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India reduced its imports of coal in 2024. On the face of it, this would have been wonderful news for power sector emissions in the world’s second-largest coal consumer, if we don’t analyze what’s behind lower coal imports.

India has been looking to cut its dependence on foreign coal supply to meet its surging power demand and has hiked domestic production. While coal is abundant in domestic mines, it is typically of lower quality and contains lower levels of energy when burnt compared to most imports.

Therefore, India needs to burn more domestic coal to compensate for the lower quality. And this drives up emissions from the power sector, Reuters columnist Gavin Maguire argues.

Considering the fact that India is the second-biggest coal user in the world after China, burning lower-quality coal in India will not help a global reduction in power sector emissions, either.

Global coal demand surged to another record high in 2024, the International Energy Agency (IEA) said in December, expecting the world’s coal consumption to level off through 2027.

While coal demand continued to decline in the EU and the U.S. – although at slower paces than in 2023, China and India saw in 2024 another year of record-high coal consumption, the agency said. China was on track for a 1% rise to 4.9 billion tons, and India’s coal demand was poised to increase by more than 5% and hit 1.3 billion tons—a level that only China has reached previously.

In India, coal-fired power generation and emissions jumped to a record in 2024 amid soaring electricity demand and the use of more volumes of coal mined domestically rather than imported from overseas.

At the same time, Indian imports of thermal coal, the type of coal used for power generation, fell by 3% last year from a year earlier, per data compiled by Kpler and reported by Reuters’s Maguire.

Indian coal-fired power plants are running at full capacity at least by the end of this month, per a government mandate. The mandate, which first kicked in in October 2024, was meant to ensure India didn’t fall into an energy crunch amid heatwaves and droughts that slashed hydropower generation.

Last year, India’s annual installations of new coal-fired power capacity hit 4 gigawatts (GW), flat on the five-year high of 2023 and the highest level since 2019. India plans to add as much as 90 GW of coal capacity by 2032 as it looks to meet its surging power demand with reliable baseload electricity.

And as imports are declining, India is burning more of its own lower-quality coal.

Domestic coal production hit a record high level in 2024 as the government seeks to reduce imports.

During the 2023-2024 fiscal year ended March 2024, India’s coal output hit a record high of 997.8 million tons, an increase of 11.7% from the previous fiscal year, the country’s Ministry of Coal said in December.

In the calendar year 2024, up to December 15, 2024, India produced about 988.3 million tons of coal, up by 7.66% compared to 2023.

India’s Ministry of Coal has also taken steps to boost domestic output and reduce imports of coking coal, the one used in heavy industries such as steelmaking.

With industry expected to expand and power demand to soar, India is set to use more of its lower-quality domestic coal to meet its consumption needs. This means no peak power emissions in sight for the world’s second-largest user of coal.

Overall emissions in India are also set to rise if the country does not address coal mine methane emissions, clean energy think tank Ember said last year.

India’s plan to boost coal mining could more than double annual coal mine methane emissions by 2029, compared to 2019, Ember said in a report.

“If unaddressed, this poses a considerable risk for the country’s domestic emissions reduction plans and will have a profound short-term warming impact,” Ember’s analysts note.

By Tsvetana Paraskova for Oilprice.com