Coal news and updates

India needs to weigh options before partnership with G7 countries to accelerate a just energy transition

• The G7 countries recently announced a just energy transition partnership with Indonesia. India is one of the countries next in line for such a partnership which accelerates the shift from fossil fuel to renewable energy in a socially and environmentally just way.
• After a breakthrough in the 2022 climate talks in Egypt, on setting up a fund for loss and damage, there could be a hardened focus on a just transition to tackle the impact on millions dependent on the coal economy.
• A just transition in India requires more attention to socioeconomic aspects as mine closures affect a large number of informal workers, upending lives and livelihoods that require support through reskilling and economic diversification.

The G7 countries recently announced a partnership with Indonesia to accelerate a just energy transition, away from fossil fuels and towards renewable energy. Next in line, is likely to be India, which, along with Vietnam and Senegal, is one among the four countries that is set to sign a similar pact with the G7 countries for initiatives towards decarbonising energy systems and increasing energy efficiency.

The U.S. President Joe Biden, Japan Prime Minister Fumio Kishida, and Indonesia President Joko Widodo on November 15 announced the Just Energy Transition Partnership (JETP) for Indonesia at the G20 Leaders’ Summit in Bali. They pledged an initial $20 billion in public and private finance in 3-5 years to help Indonesia phase out coal and hasten the clean energy transition. It is said to be the largest single country-specific climate investment ever.

JETP is the second energy transition partnership between developed economies and developing countries, following South Africa’s $8.5 billion agreement announced at last year’s UN climate summit in Glasgow. South Africa’s investment plan and the composition of public financing were unveiled on the eve of this year’s UN climate summit in Egypt.

The South African model of just transition, where more than 95% of the funding is in low-interest loans, may not be appropriate in India, according to Chandra Bhushan, CEO of the International Forum for Environment, Sustainability & Technology, a non-profit that has published several reports on the coal economy. “There has been a lot of international pressure on India to adopt a similar plan, but the country has done well not to have submitted to it,” he said.

In addition, the scale and challenges of the coal sector in India, as compared to that in South Africa, is different. The coal sector in South Africa is highly unionised, said Crispian Olver, executive director of the Presidential Climate Commission in South Africa. At around 100,000 workers, it is also much smaller than India’s. Coal India alone employs more than a quarter million people. A few million more are directly or indirectly involved in the sector that, includes washeries, transport, and ancillary services.

The Indian government should prepare and negotiate a JETP that works for the country and is significant in solving the climate problem, given the size of the coal ecosystem and the country’s substantial dependence on coal, said Sandeep Pai, senior research lead at the Center for Strategic and International Studies.

So far, there are no specific estimates on how much funding will be needed to shut down India’s coal infrastructure and at the same time protect the livelihoods of the millions of people dependent on the industry, Pai said, suggesting a detailed assessment of the need.