A historic shift is underway in India’s energy landscape. Driven by an unprecedented expansion in clean energy generation, carbon dioxide emissions across the country’s power sector have remained completely flat, showing zero growth from the first half of 2024 to the same period in 2026. This marks a major milestone for the nation: it is the first time in more than fifty years that India has experienced no growth in coal-fired power over a consecutive two-year period, even as overall electricity demand continued to climb significantly.
The stabilization of power sector emissions is part of a broader macroeconomic and environmental trend. Across the country, consumption of both oil and gas has declined for two consecutive years, softening the blow of external market shocks and helping to alleviate vulnerabilities associated with the Hormuz crisis. Yet, despite these positive developments in electricity and petroleum, a comprehensive six-monthly analysis conducted for Carbon Brief reveals that India’s total greenhouse gas emissions still grew by 3.7% year-on-year in the first half of 2026. This overall increase was driven largely by rising output and emissions from heavy industries, particularly steel and cement.
Experts emphasize that sustaining India’s clean energy transition will require substantial infrastructure modernization. To keep pace with renewable expansion, the nation must upgrade its electricity transmission grid, rapidly deploy utility-scale energy storage, and significantly enhance the operational flexibility of its existing coal-fired power plants. Meanwhile, while renewable generation is absorbing most or all of the growth in power demand, traditional fossil-fuel industries continue to pursue large-scale capital investments. These include major commitments to new coal power capacity, ambitious government programs for coal-to-chemicals conversion, and efforts to boost domestic coking coal production to feed the expanding steel sector.
While the power sector’s carbon output remains flat and oil and gas consumption dwindle, the industrial sector’s heavy reliance on fossil fuels continues to push overall emissions upward. Compared to other major emerging economies within the G20, India lags significantly behind in the electrification of its industrial base. Accelerating industrial electrification would allow clean electricity to displace fossil fuels across manufacturing processes just as it has in power generation, opening a viable pathway for India to curb its total national emissions.
Flatlining Fossils
Last year, India’s carbon dioxide emissions from fossil fuels and cement grew at their slowest pace in two decades, a sharp deceleration propelled by rapid clean-energy deployment, flat oil demand, and growing heavy industry emissions. Data from the first half of 2026 shows a firm continuation of these trends. Most strikingly, the ongoing surge in renewable generation has kept power sector emissions stagnant for two consecutive years. Power sector emissions recorded in the first half of 2026 matched those of two years prior, effectively reversing a brief dip observed in 2025.
Beyond electricity generation, India’s primary emitting sectors exhibited divergent trajectories during the first half of 2026. While emissions from the power sector ticked up by 2.3% to reverse the previous year’s minor decline, demand for gas and petroleum products dropped for yet another year. Conversely, emissions growth from steel and cement production accelerated dramatically, surging by 8% year-on-year—a rate well above recent historical trends.
Clean-Energy Growth Matches Power Demand
The period stretching from the first half of 2024 to the first half of 2026 witnessed the largest increase in non-fossil power generation on record in India. This massive influx of renewable and clean power allowed fossil fuel consumption and carbon dioxide emissions in the sector to remain entirely flat despite rising electricity consumption.
Over this two-year window, India’s total electricity generation expanded by 7%, adding approximately 63 terawatt-hours (TWh)—an amount roughly equivalent to the total annual power consumption of countries like Switzerland or Singapore. This additional electricity demand was met entirely by non-fossil sources. Solar generation led the expansion by growing by 44TWh, supplemented by increases in wind generation at 13TWh, nuclear power at 7TWh, and hydropower at 8TWh. Together, clean energy sources added 70TWh over the two-year period, slightly surpassing the net increase in electricity demand.
Underpinning this generation growth was a massive buildout of infrastructure. Over the past two years, India added 77 gigawatts (GW) of new solar capacity, 11GW of wind, 5GW of hydro, and 0.6GW of nuclear capacity. While solar power continues to dominate the renewable landscape, alternative non-fossil sources collectively accounted for 40% of the overall increase in generation output.
A notable driver of electricity demand growth in 2026 has been the intensification of extreme weather linked to the El Niño phenomenon, which delayed the monsoon season, prolonged severe heatwaves, and triggered unprecedented demand for cooling and air conditioning. To manage this variable demand and support further renewable integration, India is aggressively accelerating investments in energy storage. The government’s National Electricity Plan projected a requirement of 82 gigawatt-hours (GWh) of storage capacity by 2026-27 and 411GWh by 2031-32. As of mid-2026, authorities have issued tenders for roughly 272GWh of storage capacity, encompassing 142GWh of pumped hydro and 133GWh of battery storage systems, building upon existing operational capacities.
State-Level Shifts in Clean Power
The reduction in fossil fuel-based power generation between the first of half of 2024 and the first half of 2026 was concentrated primarily in a handful of states. Gujarat emerged as the national leader, recording both the largest reduction in fossil generation and the most substantial expansion of clean energy infrastructure.
Following Gujarat, states such as Rajasthan and Tamil Nadu posted significant gains in renewable generation alongside corresponding drops in fossil-fuel power output. Other regions, including Madhya Pradesh, West Bengal, and Punjab, saw fossil fuel generation decline largely due to higher net imports rather than local renewable installations. Meanwhile, states like Karnataka and Andhra Pradesh successfully expanded clean power faster than local demand, helping to stabilize national fossil generation even as they exported excess power, which occasionally resulted in localized increases in fossil fuel generation to meet specific grid balancing needs. Maharashtra and Telangana, which experienced the country’s steepest jumps in electricity demand, managed to nearly match their consumption growth with corresponding increases in clean energy generation.
Continued Declines in Oil and Gas Consumption
India’s oil consumption continued on a downward trajectory during the first half of 2026, falling by 1.3% year-on-year—a slight acceleration compared to the 0.7% reduction recorded in the same period of the previous year. Although traditional transport fuels like diesel and petrol maintained positive growth, overall oil demand was dragged down by sharp declines in liquefied petroleum gas (LPG), petcoke utilized in cement manufacturing, and industrial chemical feedstocks, alongside a moderating growth rate for aviation fuel.
Diesel consumption growth accelerated from 1.8% to 4.1% in the first half of the year, bolstered by robust freight movement and heightened agricultural demand. The delayed monsoon forced farmers to rely more heavily on diesel-powered irrigation pumps. Petrol consumption returned to positive growth, climbing 6.9% year-on-year after flatlining in the first half of 2025, reflecting sustained expansion in passenger vehicle and two-wheeler ownership. This growth was partially tempered by India’s rapid rollout of ethanol blending, with the country achieving its 20% blending target five years ahead of schedule.
At the same time, electric vehicle adoption began exerting a measurable influence on transport fuel demand across multiple vehicle categories, particularly commercial fleets and two-wheelers in metropolitan centers like Delhi. Conversely, aviation fuel demand growth slowed sharply from 5% to 2% amid international airspace disruptions and elevated fuel prices linked to the Middle Eastern crisis. LPG consumption contracted by 7% due to supply chain disruptions originating in the Middle East, while petcoke consumption fell by 9.9% as rising prices prompted cement producers to switch back to coal.
Industrial feedstocks were similarly impacted by global market volatility. Naphtha demand plummeted as import prices surged, prompting petrochemical manufacturers to cut operating rates. Simultaneously, high fuel oil and diesel prices, combined with LPG shortages, forced some industrial consumers to temporarily revert to heavier, more polluting fuels like furnace oil and coal in boilers and heaters.
Rapid Emission Growth from Heavy Industry
Steel and cement production in India expanded by 8% and 9% respectively year-on-year in the first half of 2026, driven by robust activity in the real estate and infrastructure sectors. Despite this strong volume growth, profit margins for domestic manufacturers remained severely squeezed by elevated raw material costs, particularly imported coking coal, and inflated maritime freight expenses stemming from geopolitical trade disruptions.
Outside of power, steel, and cement, broader coal consumption surged by 14% in the first half of 2026. This spike was exacerbated by domestic LPG shortages that prompted temporary government authorizations allowing hospitality, ceramic, and general industrial sectors to utilize alternative solid fuels, including coal and biomass, to maintain operations.
Industry analysts point out that Indian industry remains heavily dependent on direct fossil fuel combustion, largely because its industrial sector has the second-lowest electrification rate within the G20. The relatively low share of electricity in industrial energy use indicates substantial untapped potential for electrification using established technologies, a transition that will be essential if India is to decouple industrial economic growth from rising carbon emissions.
New Investments in Coal
Even as clean energy deployment meets the vast majority of new electricity demand, significant capital investments continue across India’s coal supply chain. Approximately 43GW of new coal-fired power capacity was under construction as of June 2026. Policymakers view additional thermal capacity as necessary to guarantee grid reliability and meet surging peak evening and nighttime loads, even as battery storage and solar installations take on a larger share of daily generation.
Beyond electricity, India is pursuing ambitious industrial strategies centered on coal gasification to produce chemical feedstocks, fertilizers, and synthetic gas for manufacturing, aiming to secure long-term domestic energy independence. The government has targeted a capacity to process 100 million tonnes of coal annually through gasification over the coming years, despite the technology remaining in its early stages of commercial adoption domestically.
Simultaneously, the government has classified domestic coking coal as a critical and strategic mineral, encouraging steelmakers and mining firms to establish new washeries and expand domestic production. While these strategic investments are designed to insulate domestic manufacturing from external supply shocks, analysts warn that continued capital deployment into coal mining, gasification, and thermal infrastructure risks locking in fossil fuel dependence across heavy industry for decades to come.
Ultimately, India’s recent energy trajectory highlights a period of profound transition. Over the two-year span from mid-2024 to mid-2026, the country achieved its largest clean energy expansion on record, successfully capping power sector emissions and reducing vulnerable fossil fuel imports. However, overcoming the remaining hurdles—ranging from transmission constraints and renewable curtailment to low industrial electrification—will determine whether India can successfully transition its entire economy toward net-zero emissions while satisfying its massive developmental aspirations.
