India is projected to reach new annual coal emissions highs in 2023 due to increased carbon dioxide discharges from the power sector during the first half of the year. This rise has been driven by a surge in imports of low-quality and highly polluting coal from global markets.

Ember, a think tank, has provided data indicating that Indian power producers released over 500 million tonnes of CO2 from coal combustion during the first half of 2023. This marks a 4% increase compared to the same period in 2022, which had already set a new record for coal power emissions on an annual basis.

The power utilities in India utilize a combination of domestically available low-grade coal and imported coal to supply their power plants. These imports offer insights into the potential emissions from major coastal power plants, some of the largest in the country. During the first half of 2023, roughly 80% of India's thermal coal imports originated from Indonesia, South Africa, and Russia, countries known for exporting lower-quality thermal coal that emits CO2 and sulfur dioxide when burned in power stations. Around 7% of thermal imports came from Australia, known for supplying cleaner-burning coal.

However, Australia's coal supplies are likely to dwindle due to improved relations with China, the world's leading coal importer. This reduction in Australian coal availability could lead to higher Australian coal prices compared to competing grades, influencing buyers to opt for cheaper and lower-quality coal sources.

Indonesia has historically been India's primary supplier of energy coal, accounting for an average of 60% of the country's total thermal coal imports from 2017 to 2020. However, India's coal import mix has been adjusted in response to market prices, grade availability, and changing demands from utilities.

Despite attempts to curb pollution in 2021, India increased imports of Australian thermal coal, as China's ban on Australian coal prompted a shift in import sources. In 2022, import patterns reverted to historical norms due to surging global coal prices driven by geopolitical factors. This led to coastal coal plants scaling back imports and power generation.

The coal-fired power output in India rose to a record 632 terawatt hours in the first half of the year, up 3.8% from the same period in 2022, contributing to an increase in national coal-fired emissions. Emissions from coal-powered plants in coastal states like Tamil Nadu and Odisha, largely dependent on imports, have risen by more than twice the national average.

As Australia's cleaner coal supplies tighten, Indian buyers are expected to turn to lower-priced coal sources like Indonesia and Russia, leading to increased emissions and further air quality deterioration across South Asia.