The Indian Government has announced a significant recalibration of its 2015 mandate for installing flue-gas desulphurisation (FGD) systems in coal-fired power plants. This strategic policy adjustment, driven by comprehensive scientific analysis, is poised to reduce electricity costs by an estimated ₹0.25 to ₹0.30 per unit. The move reflects a nuanced approach to environmental regulation, balancing the imperative for cleaner energy with the realities of energy affordability and the nation’s ambitious sustainable development goals.
This pivotal announcement coincides with a remarkable surge in India’s renewable power output, which recorded its fastest growth since 2022 during the first half of 2025. Concurrently, coal-fired generation experienced a notable decline of nearly 3%, indicating a gradual but definite shift in the energy mix. While fossil fuels still accounted for over two-thirds of the overall increase in power generation last year, the early achievement of the 50% non-fossil capacity target highlights a strategic pivot towards cleaner energy sources.
The nation’s ambitious clean energy trajectory includes a revised target of 500 GW of non-fossil capacity by 2030, encompassing hydro and nuclear power alongside solar and wind. This aggressive goal, despite missing the initial 2022 renewable target of 175 GW, demonstrates a renewed vigour in renewable energy deployment. The government’s proactive stance is further evidenced by its push for advanced energy solutions such as battery storage, promoting circularity in solar and wind components, and fostering green hydrogen initiatives to deepen decarbonisation efforts across the energy sector.
The rapid scaling of renewable energy infrastructure is crucial for fostering sustainable urban development. By reducing reliance on fossil fuels, India is directly addressing air pollution and carbon emissions, leading to healthier urban environments. This transition also supports equitable access to energy, particularly in remote areas, and promotes gender-neutral growth by creating new employment opportunities in the green energy sector, ensuring that the benefits of development are shared more broadly across society.
Quantitatively, India’s commitment to renewables is evident in its impressive capacity additions. The country installed nearly 28 GW of solar and wind power in 2024 alone. Furthermore, in the first five months through May of the current year, an additional 16.3 GW of wind and solar capacity has already been integrated into the national grid. Excluding large hydro projects, renewable energy sources accounted for approximately 184.6 GW as of the end of June, showcasing a robust and expanding clean energy portfolio.
While India plans to expand coal-fired capacity by 80 GW by 2032 to meet escalating demand, this is viewed as a transitional measure to ensure energy security during the ongoing clean energy shift. The early achievement of the 50% non-fossil power milestone provides a strong foundation for future growth, enabling the nation to balance its energy needs with its environmental commitments. This strategic balance is vital for building a resilient economy that integrates environmental stewardship and social equity, paving the way for truly sustainable urban and industrial development.
The new rules for SO2 emissions will apply only to plants within 10 kilometres of cities with populations exceeding one million, while other sites will be exempt. This differentiated compliance approach is based on proximity to urban populations and the sulphur content of the coal used. The decision, detailed in a government gazette notification, follows a comprehensive analysis by the Central Pollution Control Board. Their findings indicated that the operation of existing control measures, such as FGD systems, could lead to increased carbon dioxide emissions, prompting a re-evaluation of the universal mandate.
Research conducted by institutions such as IIT Delhi, CSIR-NEERI, and the National Institute of Advanced Studies (NIAS) underpinned this policy change. These studies revealed that ambient sulphur dioxide levels in most parts of India are well within the National Ambient Air Quality Standards, typically ranging between three and 20 micrograms per cubic metre against a limit of 80 micrograms per cubic metre. Furthermore, these analyses raised questions about the environmental and economic benefits of universally mandating FGD systems in India, where coal generally has a relatively low sulphur content of less than 0.5%. The NIAS study specifically highlighted potential environmental drawbacks, including an additional 69 million tonnes of CO₂ emissions from 2025 to 2030 due to activities associated with FGD systems, such as limestone mining and transportation.
The anticipated reduction in electricity costs, expected to be between ₹0.25 and ₹0.30 per unit, is poised to directly benefit consumers. This cost-saving measure holds particular significance in India’s high-demand, cost-sensitive energy market, where it could empower state electricity distribution companies to contain tariffs and reduce government subsidies. The financial implications of a previously estimated mandatory FGD retrofitting were substantial, projected at over ₹2.5 trillion, equating to ₹120 million per megawatt, with installation timelines extending up to 45 days per unit.
This policy adjustment, while controversial to some, reflects a pragmatic approach to environmental regulation that seeks to optimise outcomes based on scientific evidence and economic realities. By selectively applying emission control measures, the government aims to ensure that environmental policies are both effective and economically viable, supporting the nation’s broader goals of energy security and sustainable development without imposing undue burdens where the environmental benefit is deemed marginal. This ongoing evolution in policy demonstrates India’s dynamic approach to balancing its developmental aspirations with its commitment to a cleaner, healthier future.
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