Analysis | Features

Policy U-Turn on Coal Pollution Puts Lives at Risk and FGD Firms in Crisis

Author: PPD Team Date: 15/07/2025

Industrial thermal power plant with five chimneys emitting dense smoke into the sky

 

Only 11 per cent of India’s coal-based thermal power units are now required to install flue gas desulphurisation systems. This change follows a recent notification from the Ministry of Environment, Forest and Climate Change, reported The Hindu.  

FGD systems help reduce sulphur dioxide from flue gas, a residue from coal combustion. Sulphur dioxide contributes to fine particulate matter in the air, which is linked to heart and lung disease. India first introduced sulphur dioxide emission norms in 2015 and gave plants two years to comply. Ten years later, most have still not installed the equipment.

Under the new policy, only plants located within 10 kilometres of the National Capital Region or cities with populations of at least one million must install FGDs. These are classified as Category A. Their deadline to comply has been pushed to December 30, 2027.

Plants in Category B are located within 10 kilometres of critically polluted areas or non-attainment cities. They may be required to install FGDs depending on the decision of the Expert Appraisal Committee. If approved, their deadline is December 30, 2028. These cities have poor air quality records and have not met national air standards for at least five years.

All other thermal power units fall under Category C. They have now been fully exempted from installing FGDs. This category includes 462 of the 600 units operating in India.

The decision reflects recommendations made in April by a committee under Principal Science Adviser Ajay Sood. However, it has drawn criticism from research groups who argue the decision is based on selective and misleading use of scientific data.

The Centre for Research on Energy and Clean Air released an analysis last month that challenges the studies cited by the government, according to The Hindu. It said institutions like NEERI, NIAS and IIT Delhi were being selectively quoted to support the policy shift. CREA noted that ambient sulphur dioxide readings, which are being used to justify the exemption, do not reflect actual emissions from power plant stacks or the full chemical impact of those emissions.

One of the NEERI studies being used by the government had itself stated that installing FGDs could lower ambient PM levels by up to 20 micrograms per cubic metre. An IIT Delhi study also found that FGD installation at the Vindhyachal power plant could reduce sulfate aerosols by 10 to 15 per cent up to 100 kilometres away and even further at some locations.

CREA said that basing policy on low ambient readings is scientifically flawed. Sulphur dioxide emission standards are designed around stack emissions. Ambient data does not account for wind direction, long-range pollutant transport or chemical reactions that form more harmful pollutants like PM2.5.

The report also flagged serious health risks. According to its estimates, emissions from coal-fired plants caused 47,000 premature deaths in 2014, 62,000 in 2017 and 78,000 in 2018. It warned that the health toll will likely worsen with India planning to add 80 to 100 gigawatts of new coal capacity.

Industry players are also facing uncertainty, as reported by CNBC. Thermax reported a Rs 467 crore FGD order book, but said in its earnings call that the segment is not seeing traction. Only Rs 350 crore is expected to be executed in FY26. Techno Electric had a Rs 1,450 crore FGD order backlog and was expecting Rs 500 crore in revenue from that vertical in FY26. That guidance is now in question.

Other companies such as BHEL, L&T Power, ISGEC, GE Power and Power Mech may also see orders dry up. Many had made large investments based on the earlier blanket mandate to install FGDs across all coal plants.

Opponents of the new rules say the justification based on added carbon emissions is weak. A NIAS study found that full FGD rollout would increase India’s total carbon emissions by less than one per cent. CREA noted that this is equivalent to the emissions of a single large coal plant. Yet there has been little debate about the much larger emissions from planned coal capacity additions.

NTPC data shows that FGDs were installed during scheduled maintenance in most cases. This counters claims that installation causes long shutdowns. NTPC has already equipped plants with a combined 20 gigawatts of capacity and is adding FGDs for another 47 gigawatts.

IIT Delhi and IIT Bombay studies confirm that thermal power plants are among the top contributors to PM2.5 pollution. In winter, they contribute up to 12 per cent of national PM2.5 levels. In some cases, they account for 16 per cent of cross-regional pollution. This level of impact is comparable to the transport sector, which has already shifted to BSVI fuel norms.

CREA concluded that the FGD rollout should not be restricted to selected zones. It argued that power plant emissions affect air quality on a national scale and called FGDs a critical public health tool. The group warned that delays would lead to more deaths, especially among vulnerable communities.

The featured photograph is for representation only.

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