A Smarter, Cheaper Path To Clean Air & Affordable Power
The Government’s recent decision to ease the blanket requirement for flue gas desulphurisation (FGD) systems across its coal-fired power fleet is not a retreat from environmental responsibility. On the contrary, it represents a mature, data-driven course correction — one that balances science, fiscal prudence and the realities of a still-developing economy.
The days of importing regulation from abroad, without context or calibration, must end. This decision is proof that India has begun creating laws and norms that suit Indian requirements and conditions.
FGD systems remove sulphur dioxide (SO₂) from the exhaust of coal-fired power plants. In regions that use high-sulphur coal or face heavy industrial pollution, FGDs are essential. But in India — where domestic coal is inherently low in sulphur and ambient SO₂ levels across most cities remain well within permissible limits — a universal mandate was always difficult to justify. The evidence now confirms that suspicion.
Three independent studies by IIT Delhi, CSIR-NEERI and the National Institute of Advanced Studies have found that ambient SO₂ concentrations are between 3 and 20 µg/m³ — far below the 80 µg/m³ threshold. They also show no significant difference between SO₂ levels near FGD-equipped plants and those without. The environmental benefit, in short, is marginal.
The economic and climate costs, however, are not. Retrofitting FGDs would require Rs 2.5 lakh crore in investment and lead to 45-day shutdowns per boiler. Worse, the added auxiliary power, limestone usage and mining logistics would generate 69 million tonnes of additional CO₂ emissions — a climate penalty that defeats the purpose of the exercise.
But perhaps the most important and immediate impact will be felt on electricity prices. A blanket FGD mandate would have raised generation costs by 25 to 30 paise per unit. In an economy where millions of homes and small businesses live on the margin of affordability, that is a steep and unnecessary price to pay — especially when alternatives exist.
Moreover, given the current cros subsity norms that are in place, this would mean a much higher cost for industry and business which would render them even more uncompetitive in the global market. It would also stoke inflation, because all high costs must eventually be borne by customers.
The government’s revised approach keeps FGDs mandatory for plants near large urban centres or critically polluted regions but exempts those in low-risk zones. This is regulation by risk, not ritual. It is how good policy should be made.
In fact, it is important to note that India needs to remain committed to therman production of power for several reasons.
First, India is resource-starved, more specifically capital starved. Replacing coal plants would pose a monumental cost, thus taking away precious funds from even more critical aeas of economic reform.
Second, India has abundant coal, and must therefore conserve its forex outgo by using the coal it has, and sticking to imports wherever required.
Third, India is investing heavily in solar and other renewables. But that comes with a disadvantage. At times of surplus power, either because deman falls, or because solar power production is high on account of good sunlight, we have surplus power generation. At that time, thermal plants can be shut, not solar (it is impossible to shut solar plants). That is another reason why merchant energy sale must be allowed by shutting down thermal plants to stabilise the grid and national costs.
That is why, regulators need to bear in mind that when ground realities change, the governing policies too must change. India is not backing away from its environmental commitments. It is simply making them smarter.
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