India's net zero roadmap sees coal demand peaking by 2050 before steep fall

Niti Aayog's Net Zero reports project coal demand rising till 2047 even as India scales up clean energy, electrifies industry and transport, and targets net zero emissions by 2070

India is expected to consume 1.83 billion tonnes of coal, an almost 75 per cent rise from current levels, by 2050, according to the Net Zero study reports released by Niti Aayog this week. But two decades later, production from India’s largest source of fossil fuel will be almost vestigial.

 

The 11 reports are part of the government’s multi-sectoral assessment of development scenarios that deliver both on the Viksit Bharat 2047 agenda while simultaneously reducing net greenhouse gas emissions to zero by 2070. The reports also note that from now till 2050, India will need an investment of $8.05 trillion at a strike rate of $90 billion annually, “equivalent to about 2–2.5 per cent of India’s GDP in 2025”. They also spell out in detail the investment opportunities that will open up in the economy for domestic and foreign companies.

 

Releasing the first set of three reports, BVR Subrahmanyam, CEO, Niti Aayog, said the choices were clear. India’s net zero journey must reflect its national circumstances. The report notes that during this journey, Indian energy consumption will rise by 2.5 times, necessary for “meeting regional disparities in economic and energy development, and the imperative to lift millions out of energy poverty”.

 

Tanmay Kumar, secretary, Union Ministry of Environment and Forests, said the reports provide details about what will be the constituents of India’s net zero goals.

What do Niti Aayog’s Net Zero reports project for India’s growth?

Subrahmanyam said the reports model both business-as-usual as well as net zero goals. He said the transition to net zero will have only a marginal impact on the growth rate of the economy as projected, “with differential impacts depending on source of financing and productivity of incremental finance, while fossil fuel-based manufacturing declined”.

 

The first report, Scenarios Towards Viksit Bharat and India’s Net Zero: An Overview, notes that the journey from 2026 must reflect India’s national circumstances. These are a relatively low per capita energy consumption (about one-third of the global average), the need to maintain a high use of coal in electricity generation, and providing for India’s ambition, which will need a cumulative financing investment of $22.7 trillion till 2070.

 

This is the first time that a government of India agency has laid out a detailed road map for its net zero goals. At successive annual global COP meetings, Indian representatives have often been asked about this omission. The Niti Aayog set of reports finally offer a clear idea, based on detailed modelling exercises, of how India plans to reach the target.

Why coal use will keep rising even as clean energy scales up

The key to the net zero ambition is to make all vehicles and most industrial processes run on electricity. Clearly stated, India’s coal consumption will go up till 2047 even as energy intensity decreases and efficiency goes up, while meeting net zero goals. India can leapfrog to be a global leader in clean technologies. Eighty-five per cent of India of 2047 is yet to be built and can be built to be climate friendly.

 

“To do that, the total amount of power to be generated from coal is projected to rise from 268 GW in 2025 to around 450–470 GW in the business-as-usual scenario and a lower 400 GW in the net zero path, both by 2050. The (coal) capacity in subsequent decades is projected to decline due to substantial non-fossil capacity addition in both the scenarios.”

 

The report has a succinct note on what the investment pattern will entail. “This shift underscores the need to review new coal investments. Any upcoming plants must be designed for deep turndown, fast ramping, low minimum loads, and cycling capability,” the Niti Aayog CEO said. He added that “first, we need to electrify energy use, convert those to green and clean electricity. Next, control demand through Mission LiFE and focus on circularity and efficiency”. To do all this, however, India will need access to cheaper external finance.

 

“These early years are the most challenging, as investments must be front-loaded in renewable capacity, grid expansion, and industrial decarbonisation technologies,” the report spells out.

 

The changes will also have a positive spin-off on total investment in the economy. The share of public and private investment combined is expected to climb from roughly 32 per cent in 2025 to a peak of 36 per cent by 2050, “reflecting capital deepening, before easing to 34 per cent by 2070 as the economy matures”.

How coal demand is projected to fall sharply after 2050

Coal demand in the economy is projected to reach 1,827 million tonnes by 2050 but then come down sharply to just 161 million tonnes by 2070.

 

“As the power sector transitions largely to non-fossil fuel-based electricity, the residual coal majorly serves industrial load. These industrial loads are in hard-to-abate sectors such as steel and cement, where viable low-carbon alternatives are still emerging.”

 

The projections also make a crucial point. By 2070, all remaining coal use will have to be paired with carbon capture, utilisation, and storage (CCUS) to achieve net zero emissions. Across both the base-level scenarios and that of net zero, India’s abundant coal reserves, combined with potential CCUS deployment, could provide opportunities for cleaner coal utilisation, it says. Technologies such as advanced ultra supercritical plants, coal gasification, and coal-to-chemicals (for example, methanol and ammonia) can offer lower-carbon pathways, especially when integrated with carbon capture and storage technologies.