India's power sector emissions remained flat for the first half of 2026, primarily due to significant growth in clean energy sources meeting rising electricity demand.
A remarkable surge in clean energy has effectively stabilized carbon dioxide (CO2) emissions from India's power sector, maintaining levels consistent with those from 2024. This period marks the first instance in over half a century without growth in coal power, even as electricity demand continues to climb overall.
According to the latest biannual analysis provided by the Centre for Research on Energy and Clean Air (CREA), emissions in India’s power sector remained unchanged from the first half of 2024 to the first half of 2026, despite an overall increase in electricity consumption. In contrast, emissions from heavy industry during the same period saw a notable rise, contributing to a 3.7% year-on-year growth in total national emissions in the first half of 2026.
Flatlining Fossils
For the past two years, India's CO2 emissions from fossil fuels and cement have grown at an unprecedentedly slow rate, owing to the rapid expansion of clean-energy resources and stagnant oil demand. Notably, emissions from the power sector mirrored the levels of two years prior, with the slight 2.2% decline experienced in the first half of 2025 being countered by a 2.3% uptick so far in 2026.
The patterns signal a significant shift away from coal dependency and towards clean energy sources, which have met the heightened electricity demand nearly in full. With a 7% overall increase in electricity consumption over this two-year stretch, the addition of clean energy generation comprised solely of solar, wind, nuclear, and hydro contributions was enough to negate any growth in coal-based generation.
Clean Energy Growth Matches Power Demand
The two-year stretch from early 2024 to early 2026 encompasses the largest jump in non-fossil power generation that India has recorded to date. This upsurge in clean energy allowed emissions from fossil fuel consumption and CO2 outputs to remain steady despite rising electricity usage. Solar energy alone witnessed a 44 terawatt-hour (TWh) increase, a major contributor to this clean energy legacy, alongside wind (13TWh), nuclear (7TWh), and hydropower (8TWh).
In total, clean-energy sources contributed an increase of 70TWh, eclipsing the net rise in power demand. With ongoing advancements in energy storage, India looks set to further capitalize on this trend. Plans are already underway to meet increasing demands for energy storage across the country, as renewable generation is expected to account for more of the overall energy mix.
Which States Led the Clean-Power Shift?
Gujarat has emerged as a front-runner in the transition from fossil fuels to clean energy, showing both significant declines in coal power generation and robust growth in clean energy capacity. Following Gujarat, Rajasthan and Tamil Nadu also reported increases in clean-power generation while cutting back on fossil-fuel consumption. The momentum created in these states reflects a landscape-wide shift towards cleaner energy and growing acceptance of renewables as a reliable energy source.
Other states, including Madhya Pradesh and West Bengal, experienced declines in fossil-fuel generation, though this was often attributed to heightened net imports rather than local clean power expansion. Meanwhile, states like Maharashtra and Telangana, which faced significant increases in power demand, were able to nearly match their growth through enhanced clean-energy generation.
Fall in Oil and Gas Consumption Continues
Across the board, India also saw a continued decline in oil consumption in the first half of 2026, which clocked a 1.3% reduction year-on-year. This downturn, following a 0.7% drop in the previous year, was driven partly by decreases in liquefied petroleum gas (LPG) and petcoke consumption. Despite a surge in diesel and petrol use, the overall trend remains downward.
Diesel consumption increased by over 4% thanks to heightened agricultural demand and supporting freight operations, while petrol also rebounded with a 6.9% uptick in consumption. Contributions from blending ethanol with petrol have moderated this growth, allowing India to meet its ambitious blending targets ahead of schedule.
Rapid Emission Growth from Heavy Industry Continues
While CO2 emissions from the power sector remained unchanged, emissions from heavy industries, particularly steel and cement, saw marked increases. Emission growth from these sectors reached 8% year-on-year in early 2026, which now constitutes a staggering 23% of India’s overall CO2 output.
Encouraging investment in the real estate sector spurred growth in steel production, with consumption outpacing production figures, leading companies to draw down inventory levels. However, rising raw material costs, particularly related to coking coal, have pressured profit margins across the manufacturing landscape. The latest figures indicate a robust yet strain-laden trajectory for industrial emissions moving forward.
New Investments in Coal
Despite the advancements in clean energy, investment plans for coal infrastructure remain robust. Approximately 43GW of coal-power capacity was under construction at mid-2026, reflecting the government's belief in its necessity for meeting increasing peak electricity loads. While solar and energy storage are already contributing to covering day and evening demands, broader investments in new coal infrastructure persist, raising concerns about the future role of coal in India's energy matrix.
Plans for coal gasification are also in the works, aiming at processing substantial quantities of coal into various chemical feedstocks, including fertilisers. These investments risk locking in coal use for extended periods, posing challenges for emission reduction goals and further complicating the energy transition.
Outlook for India’s Emissions
The past two years have demonstrated significant progress in India's clean-energy expansion. It has been crucial in not only meeting power demand but also reducing reliance on fossil fuels, leading to a notable reduction in imported coal and gas consumption. However, for this growth trajectory to continue, India faces numerous challenges, including upgrading its transmission infrastructure and enhancing the flexibility of existing coal-powered plants.
The government is under pressure to complete renewable projects and address curtailment issues that hinder generation efficiencies. There are also regulatory challenges awaiting resolution regarding coal power plant flexibility, essential for synchronizing with renewable energy output. As investments in energy storage ramp up, the goal is to alleviate bottlenecks currently tied to transmission and grid constraints.
While overall emissions may have plateaued in the power sector and oil consumption has stabilized, concerns remain that industrial emissions could continue to rise without greater electrification of India's industrial sector. A persistent reliance on fossil fuels in key industries could mean that growing output leads to increased emissions unless significant transitions occur soon.
About the Data
Estimates for coal-power emissions are obtained through a combination of coal consumption reported by the Central Electricity Authority and associated calorific values alongside emission factors applicable to different coal varieties.
The approach also encompasses detailed assessments of industrial production indices, establishing a correlation between output and fossil fuel utilization for industries including cement and steel manufacturing. This comprehensive view reflects current energy dynamics, forecasting shifts while being cognizant of economic and regulatory challenges that lie ahead.
