India’s coal clash: Power vs. planet

Every day in July, coal-fired power plants across India pumped out over 3,400 million units of electricity, keeping the country powered around the clock.

And behind that steady hum of energy was a record-breaking supply chain. On March 20, 2025, India officially dug its way into the billion club, surpassing 1 billion tonnes of coal production in FY 2024-25.

With the fifth-largest reserves and as the second-largest coal consumer, India leans on coal to power 74% of its electricity and meet 55% of its energy needs. Behind the scenes, it's a massive effort, 5 lakh miners, 350+ coal mines, and the relentless drive of both public and private players working day and night to keep India running.

Let us take a look at the figures:

Source: Ministry of Coal

As the charts above reveal, non-coking coal clearly takes the lead in India’s coal production mix, but what exactly sets it apart from coking coal?

• Coking coal is the steelmaker’s fuel of choice. When heated without air, it transforms into coke, a crucial input for blast furnaces. It’s largely imported, since India doesn’t have enough of it.

• Non-coking coal keeps the turbines spinning in thermal power plants and fires up kilns in cement and brick industries. Found in abundance across Indian coal belts, it’s cheaper, easier to source, and essential for meeting the massive electricity demand.

Now, what are the key players?

At the heart of India’s coal economy are two heavyweights: Coal India Ltd (CIL) and Singareni Collieries Co. Ltd (SCCL). CIL’s output jumped 56.5% over the past decade, SCCL mined 70.02 MT in 2023-24, up from 67.14 MT, and reached 69.01 MT in 2024-25, a 1.45% rise. Smaller players like TISCO, IISCO, and DVC continue to contribute.

Key players leading in coal production

Source: ET

Talking about the states, below are the top 5 where production is the most:

Source: BS

What are the economic implications?

Import bill shrinks

Between April and December 2024, India’s coal story turned into a win-win. Imports fell 8.4% to 183.42 million tonnes from 200.1 MT a year earlier — freeing up a hefty $5.4 billion (₹42,315.7 crore) in foreign exchange. The Non-Regulated Sector led the charge with a 12% cut in imports, while thermal power plants trimmed blending imports by almost 30%. The best part? All this happened even as coal-based power generation climbed 3.5%, proving that smarter sourcing can power growth and savings at the same time.

Source: PIB

India’s push for power self-reliance is paying off. Even as electricity generation hit a record 1,821 BU in FY 2024–25, up 5% from last year, coal imports dropped.

Source: CREA

Fuelling railways

India’s massive railway network depends on coal, not just to move it, but to stay financially viable. In FY2022-23, coal contributed nearly 49% of Indian Railways' freight revenue, generating a hefty ₹82,275 crore. That’s over a third of total railway earnings, making coal the single-largest freight commodity in the country.

Coal and the government’s bottom line

The sector pumps over ₹70,000 crore annually into government coffers through royalties, GST, and other levies, including ₹23,184 crore in royalties in FY23 alone - vital funds powering roads, schools, healthcare, and digital infrastructure in coal-rich states like Jharkhand, Odisha, and Chhattisgarh.

A human story

Beyond numbers, coal supports a vast workforce. Public Sector Undertakings like Coal India and NLC India collectively employ 369,053 individuals, including 128,236 contractual workers. Add to that 3.1 lakh pensioners, and the sector’s footprint in terms of livelihoods and social security is undeniable. Between 2014 and February 2024, Coal India and its subsidiaries added 59,681 employees, while NLC India brought in 4,265 more.

Investments that shape the future

PSUs in the sector have averaged ₹18,255 crore in annual capital expenditure over the past five years. These funds have gone into infrastructure upgrades, environmental restoration, digital mining systems, and improved logistics.

Priority sectors

Coal dispatches to priority sectors highlight their economic significance, with power, steel, and cement driving India’s growth momentum.

Source: Ministry of Coal

Yes, India's power runs on coal, BUT so do its emissions...

Coal keeps India’s grid stable and its economy moving. As of June 30, 2025, the country’s total installed power capacity stands at 485 GW. Interestingly, coal accounts for 45% of this capacity, and ends up generating over 70% of the actual electricity.

Source: Niti Aayog

But let’s talk about the flipside. In 2023, coal combustion in India released 2.03 billion metric tons of CO₂, a 9% jump from the year before, and the highest level on record so far. That’s not a small number. It’s more than what gas and oil combustion produce combined. And globally? India ranks as the second-largest coal emitter, just after China.

So while coal keeps the lights on, it’s also casting a long carbon shadow.

Source: Statista

The next step should be to make coal cleaner

India has long defended its coal use in the name of energy security and development. And rightly so - coal powers the grid, supports industries, and provides jobs. But increasingly, experts are asking:

If coal can’t be phased out, can we at least make it cleaner?

“You can’t wish away coal,” said Ashok Lavasa, former environment and finance secretary, on July 1. “But we can change how we use it.”

Electricity generation accounts for over 40% of India’s carbon emissions, and nearly 75% of that power comes from coal. A CSE report suggests that decarbonising thermal power plants alone could cut emissions by 30%, helping India meet its 45% emissions intensity reduction target by 2030 under the UN climate framework.

But the transition isn’t simple. Most coal plants must operate at a minimum 55% capacity, even when solar and wind are available, as they can’t ramp up quickly for evening demand. “There’s a technical limit,” said Ramesh Veeravalli of the Central Electricity Regulatory Commission. “The question is: how low can we go?”

Lowering that threshold, improving plant efficiency, and integrating flexible systems could reduce unnecessary coal burn, but these fixes alone won’t be enough.

Recognising this, Coal India and IIT Hyderabad recently signed an MoU to establish a Centre of Excellence for Clean Coal Energy and Net Zero, backed by an initial ₹98 crore grant. The focus: developing advanced technologies to make coal cleaner and more sustainable.

Meanwhile, Coal India’s first coal gasification plant, being developed with BHEL at the Lakhanpur mines in Odisha, is slated to begin production by FY 2030, with an investment of ₹14,000 crore.

Parting thoughts

India’s record coal production stands as a testament to its industrial strength, but it also sets a ticking climate clock. If clean technologies can’t scale quickly enough, policy reforms, smarter grids, and a clear roadmap to reduce coal reliance will be essential. Investments in clean coal and grid flexibility can buy time, yet the real question remains: will India pivot fast enough to balance its energy security with climate responsibility?