A new analysis reveals that coal plants exempted from installing sulphur-reducing FGD systems are responsible for 81% of SO2 emissions near Delhi. This highlights a growing environmental risk as coal-based power generation is projected to rise, potentially worsening air quality and public health outcomes in the National Capital Region.
A recent analysis by the Centre for Research on Energy and Clean Air (CREA) has brought attention to the environmental impact of current emission regulations for coal-fired power plants. The report suggests that a significant majority of sulphur dioxide (SO2) emissions in the Delhi-National Capital Region (NCR) are being produced by facilities that are no longer mandated to install flue gas desulphurisation (FGD) systems.
Impact of Exemptions on Air Quality
Under a July 2025 notification from the Union government, many coal plants were reclassified, resulting in widespread exemptions from installing FGD technology. These systems are critical for reducing SO2 emissions, which are a major contributor to fine particulate matter (PM2.5) pollution. The study indicates that Category C plants, which are now exempt from these requirements, account for approximately 81 percent of the projected SO2 emissions from coal plants located within a 300-kilometer radius of Delhi.
In practical terms, the analysis of 12 power plants revealed a stark difference in emission profiles. For instance, facilities such as the Mahatma Gandhi Thermal Power Plant, which utilize FGD systems, reported minimal SO2 output. In contrast, the Rajpura Thermal Power Plant, which lacks these controls, was identified as a major emitter, with two of its units alone contributing an estimated 43,541 tonnes of SO2.
Rising Power Demand and Regulatory Hurdles
Concerns regarding these emissions are intensifying as the demand for electricity grows. With projections indicating a potential rise in coal-based power generation due to factors such as electricity demand and fluctuating hydropower output, the absence of stringent emission controls could lead to a further decline in regional air quality.
Historically, the government mandated FGD installations in 2015, with multiple extensions granted since then. The 2025 notification categorized plants based on their proximity to cities, specifically those within a 10-kilometer radius. However, environmental analysts argue that this focus is narrow, as SO2 can travel long distances to contribute to secondary particulate matter pollution. This categorization has effectively exempted about 78 percent of India's coal-fired power plants from a requirement originally intended to be universal.
Investor and Sector Monitorables
For stakeholders in the power sector, this regulatory environment remains a key factor to watch. While exemptions currently lower immediate capital spending requirements for many power generation companies, they introduce long-term risks related to shifting environmental policies and public health mandates. Investors may look for updates on whether the government considers reinstating mandatory FGD installations or providing more transparent access to real-time emission data. Future air quality trends in the Delhi-NCR region could also lead to renewed pressure on policymakers to tighten emission norms, potentially impacting the operational costs and capital allocation plans of power utilities.