India’s coal transition likely to be a “messy and complicated exercise”

Asked if this transition can be termed ‘just’ if coal mines are not closed scientifically, Kavya Singhal, who is one of the authors of the study, said “given that coal consumption will not peter out immediately, closures will likely be planned for districts and mines with least and less production.”

While discussing the lack of environmental remediation and land rehabilitation of 123 mines closed since 2008, she told Mongabay-India that “one of the reasons can be that India does not have a financial system in place for planning early closures.”

“India will need to communicate at the global level about the scale of these transitions and demand climate finance to manage and implement the strategy. While the District Mineral Fund can be leveraged for providing short-term funding, without external funding it is unlikely that the scope of the transition only on livelihoods can be met,” Singhal explained.

“Another challenge is to de-risk these coal-bearing regions, since, over the years these regions have been destroyed in terms of land, air, water, etc. Hence, for the purpose of economic regeneration, multilateral development banks will need to de-risk coal-bearing areas during the transition to facilitate green investments,” she said.

Singhal stressed the non-alignment of “state, national, and sector roadmaps at the planning level” as another major factor hampering the ‘just’ closure of coal mines.

“At present, there is an imbalance, because decision making for energy is concentrated at the central government level, while planning and implementation, with regard to the human development indicators like education, health, etc. take place at the state government level. Hence, the current governance structure is unlikely to yield results,” she said.

For instance, Indian Railways are heavily reliant on coal with about 44 percent of their revenues coming from coal. “In our conversations with stakeholders, the roadmap for railways remained unclear in a post-coal world,” said the study while noting that a well-planned transition and advance planning can take care of such challenges.

At present, the Indian government does not have a mine closure framework in place. But recently, India has decided to seek the assistance of nearly one billion U.S. dollars (about Rs. 75 billion or Rs. 7,500 crores) from the World Bank to develop a comprehensive framework for handling closures of coal mines and undertake pilot projects for the socio-economic transformation of the country’s coal mining areas.

However, Singhal warned that “if the mine closures are not well-planned in a just manner, then they can lead to inadequate social protections for workers and communities, and inadequate environmental remediation and re-purposing of lands and assets.”

Coal is the main pillar of India’s energy sector. In 2021, it said, India consumed 932 million tonnes of coal, 77 percent of which came from domestic production and 90 percent of which was used for power generation.

But, according to the study, a mine-wise estimate of (coal) reserves shows India’s big and other mines, which produce 85 per cent of the coal in the country, will likely be the ones running for the next 20-30 years. “Most underground mines and rest of mines will likely be shut down within this decade. Preparing a timeline of mine closure will be most effective using the reserve estimates,” it said.

Nearly a third of Indian districts have coal sector-linked assets 

The NFI study said that millions of Indians depend on the coal economy directly or indirectly. It highlighted that more than 13 million Indians are employed in coal mining, transport, power, sponge iron, steel, and bricks sectors.

But the real number could be much more as it notes that the study does not include those in the informal sector in coal mining, the labour involved in coal imports, indirect activities in the iron and steel sector including third-party sellers, warehousing staff, the dependents of workers or even third-party vendors like equipment manufacturers.

It emphasised that conversations with stakeholders suggest that “only including the informal coal economy would likely take this dependency to more than 20 million people or the population of Sri Lanka.”

According to the study, at the national level, 266 districts (one in every three of India’s districts) have at least one asset linked to the coal sector. Of these 266 districts, 135 districts have two or more assets dependent on coal – a coal mine, thermal power plant, sponge iron plant, steel plant etc.

It was, however, said that if the bricks sector was excluded (which is mostly informal and the numbers fluctuate year on year), the number of people dependent on coal would still be around 2.5 million people, the majority of which are concentrated in India’s central and eastern states – West Bengal, Jharkhand, Chhattisgarh, Odisha, and Madhya Pradesh.

Thus, the study said, the real challenge that faces India today is “transitioning entire regions and districts, finding livelihood opportunities for a population the size of smaller countries, and meeting our development and climate goals.”

“The scale and size of this transition alone makes it unprecedented in the history of coal transitions across the world,” it said while stating that labour unions have to become a necessary part of this conversation to bridge the communication gap between the management, governments, and the larger labour force.

The author of the study Kavya Singhal stressed the ‘just transition’ strategies “need to be framed in a way that these workers are included from the get-go, or else they may not be beneficiaries of the transition policies.” A just transition ensures that a shift from fossil fuels to clean energy is done in a manner that is just and equitable for the workers and also takes into consideration the social and environmental impacts.

She, however, admitted that the conversation for India to transition away from coal is just beginning and the planning on addressing the issues associated with phasing-down coal has not yet begun.

According to the study, characteristics endemic to the Indian labour market complicates this transition process further. For instance, it includes the large presence of contract/off-roll labour in every sector who “may not be beneficiaries of the transition policies” as the “informality limits institutional support mechanisms like unions.”

It explained that coal transport by road, for example, is most vulnerable to the transition given increasing mechanisation, and probably the first to be impacted, but lacks a union or other institutional mechanism to make a case for them as coal transition workers.

Similarly, according to the study, the brick sector may not even be viewed as a coal transition sector, given the labour is “employed for six months in a year, is migratory by nature and therefore there are no official records on the number of people employed in the sector or a platform for the labour to be a part of the discussion.”

It recommended India to define “coal transition worker across different sectors with targeted emphasis on contract/informal labour and their socio-economic profile” as it emphasised that “without this it is possible that a significant chunk of the labour force will not be beneficiaries of the transition policies.”

Meanwhile, during the recent Glasgow climate summit, India announced a net-zero target by 2070. But even as there are discussions on phasing out coal mining, the Indian government has been discussing increasing coal mining in the country and taking its domestic production to a billion tonnes per year.

On this, the study said that “strategies towards decarbonisation cannot be undertaken with simultaneous investment and expansion of the coal sector and its allied uses” as this will impede investments needed to meet the net-zero target and continue the carbon lock-in with possibilities of stranded investments.

“Formal numbers of coal employment are a drop in the bucket when it comes to estimating labour in coal mining. There is a large presence of contract/off-roll labour in coal and coal-allied sectors. The share of off-roll labour accounts for at least 70 percent of the total labour across all sectors. However, official labour estimates in different sectors do not account for this labour since they are employed by job contractors” Singhal said.