COVID-19 Bonus :- CO2 Emissions Fall For First Time In 40 Years

Economic slowdown, growth of renewable energy and the impact of Covid-19 have led to first year-on-year reduction in India's carbon dioxide (CO2) emissions in four decades, said an analysis by the Centre for Research on Energy and Clean Air (CREA).

Analysis of official data across the 2019-20 fiscal year shows the fall has been steeper in March, due to measures to combat the pandemic. The emissions fell by an estimated 15 per cent during March and are likely to have fallen 30 per cent in April.

"Using the indicators for coal, oil and gas consumption, we estimate that CO2 emissions fell by 30m tonnes in the fiscal year ending March, in what is likely to have been the first annual decline in four decades," said the report.

An economic slowdown, renewable energy growth and the impact of Covid-19 have led to the first year-on-year reduction in India’s CO2 emissions in four decades. Emissions fell by around 1% in the fiscal year ending March 2020, as coal consumption fell and oil consumption flatlined.

The decline in emissions reflects the headwinds already affecting the Indian economy since early 2019, and increasing renewable energy generation. But our analysis of official Indian data across the nation’s entire 2019-20 fiscal year shows the fall has steepened in March, due to measures to combat the coronavirus pandemic. 

In the fiscal year ending March, coal sales by the main coal producer Coal India Ltd fell by 4.3%, while coal imports increased 3.2%, implying that total coal deliveries fell by 2% and signaling the first year-on-year fall in consumption in two decades.

The trend steepened in March, with coal sales falling 10% while coal imports fell 27.5% in March, meaning that total deliveries of coal to end users fell by 15%, in line with the reduction in power generation.

As a result of low demand due to the coronavirus outbreak and already slower demand growth earlier in the year, consumption during the fiscal grew at 0.2%, the slowest in at least 22 years. Natural gas consumption increased 5.5% in the first 11 months of the fiscal year, but is expected to fall by 15-20% during the lockdown.

Crude oil production in India decreased by 5.9% compared to last financial year and a 5.2% drop has been observed in natural gas production during the same time. Refinery production – in terms of crude oil processed also fell by 1.1% over the last financial year, compared to 2018-19.

Crude steel production dropped by 22.7% in March 2020 compared to the previous month and, cumulatively, the financial year 2019-20 saw a decline of 2.2% compared to last year, according to Ministry of Steel data.

Using the indicators above for coal, oil and gas consumption, we estimate that CO2 emissions fell by 30m tonnes of CO2 (MtCO2, 1.4%) in the fiscal year ending March, in what is likely to have been the first annual decline in four decades.

Annual emissions from fossil fuel use in India, millions of tonnes of CO2, 1965-2020. Figures for 2009 onwards correspond with financial years ending that March, with the 2020 number showing fiscal year 2019-20.