CSE says environment ministry’s latest amendment gives coal-based thermal power stations complete license to pollute

• On April 1, 2021, Union environment ministry extends the deadlines for compliance with stringent emission norms – applies to the majority of coal-based power plants in India, which are now allowed to comply with the emission norms by another three to four years
• Giving further extensions to laggards that have not made adequate progress till date is unacceptable, says CSE
• The amended notification favours operation of old inefficient coal power stations, which can continue to run on paying a penalty – this can compromise India’s climate change goals
• What is worse is that the deterrence – penalty charged to companies for not complying with the emission norms in the extended deadline – is in fact a license to pollute. 

See CSE’s factsheet and briefing paper on the subject Click here 

New Delhi, April 7, 2021: Centre for Science and Environment (CSE) has strongly criticised the Union Ministry of Environment, Forest and Climate Change’s (MoEF&CC) latest amendment to 2015 notification on stringent emission norms for India’s coal-based thermal power sector – the new amendment, says CSE, “will give these already polluting thermal power plants (TPPs) a license to pollute indefinitely”. 

Norms to limit pollutants from TPPs were announced in 2015, and were expected to be adopted by 2017. But the industry managed to delay implementation to 2022. It is 2021 now: with just a few months to go before the deadline, a mere one-third of the plants have taken any serious steps to comply with the norms. 

Says Sunita Narain, director general, CSE: “Instead of working to ensure implementation, the ministry has chosen to extend the deadline further, allowing a majority of the plants to pollute for another three to four years. However, extension is not the only matter to be worried about. What makes this a fatally flawed notification is that the deterrence provided in it for non-compliance actually gives the polluters a license to pollute.” 

The amendment

TPPs are put in three categories – Category A includes TPPs in a 10-km radius of NCR or cities having a million-plus population as per the 2011 census; Category B includes TPPs in a 10-km radius of critically polluted areas and non-attainment cities; and the rest of the TPPs are in Category C. TPPs in Category A have to meet the deadline by 2022, those in Category B by 2023, and in Category C by 2024. 

Old power stations are exempted from installing pollution control systems by submitting an undertaking to retire. Ideally, old plants in Category A are asked to retire by 2022 and the rest by 2025. Defaulting the deadlines attracts penalty. 

But what makes the notification so flawed is the fact that it provides a penalty amount, which is much lower than what it would cost to install the pollution control equipment. CSE’s analysis shows that while installing the equipment for pollution control would cost between Rs 40-100 lakh/MW, the penalty that thermal power plants would have to pay to keep running without installing this equipment is roughly Rs 5-11 lakh/MW – this makes a complete mockery of the effort to control pollution. 

“The new notification undermines all efforts to ‘clean’ up dirty coal power plants. It is clear that thermal power sector is a major contributor to India’s pollution challenge – from air to water – and this notification nullifies all the work that was being done to improve performance of the sector,” says Nivit Kumar Yadav, programme director, Industrial Pollution Unit, CSE. 

CSE’s detailed analysis of the amendment reveals:

1. The new categorisation supports extension of deadlines for most plants: 28 per cent of the total capacity (58 GW) is under Category A; another 28 per cent (58 GW) falls under Category B; the major part of the capacity -- 44 per cent (89.5 GW) --comprising 82 plants falls in Category C. This way, over 72 per cent of the total capacity that earlier had to meet the norms by 2022, has now been provided extension by two-three years.
2. Defaulters allowed to pollute more: 75 per cent of the capacity of Category C that have been given a relaxation in timelines, are state GENCOS and private companies. These TPPs have made inadequate progress to comply with the norms, but they would reap the benefits of the extension.
3. Six TPPs that were adding to Delhi’s air pollution issues are likely to be given a much extended 2024/2025 deadline based on the new categorisation. A majority of these plants are in Punjab. Earlier, they had to comply with the 2019 deadline.
4. Old inefficient polluting plants can submit a retirement plan, and would be allowed to operate till 2025. On defaulting, such a plant can still continue to operate in perpetuity without meeting the norms merely by paying a penalty of 20 paisa a unit.
5. Compensation is designed to favour the polluters: TPPs enjoying a three-year extension (Category C) are liable to pay the least compensation 5-10 paise a unit starting 2025, those with two year extension (Category B) have to pay 7-15 paise a unit starting 2024, and those stations that has to meet the norms by next year have to pay the highest penalty of 10-20 paise a unit starting 2023 on default.
6. Lower penalty for lower loads: Since the penalty is generation based, the fine for a smaller capacity plant operating at a lesser load reduces considerably. Lower load running means more pollution and inefficiency. For instance, a 250 MW plant in Category C operating at 40 per cent plant load factor has to pay only Rs 8 crores from 2026. And most stations might chose this option given the excess capacity scenario today.
7. Insufficient penalty is a license to pollute: The maximum penalty imposed on non-compliant units after this relaxed deadline is just 20 paise per unit of electricity. But the levelized cost of retrofit of pollution control equipment to meet the new norms for these plants are estimated between 30 and 70 paise a unit. In terms of per MW, a 500 MW unit receiving Rs 60 lakhs/MW fixed charges is liable to pay only Rs 5-11 lakhs/MW on default, whereas to retrofit pollution control technology to meet the norms it might have to invest Rs 40-100 lakhs/MW. Fixed cost is the charges paid to a power station even when it is not in operation on showing technical availability to generate electricity on need.  

The deadline for 2022 for coal-based thermal power plants to meet the new standard was fixed by the Supreme Court. taking into account the limitations of thermal power plants and also their environmental and health impacts. The notification has not just extended the Supreme Court mandated deadlines, but has completed undermined the effort to clean up this sector and to secure the right to clean air. Coal TPPs are responsible for over 60 per cent of total industrial emissions of particulate matter; 45 per cent of SO₂; 30 per cent of NO_x; and more than 80 per cent of mercury emissions in the country.  

CSE has put forth the concept of First-Run or preferential scheduling (see details Click here:  that could serve as an incentive for stations which are moving to meet the new norms. 

For more on this, contact Sukanya Nair of The CSE Media Resource Centre, sukanya.nair@cseindia.org, 8816818864