FGD Exemption Eases Cost For Coal Power Plants, Says CareEdge

Curious about how power gets cheaper?

India’s Environment Ministry just made a big move! On July 11, 2025, it revised sulphur dioxide norms for coal and lignite power plants. What’s the buzz? “Category C” plants—those located outside sensitive or polluted zones—no longer need to install costly Flue Gas Desulphurization (FGD) systems. These systems remove harmful SO₂ from emissions. According to CareEdge Ratings, this change could save ₹87,000 to ₹1.16 lakh crore in capital costs and cut your electricity bills by ₹0.17 to ₹0.22 per unit! That’s ₹19,000 to ₹24,000 crore in annual savings. 

FGD Exemption Data

Coal Power Gets Financial Breather

Thermal power continues to dominate India’s power mix, delivering 75% of total generation despite being just 47% of capacity. Plant Load Factor (PLF) remains high, making coal crucial. CareEdge anticipates coal will still provide nearly 60% of electricity by 2029–30, with consumption hitting 1,233 billion units. Recognising coal’s central role, the government permits Category A plants (cities with 1 million+ people) to comply by December 2027. Category B plants (critically polluted/non-attainment areas) get case-by-case deadlines. Category C plants—about 80% of capacity—won’t need FGDs but must follow alternative pollution norms. The revised structure aims for balance: lower cost versus emissions control.

Wider Impacts & Environmental Concerns

• Tariff Relief, But at What Cost?: While the eased FGD norms lower power tariffs and capital costs, environmentalists warn of long-term public health costs.
• Reversal of Clean-Air Progress: According to Reuters, this move reverses India’s 2015 mandate for stricter emissions control across coal plants.
• Pollution Doesn’t Respect Boundaries: Critics argue that sulphur pollutants travel beyond zones, risking respiratory issues and acid rain across regions.
• SO₂’s Link to PM2.5: Independent studies estimate sulphur dioxide contributes 12–30% of India’s fine particulate matter (PM2.5) levels.
• CSE Raises Red Flags: The Centre for Science and Environment (CSE) calls the exemption a setback to India’s air pollution reduction commitments.
• Ministry’s Justification: The Ministry of Environment claims most Indian coal is low in sulphur, and insists stack emission limits and monitoring will ensure safety.

(With Inputs From ANI)

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