction of power generation, the impact of steeper gas prices on coal demand has been limited.
The spike in the prices of gas due to the war as well as lower output from hydro and nuclear led to ‘fuel switching’ to coal in the European Union to generate power.

Why coal demand is rising in India?

According to the projections by Climate Action Tracker, fossil fuel makes up for over half the installed energy capacity in the country and is expected to touch around 266 gigawatts by 2029-2030.
Domestic coal requirement is expected to rise to 1,018.2 million tonnes by 2031-32 from 678 MT in 2021-2022.
This means coal consumption will increase 40% in India.
Reasons:
- Iron and steel production uses coal and there are not many technologies to replace the fuel immediately.
- Continued expansion of India’s economy is expected during 2022-2024, with annual average GDP growth of 4%, fuelled partially by coal.
- India’s push to domestic coal mining through both Coal India and auction of coal blocks to private companies, coal usage in India will increase as it plateaus in other parts of the world, including China.
- The central government has opened up coal mining for the private sector, claiming it as one of its most ambitious coal sector reforms.

Climate Action Tracker (CAT):

Climate Action Tracker is an independent scientific analysis produced by two research organizations tracking climate action since 2009. It monitors 32 countries, accounting for more than 80 percent of global emissions.
The Climate Action Tracker is an independent scientific analysis that tracks government climate action and measures it against the globally agreed Paris Agreement aim of “holding warming well below 2°C and pursuing efforts to limit warming to 1.5°C.”
A collaboration of two organizations, Climate Analytics and New Climate Institute, the CAT has been providing this independent analysis to policymakers since 2009.