Old king coal lingers in a new EV soul

India’s commitments to climate mitigation are having a perverse outcome of increasing fossil fuel consumption, and advanced economies would do well to heed its call for greater collective effort. The country’s electric vehicle (EV) fleet will increasingly run on power generated from coal, over which New Delhi has avoided setting a schedule of cutbacks by widening the requirement multilaterally to all fossil fuels. Unless rich nations are ready to compensate for past climate damage and are willing to lower lifestyle-induced current energy consumption, a solution is unlikely to emerge. India needs capital, technology and capacity to generate more electricity from alternative fuels. What it does not need is weaponisation of oil and gas that forces it to fall back on the one fossil fuel it has in abundance: coal.

India is facing a conflict-driven decline of natural gas in its energy mix and has made quick-fix arrangements in a reordered global crude oil market. New Delhi has secured oil supplies from Moscow but the Western embargo on gas poses a bigger challenge. Traditional suppliers in the Persian Gulf are likely to redirect towards Europe, leaving some gas stranded in Russia. Gas prices are expected to remain volatile, lowering its appeal as a transition fuel in India. That strengthens the argument for coal, both domestic and imported.

Given its medium-term growth potential, the world economy benefits from India’s low energy intensity. That growth needs to be cushioned against elevated energy prices if global supply chains see India as an alternative to Chinese manufacturing. So far, New Delhi has been politely firm in its approach to energy security. It can afford to be more assertive about the need for collective climate responsibility, a big component of which involves India switching to clean fuel. The world should take greater interest in the country’s energy transition, which, if delayed, could raise mitigation costs overall.