MoEFCC’s new FGD norms: Balance between environment and growth
This article is authored by Shishir Priyadarshi, president, Chintan Research Foundation and former director of economic development, WTO.
In a significant move, the ministry of environment, forest, and climate change (MoEFCC) has amended the compliance framework for sulphur dioxide (SO₂) emission norms under the Environment (Protection) Rules via its Gazette Notification dated July 11 2025. By exempting Category C thermal power plants—those located in remote and non-critical air zones—from the mandatory installation of Flue Gas Desulfurisation (FGD) systems, the Government of India has reaffirmed its commitment to a balanced model of sustainable development: One that is pragmatic, economically sound, and environmentally conscious.
This decision, predictably, has drawn criticism from some environmental groups, who argue that relaxing FGD norms risks undermining air quality goals. But such a view, while rooted in good intentions, fails to take into account both scientific evidence and the economic imperatives of a fast-growing nation.
Let us first consider the science. Most Indian thermal power plants run on low-sulphur domestic coal, which produces relatively low levels of SO₂. Studies conducted by experts have found only marginal differences in SO₂ emissions between plants with FGDs and those without in these specific contexts. In fact, installing FGDs on such plants could lead to increased CO₂ emissions—a perverse outcome that may actually worsen global warming rather than mitigate it.
Second, the economic calculus is inarguable. The imposition of FGD systems across the board adds about 30 paise per kilowatt-hour (kWh) to the cost of electricity, leading to an additional burden of nearly ₹40,000 crores annually. At a time when India is rapidly scaling up its industrial base, investing in rural electrification, and building digital infrastructure, this additional cost would have been passed on to the consumer—raising tariffs, dampening demand, and slowing our progress toward a Viksit Bharat.
By contrast, the MoEFCC’s calibrated exemption preserves environmental safeguards in sensitive areas (Categories A and B), while removing unnecessary compliance burdens on plants in non-critical zones. This ensures affordable electricity for households, small businesses, and industries—precisely the kind of broad-based empowerment that underpins the Prime Minister (PM)’s vision of a developed India by 2047.
Furthermore, the avoided CAPEX from FGD installations frees up resources for more impactful green investments such as renewable energy integration, battery storage systems, and modernisation of grid infrastructure. Lower auxiliary power consumption, water savings, reduced land requirements, and the minimisation of limestone handling and gypsum disposal are added operational benefits that strengthen the case for this move.
Equally commendable is the consultative and evidence-driven approach that seems to have been adopted by the government and the Central Pollution Control Board. This decision is not a roll-back of environmental protections, but a refinement—prioritising high-impact actions over symbolic compliance. It sends a clear message that India’s regulatory framework is capable of nuance, sophistication, and responsiveness to ground realities.
Environmental protection and economic development are not zero-sum goals. The path to net-zero emissions by 2070 will not be built through rigid checklists but through intelligent, adaptive policy design—exactly what this decision exemplifies.
Hopefully, the judiciary too, which has long played a constructive role in balancing environmental and developmental goals, will appreciate the careful logic behind this notification. The courts have time and again recognised the need to align environmental standards with the socio-economic needs of the nation.
India stands at the cusp of a transformative energy decade. By making electricity more affordable, power projects more viable, and compliance more meaningful, this move strengthens the foundation on which the edifice of a Viksit Bharat can be built.
This decision is not a retreat from environmental responsibility, but a reaffirmation of it—on terms that make sense for an India that is moving at a rapid pace towards the PM's vision of Viksit Bharat.
This article is authored by Shishir Priyadarshi, president, Chintan Research Foundation and former director of economic development, WTO.
In a significant move, the ministry of environment, forest, and climate change (MoEFCC) has amended the compliance framework for sulphur dioxide (SO₂) emission norms under the Environment (Protection) Rules via its Gazette Notification dated July 11 2025. By exempting Category C thermal power plants—those located in remote and non-critical air zones—from the mandatory installation of Flue Gas Desulfurisation (FGD) systems, the Government of India has reaffirmed its commitment to a balanced model of sustainable development: One that is pragmatic, economically sound, and environmentally conscious.
This decision, predictably, has drawn criticism from some environmental groups, who argue that relaxing FGD norms risks undermining air quality goals. But such a view, while rooted in good intentions, fails to take into account both scientific evidence and the economic imperatives of a fast-growing nation.
Let us first consider the science. Most Indian thermal power plants run on low-sulphur domestic coal, which produces relatively low levels of SO₂. Studies conducted by experts have found only marginal differences in SO₂ emissions between plants with FGDs and those without in these specific contexts. In fact, installing FGDs on such plants could lead to increased CO₂ emissions—a perverse outcome that may actually worsen global warming rather than mitigate it.
Second, the economic calculus is inarguable. The imposition of FGD systems across the board adds about 30 paise per kilowatt-hour (kWh) to the cost of electricity, leading to an additional burden of nearly ₹40,000 crores annually. At a time when India is rapidly scaling up its industrial base, investing in rural electrification, and building digital infrastructure, this additional cost would have been passed on to the consumer—raising tariffs, dampening demand, and slowing our progress toward a Viksit Bharat.
By contrast, the MoEFCC’s calibrated exemption preserves environmental safeguards in sensitive areas (Categories A and B), while removing unnecessary compliance burdens on plants in non-critical zones. This ensures affordable electricity for households, small businesses, and industries—precisely the kind of broad-based empowerment that underpins the Prime Minister (PM)’s vision of a developed India by 2047.
{{/usCountry}}By contrast, the MoEFCC’s calibrated exemption preserves environmental safeguards in sensitive areas (Categories A and B), while removing unnecessary compliance burdens on plants in non-critical zones. This ensures affordable electricity for households, small businesses, and industries—precisely the kind of broad-based empowerment that underpins the Prime Minister (PM)’s vision of a developed India by 2047.
{{/usCountry}}Furthermore, the avoided CAPEX from FGD installations frees up resources for more impactful green investments such as renewable energy integration, battery storage systems, and modernisation of grid infrastructure. Lower auxiliary power consumption, water savings, reduced land requirements, and the minimisation of limestone handling and gypsum disposal are added operational benefits that strengthen the case for this move.
Equally commendable is the consultative and evidence-driven approach that seems to have been adopted by the government and the Central Pollution Control Board. This decision is not a roll-back of environmental protections, but a refinement—prioritising high-impact actions over symbolic compliance. It sends a clear message that India’s regulatory framework is capable of nuance, sophistication, and responsiveness to ground realities.
Environmental protection and economic development are not zero-sum goals. The path to net-zero emissions by 2070 will not be built through rigid checklists but through intelligent, adaptive policy design—exactly what this decision exemplifies.
Hopefully, the judiciary too, which has long played a constructive role in balancing environmental and developmental goals, will appreciate the careful logic behind this notification. The courts have time and again recognised the need to align environmental standards with the socio-economic needs of the nation.
India stands at the cusp of a transformative energy decade. By making electricity more affordable, power projects more viable, and compliance more meaningful, this move strengthens the foundation on which the edifice of a Viksit Bharat can be built.
This decision is not a retreat from environmental responsibility, but a reaffirmation of it—on terms that make sense for an India that is moving at a rapid pace towards the PM's vision of Viksit Bharat.
This article is authored by Shishir Priyadarshi, president, Chintan Research Foundation and former director of economic development, WTO.
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