India's Mineral Dependency and Coal Phase-Down: Economic Survey 2023-24
COAL & MINING

India's Mineral Dependency and Coal Phase-Down: Economic Survey 2023-24

The Economic Survey 2023-24, tabled in Parliament emphasizes the urgent need for India to recognize and tackle the challenges posed by its dependence on China for critical minerals, essential for e-mobility and renewable energy. It also underscores the need to evaluate the economic impacts of phasing down coal on bank balance sheets as India accelerates its green transition.

As part of its national commitment to limiting the global temperature rise to 1.5 degrees Celsius, India has pledged to reduce emissions by 45% below 2005 levels by 2030, achieve 50% cumulative electric installed capacity from non-fossil fuel-based sources, and create a carbon sink of 2.5 to 3 gigatons of CO2 equivalent through additional forest and tree cover.

The report highlights the necessity of addressing the challenges posed by reliance on China for critical minerals, crucial for e-mobility and renewable energy generation. It also points out the need to examine the impact of reducing coal use on Indian Railways' freight revenues and the overall balance sheets of banks.

Internationally, India has faced pressure from developed countries to rapidly phase down unabated coal power. At forums such as the annual UN climate conferences, India has defended the coal interests of the Global South, arguing that historically responsible developed nations should not hinder the development of these regions. India currently relies on coal for about 70% of its power generation.

The economic survey also stresses the importance of developing or acquiring affordable storage technology for renewable energy, considering India's limited land and capital resources. It calls for a decision on the role and share of nuclear energy in the national energy mix.

According to the International Energy Agency, China commissioned as much solar PV in 2023 as the entire world did in 2022, with significant growth in wind additions. The survey also underscores nuclear energy as the cleanest and safest option, despite public concerns over rare but impactful events like Three Mile Island, Chernobyl, and Fukushima.

Lastly, the survey calls for consistency in e-mobility policies, ensuring the optimal energy mix and grid stability for widespread adoption. It also suggests studying the implications of replacing internal combustion engine vehicles with electric ones, particularly on petrol and diesel sales and the associated tax revenues.

The Economic Survey 2023-24, tabled in Parliament emphasizes the urgent need for India to recognize and tackle the challenges posed by its dependence on China for critical minerals, essential for e-mobility and renewable energy. It also underscores the need to evaluate the economic impacts of phasing down coal on bank balance sheets as India accelerates its green transition. As part of its national commitment to limiting the global temperature rise to 1.5 degrees Celsius, India has pledged to reduce emissions by 45% below 2005 levels by 2030, achieve 50% cumulative electric installed capacity from non-fossil fuel-based sources, and create a carbon sink of 2.5 to 3 gigatons of CO2 equivalent through additional forest and tree cover. The report highlights the necessity of addressing the challenges posed by reliance on China for critical minerals, crucial for e-mobility and renewable energy generation. It also points out the need to examine the impact of reducing coal use on Indian Railways' freight revenues and the overall balance sheets of banks. Internationally, India has faced pressure from developed countries to rapidly phase down unabated coal power. At forums such as the annual UN climate conferences, India has defended the coal interests of the Global South, arguing that historically responsible developed nations should not hinder the development of these regions. India currently relies on coal for about 70% of its power generation. The economic survey also stresses the importance of developing or acquiring affordable storage technology for renewable energy, considering India's limited land and capital resources. It calls for a decision on the role and share of nuclear energy in the national energy mix. According to the International Energy Agency, China commissioned as much solar PV in 2023 as the entire world did in 2022, with significant growth in wind additions. The survey also underscores nuclear energy as the cleanest and safest option, despite public concerns over rare but impactful events like Three Mile Island, Chernobyl, and Fukushima. Lastly, the survey calls for consistency in e-mobility policies, ensuring the optimal energy mix and grid stability for widespread adoption. It also suggests studying the implications of replacing internal combustion engine vehicles with electric ones, particularly on petrol and diesel sales and the associated tax revenues.

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