India’s Oil and Gas Subsidies Down 70%, But Coal Bailouts Continue
India cut its oil and gas subsidies 70% between 2014 and 2017 and increased renewables subsidies six-fold over the same period, according to an analysis issued late last year by the International Institute of Sustainable Development (IISD) and the Delhi-based Council on Energy, Environment and Water (CEEW).
Yet “oil and gas subsidies remain three times higher than the subsidies given to renewable energy projects and electric vehicles,” the Hindustan Times reports, citing the analysis, and “the subsidy to coal power remains stable despite its pollution potential.”
Fossil subsidies fell from the equivalent of US$29 to $8 billion over the three years. Renewable subsidies increased by about $871 million between 2016 and 2017.
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“A growing share of subsidies is dedicated to making India’s energy mix cleaner,” said IISD co-author Vibhuti Garg. “Despite this, subsidies to oil, gas, and coal were more than three times the value of subsidies to renewables and electric vehicles in India in FY17. The government must redirect more subsidies to cleaner energy sources to achieve its goals of cutting greenhouse gas emissions and air pollution, as well as to exceed the 175 gigawatt target for renewable power by 2022.”
The analysis shows that coal subsidies in India are often “linked to non-compliance with environmental norms,” the Times notes. “The largest subsidy identified in this group is the lack of penalties for non-compliance with coal washing requirements. Unwashed coal in power generation also results in reduced efficiency of power plants, requiring coal imports to improve the overall combustion characteristics.”
Thermal power plants were to meet new standards for sulphur dioxide, oxides of nitrogen, and particulate matter by the end of 2017, but that date has now been pushed to 2022. “Despite severe air pollution, their deadlines have been extended,” Garg said. “This is a subsidy because it helps thermal power plants save money on installing pollution control equipment.”
Another subsidy may be in the works for the 34 coal plants in India that are considered financially stressed, with government banks at work on a bailout plan, the Times states.