India’s coal crunch is a bad sign for its economy, and the world’s climate change battle

Name: COP26 Glasgow, the UN Climate Change Conference: last chance to save the planet?
Uploaded: 2021-10-21T10:46:14.000Z
Duration: 3 min 38 s
Description: COP26 Glasgow, the UN Climate Change Conference: last chance to save the planet?

Acute shortage of the fuel threatens to undermine the economy’s rebound from Covid-19, as industries must cut down on use or splash out on imports

It also highlights the dependence on dirty fuel of the world’s third-largest carbon emitter, which is yet to commit to net zero, even as the COP26 summit looms

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A worker carries a basket of charcoal at wholesale market in Mumbai, India. India, the third-biggest emitter of greenhouse gases, still relies on coal for about 70 per cent of electricity generation. Photo: Bloomberg

Penny MacRae

Published: 6:46pm, 21 Oct 2021Updated: 9:45pm, 21 Oct 2021

An acute shortage of coal, the Goliath of India’s energy mix, has forced industries to either pare back production or use expensive imported fuel, as supplies are prioritised for electricity providers servicing households.

The situation could undermine the country’s economic rebound from the devastating pandemic that plunged the country into a deep recession.

But it has also highlighted India’s continued heavy reliance on coal as an energy source in the run-up to the UN’s COP26 climate summit that opens in Glasgow at the end of the month aimed at pivoting the world away from planet-warming fossil fuels. India’s Environment Minister Bhupender Yadav told Reuters on Thursday that Prime Minister Narendra Modi would attend the summit, in what was seen as a boost for worldwide efforts for steeper emission cuts to fight global warming. Coal is used to supply 72 per cent of India’s electricity needs, compared to 60 per cent of China’s electricity generation.

A mix of factors has led to India’s coal shortage, including the weather, with heavy rains flooding mines.

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COP26 Glasgow, the UN Climate Change Conference: last chance to save the planet?

It’s an “immensely precarious situation” especially for energy-intensive sectors like aluminium, for which coal represents 40 per cent of production costs, Aluminium Association of India president Rahul Sharma said.