India Eases Sulphur Emission Norms for Coal Power Plants, Reversing 2015 Mandate

In a significant policy shift, the Indian government has relaxed sulphur dioxide (SO₂) emission norms for coal-based power plants, effectively reversing a decade-old environmental mandate introduced in 2015.

The revised notification from the Ministry of Environment, Forest and Climate Change (MoEFCC) allows plants to comply with less stringent norms based on their location and prioritisation. The move is aimed at ensuring uninterrupted power supply and supporting economic growth, especially in regions dependent on coal-fired power generation.

Under the new rules, coal plants have been categorised into three groups: those in densely populated or ecologically sensitive areas, those within a 10 km radius of such zones, and all remaining plants. Only plants in the first category will now be required to install Flue Gas Desulphurisation (FGD) units by December 2027.

Others have either longer deadlines or are exempt from installing FGDs altogether. This revision replaces the uniform requirement issued in 2015, which mandated the installation of FGDs across all thermal power plants to curb sulphur emissions and reduce air pollution.

While the power sector has welcomed the decision as a relief that balances environmental concerns with energy security, environmental experts have expressed serious reservations. Critics argue that this rollback could worsen air quality, especially in regions already struggling with high pollution levels. India is the world’s third-largest emitter of greenhouse gases, and this dilution of emission standards raises concerns about its commitment to global climate goals.

Rolling back the FGD mandate reduces near-term coal-plant capex but pushes air-quality and community-health liability into a longer tail - one that insurers, lenders and downstream buyers are increasingly reading before they price. Our sustainability-due-diligence and impact-assessment teams help clients evaluate what softened environmental norms mean for stranded-asset exposure and TCFD-aligned narratives.