Coal still at the core: What India’s energy story cannot ignore

Coal rarely gets good PR. Say the word and most people picture smog, soot, and destruction. It is the fossil fuel no one wants to love, but the inconvenient truth is India still runs on coal, and that will not change overnight.

Nearly half of India’s energy demand is met by coal. This is not only as a result of legacy systems, but also due t? scale, cost, and availability. When powering a nation of 1.4 billion people, energy access is not a luxury. It is the backbone ?f development.

India uses around 1 billion t ?f coal every year. Coal India Limited (CIL) alone ?s responsible for 800 million t, ?r 82% ?f all domestic production. It ?s the largest government-owned coal miner ?n the world. This dominance ?s the result ?f a bold policy shift ?n the 1970s. Until then, coal mining was a fragmented and hazardous private sector operation. Nationalisation ?n 1971 and the formation ?f CIL ?n 1975 brought scale, structure, and safer practices t? a chaotic industry.

But domestic coal is not enough. Most Indian coal ?s low ?n calorific value, which means ?t burns less efficiently. T? meet performance and industrial needs, it is blended with higher-grade imported coal, mostly from Australia and Indonesia. Every year, India imports 60 million t ?f coking coal (used ?n steelmaking) and 200 million t ?f non-coking coal (used ?n power and industry).

This import dependency comes at a cost. Global price swings, geopolitical risks, and logistics bottlenecks all impact supply. That is why CIL ?s now eyeing overseas mining assets, such as those ?n Mozambique, t? secure high-grade reserves and reduce vulnerability.

Coal’s importance is not limited t? energy, it is also a massive logistical engine – one ?f the largest commodities handled at Indian ports, shaping cargo volumes, rail traffic, and coastal shipping patterns. Every change ?n coal import policy ?r domestic production targets sets off ripple effects. This ?s something AGR has tracked closely for over two decades across key ports like Paradip, Vizag, and Tuticorin.

However, the dominance ?f coal ?s being challenged slowly but steadily. The energy mix ?s diversifying. Alternatives like lignite, petcoke, biomass, industrial waste, and even green hydrogen are entering the picture:

• Biomass co-firing ?s being scaled ?n thermal plants and cement kilns t? cut emissions.
• Petcoke, with its high energy density, ?s a popular alternative ?n the cement sector.
• India ?s investing ?n green hydrogen under the National Hydrogen Mission.
• There ?s growing momentum behind a coal-to-chemicals strategy t? reduce reliance ?n imported crude oil.

Still, economics will ultimately drive adoption. Until cleaner alternatives become cheaper, more scalable, and better integrated into industrial systems, coal will remain the default, especially for power and heavy industry.

So where does this leave us?

India’s coal story is not black and white. It is not just a relic ?f the past, it ?s a pillar ?f the present and a variable ?n the future. Dismissing ?t as dirty and outdated oversimplifies a very complex equation. Coal is not going away tomorrow. Instead, ?t ?s being repositioned as a bridge fuel ?n India’s long and difficult energy transition.

As AGR continues t? monitor coal’s evolving role across mining, imports, ports, and policy, one thing ?s clear: the energy transition is not about flipping a switch, but rewiring the entire system. And for now, coal still powers much ?f that circuit.

Read the article online at: https://www.worldcoal.com/mining/12082025/coal-still-at-the-core-what-indias-energy-story-cannot-ignore/