The Urgency of Phasing Out Coal
The Climate Change Performance Index released during COP30 in Brazil (November 2025) highlighted India's fall to 23rd place, primarily due to its slow progress in phasing out coal. Despite gains in renewable energy, coal remains a significant challenge due to its economic and employment implications in some states versus its environmental impact.
India's Energy Landscape
- Coal Dependency: Coal accounts for over half of India's total energy use, with 75% of electricity generation in 2024 coming from coal.
- Renewable Energy Growth: India doubled its clean energy capacity from 2021-25, with renewables now constituting half of the installed power capacity, but only one-fifth of the electricity was generated from these sources.
Case Study: Chile's Transition
Chile provides a blueprint for transitioning from coal to renewables through strategic policies and reforms.
- Employed a carbon tax of $5 per tonne in 2014.
- Implemented stringent emissions standards on coal plants.
- Utilized competitive auctions to promote wind and solar energy.
- Developed energy storage systems and committed to phasing out coal by 2040.
Challenges for India
- Deep coal dependency and limited economic diversification in coal regions like Jharkhand, Chhattisgarh, Odisha, and West Bengal.
- The social and economic impacts of sudden coal phaseouts include health risks and potential GDP losses (3%-10% by 2100).
Path Forward for India
- Decarbonization: Focus on removing the oldest power plants, halting new coal projects, and replacing coal with renewables backed by storage.
- Market and regulatory reforms including carbon pricing and removal of coal subsidies.
- Support for workers through reskilling and alternative livelihood opportunities.
- Establishment of funds like the "Green Energy Transition India Fund" to finance the transition.
The phaseout of coal should be a top political priority, accompanied by a detailed and actionable roadmap that emphasizes timelines, financing, market reforms, and peer learning—drawing lessons from examples like Chile.
