India remains one of the world's largest coal consumers, and recent shifts in its thermal coal import volumes are drawing the attention of analysts. A reduction in imports by 5.5 million tonnes in 2024, as reported by Kpler, has caught the eye of climate experts. However, behind these seemingly positive changes lie complex realities related to increased domestic coal usage.

Imports and Market Impact

At first glance, the reduction in coal imports by India might seem like a positive step, particularly in the context of global efforts to cut greenhouse gas emissions. However, the fact that India is compensating for the decrease in foreign supplies by ramping up domestic production is a source of concern for environmentalists.

Last year, India reached record levels of electricity production based on coal. This indicates that a reduction in imports does not necessarily mean a decreased reliance on this fossil fuel.

1. Growth in Domestic Production: The increasing share of domestic coal in the country’s energy mix leads to higher extraction volumes, which in turn harms the environment due to significant emissions.

2. Expansion of Coal Infrastructure: In the context of limited coal imports, India is actively modernizing and expanding existing coal mines.

3. Economic Incentives: The cost of domestic coal is often lower due to reduced logistical expenses, making it more attractive for local energy companies.

Environmental Implications

The increased use of domestic coal inevitably leads to higher carbon dioxide emissions, contravening India’s international commitments to reduce greenhouse gases. This step draws criticism from environmental organizations, warning about the growing ecological burden.

Environmental Impact

- Ecological Degradation: Increased scale of domestic coal extraction exacerbates environmental conditions, leading to soil erosion and water contamination.

- Public Health Effects: Rising levels of carbon dioxide emissions and other pollutants negatively impact the health of residents in major industrial regions.

The changes in coal imports and usage in India highlight the complex interplay between economic interests and environmental commitments. Reducing thermal coal imports has thus far only led to an increase in domestic production, raising sustainability concerns.