India sees no growth in power sector CO2 emissions as clean energy rises: Report
A recent analysis found that India's power-sector carbon dioxide emissions registered no growth for two consecutive years (comparing the first half of 2024 with the first half of 2026), the first time in over five decades that coal-based power generation has stayed flat over a two-year span even as electricity demand kept rising.
The flattening was driven by a sustained surge in clean energy capacity additions, alongside a two-year decline in oil and gas consumption in the power sector.
Economy-wide emissions still rose by an estimated 3.7% year-on-year, as growth shifted to other carbon-intensive sectors — steel and cement emissions grew around 8% year-on-year and together now account for roughly 23% of India's total CO2 emissions.
The report flagged that sustaining the clean-energy trend will require upgrading the electricity grid, scaling up energy storage, and making coal-based generation more flexible to balance variable renewable supply.
India's Panchamrit Commitments (COP26, 2021)
At COP26 in Glasgow (2021), India announced five climate commitments known as "Panchamrit" (five nectar elements): reaching 500 GW of non-fossil fuel energy capacity by 2030; meeting 50% of energy requirements from renewable sources by 2030; reducing total projected carbon emissions by one billion tonnes by 2030; reducing the carbon intensity of GDP by 45% by 2030 (from 2005 levels); and achieving net-zero emissions by 2070.
Key Details
- These targets were formalised in India's Updated Nationally Determined Contribution (NDC) submitted to the UNFCCC in August 2022, which strengthened the earlier 2015 NDC (33-35% emissions-intensity cut, 40% non-fossil capacity) to 45% and 50% respectively.
- As of early 2026, India had reportedly reached about 271-272 GW of installed non-fossil fuel capacity, meaning annual additions must roughly triple (to ~46 GW/year) to hit the 500 GW target by 2030.
- Net-zero by 2070 is a long-term pledge, distinct from the 2030 interim targets, and is not part of India's formal NDC submission.
The flattening of power-sector emissions is the clearest sign yet that clean-energy capacity growth (aligned with the Panchamrit/NDC targets) is beginning to decouple electricity generation from emissions growth, even as demand rises.
Renewable Purchase Obligation (RPO) Mechanism
The RPO is the principal regulatory instrument compelling discoms (distribution companies) and other "obligated entities" to source a mandated share of their power from renewable sources, without which large-scale renewable integration would lack a demand-side anchor.
Key Details
- Statutory basis: Section 86(1)(e) of the Electricity Act, 2003, empowers State Electricity Regulatory Commissions (SERCs) to specify RPO trajectories for utilities in their state.
- The Ministry of Power's 2022 order set a uniform national RPO trajectory rising from 24.61% in FY 2022-23 to 43.33% by FY 2029-30, split into Solar and Non-Solar RPO categories.
- This national RPO trajectory is calibrated to align with the 500 GW non-fossil capacity target under India's NDC.
- Non-compliance is enforced through Renewable Energy Certificates (RECs), which allow obligated entities to meet RPO targets by purchasing certificates rather than physically procuring renewable power.
RPOs create the regulated demand that has driven the renewable capacity additions responsible for keeping power-sector emissions flat despite rising electricity consumption.
Carbon Intensity and India's CBAM Exposure
Carbon intensity of GDP (emissions per unit of economic output) is the key metric India uses for its 2030 NDC pledge, distinct from absolute emissions — India's economy can keep growing while its carbon intensity falls, even if absolute emissions from some sectors (like steel and cement) continue to rise.
Key Details
- The report's finding that steel and cement — not power — now drive emissions growth is significant because the EU's Carbon Border Adjustment Mechanism (CBAM), which took effect on 1 January 2026, applies a carbon levy on imports of iron, steel, cement, aluminium, fertilisers, hydrogen, and electricity based on embedded emissions.
- India has estimated CBAM could impose an average tax burden of around 25% on affected exports, with steel exports facing an estimated 8-14% cost increase, given India's continued reliance on coal-based steelmaking.
- This creates a policy tension: India's power sector is decarbonising fastest, while its hardest-to-abate, trade-exposed industrial sectors (steel, cement) lag and face the sharpest external carbon-pricing pressure.
The same report that shows power-sector success also flags steel and cement as the new emissions growth driver — precisely the sectors most exposed to CBAM, making decarbonisation in these industries a live trade and economic policy concern for India, not just an environmental one.
- Power-sector CO2 emissions: no growth from H1 2024 to H1 2026 (first two-year flat period for coal power in over 50 years)
- Economy-wide emissions growth: ~3.7% year-on-year in H1 2026
- Steel and cement emissions growth: ~8% year-on-year; combined ~23% share of India's total CO2 emissions
- Panchamrit/NDC 2030 targets: 500 GW non-fossil capacity, 50% renewable energy share, 45% cut in GDP carbon intensity (from 2005 levels), net-zero by 2070
- National RPO trajectory: 24.61% (FY 2022-23) rising to 43.33% (FY 2029-30)
- Estimated non-fossil capacity achieved (early 2026): ~271-272 GW against the 500 GW target
- EU CBAM effective date: 1 January 2026; covers iron/steel, cement, aluminium, fertilisers, hydrogen, electricity