An economic slowdown, renewable energy growth and the impact of Covid-19 have led to the first year-on-year reduction in India’s CO2 emissions in four decades. Emissions fell by around 1% in the fiscal year ending March 2020, as coal consumption fell and oil consumption flatlined.
The decline in emissions reflects the headwinds already affecting the Indian economy since early 2019, and increasing renewable energy generation. But our analysis of official Indian data across the nation’s entire 2019-20 fiscal year shows the fall has steepened in March, due to measures to combat the coronavirus pandemic. The country’s CO2 emissions fell by an estimated 15% during the month of March and are likely to have fallen 30% in April.
As with the global CO2 impact of the pandemic, the longer-term outlook for India’s emissions will be shaped, to a significant degree, by the government response to the crisis. This response is now starting to emerge – as set out below – and will have major long-term implications for India’s CO2 emissions and air quality trajectory.
Coal bearing brunt of demand crunch
As lower power demand growth and competition from renewables weakened the demand for thermal power generation throughout the past 12 months, the drop-off in March was enough to push generation growth below zero in the fiscal year ended March, the first time this has happened in three decades.
Over the preceding decade, thermal power generation grew by an average of 7.5% per year. As seen in the figure below, the dramatic drop-off in total power demand was entirely borne by coal-based generators, amplifying the impact on emissions.
Coal-fired power generation fell 15% in March and 31% in the first three weeks of April, based on daily data from the national grid. In contrast, renewable energy (RE) generation increased by 6.4% in March and saw a slight decrease of 1.4% in the first three weeks of April.
Daily power generation by source and by year in India. Source: POSOCO. Chart by Carbon Brief using Highcharts.
The fall in total coal demand extends beyond the power sector and is evident in data on coal supply. In the fiscal year ending March, coal sales by the main coal producer Coal India Ltd fell by 4.3%, while coal imports increased 3.2%, implying that total coal deliveries fell by 2% and signaling the first year-on-year fall in consumption in two decades.
The trend steepened in March, with coal sales falling 10% while coal imports fell 27.5% in March, meaning that total deliveries of coal to end users fell by 15%, in line with the reduction in power generation.
In March, coal output increased 6.5% even as sales fell by a record amount. Also, during the full year, more coal was mined than sold, indicating that the reason for the drop was on the demand side.
Read the full analysis in Carbon Brief.