India's Coal Paradox on the Road to Net Zero

Synopsis

Despite the progressive growth of renewable energy, India has been producing over one billion tonnes of coal during 2025-26, the highest in its history. India produced more than a billion tonnes of coal during 2025-26 while simultaneously increasing renewable production at a new pace as well. The government think-tank NITI Aayog believes that the nation can still achieve its net zero target by 2070, which was a commitment made at COP26, by quickly expanding renewable and storage capacity after coal use goes into a sustained downward trend. This article sheds light on the statistics behind India's dual-track energy policy and some doubts it throws up on credibility and sequencing.

Make a note of Coal Output Achievements and Clean Energy Progress

Despite a decline in coal imports of around 8 per cent, India's coal production increased by almost 5 per cent year-on-year (YoY) to 1047.52 million tonnes (MT) in the financial year (FY) 2025-26, the Energy Statistics India 2026 report released by the Ministry of Statistics and Programme Implementation (MOSPI) showed.

The nation is still the second largest consumer of coal in the world, consuming about 14 per cent of the world's coal and the International Energy Agency has estimated that India and China will consume more than 70 per cent of the world's coal.

Meanwhile, India's non-fossil power capacity has surpassed 291 gigawatts, and the nation had achieved its Paris agreement target of 50 per cent non-fossil installed capacity five years early. Record coal production combined with record clean-energy growth does not seem to be a contradiction, but it is a sign of increased overall energy demand, officials say.

NITI Aayog's Long Pathway

India can still achieve its 2070 net zero goal without slowing coal use over the next decade or two, as long as it can be phased out in a timely manner by vigorously scaling up renewable and storage deployment towards the mid-century, according to a report from the National Institution of Technology & Innovation (NITI).

The think tank's estimates say fossil fuels would fall to about 87 per cent of primary energy in 2025, and to about 54 per cent by 2070, under current policy – and as low as 14 per cent with more ambitious decarbonisation plans, which include carbon capture technology.

The shortfall in the investments required for India to reach net zero by 2070 as against the investments required by a business-as-usual trajectory are estimated at up to $14.23 trillion by 2070 — highlighting the fact that moving from India's ambition to net zero to its current trajectory largely rests on the question of investment, or capital mobilisation.

NITI Aayog's Sectoral Insights report states that “In the short to medium term, coal will remain a part of the grid to ensure its reliability.”

Contested Interpretations

Not everyone sees India's mode of progress as easily believable. India's Net Zero target has been rated as a ‘poor' on both the Transparency and Ambition criteria by the Climate Action Tracker, due to the ease with which the interim renewable targets for the National Electricity Plan 2023 have fallen short of the planned targets.

In a draft government plan, other analysts cite an assumption that carbon capture technology will be widely used in industry, which is still largely untested in India on scale.

The government's argument, which has been laid out in various budget and policy documents, is that coal is expected to continue to play a role in grid reliability during peak demand times despite its declining role in the energy mix, a shift which, the government says, is "gradual by design, but delayed by default.