Energy Sector

India’s Rising LPG Consumption: Drivers, Trends and Policy Implications

Context: India’s Liquefied Petroleum Gas (LPG) consumption has surged to 31.3 million metric tonnes (MMT) in FY25, driven by expanded household access under the Pradhan Mantri Ujjwala Yojana (PMUY) and growing commercial and industrial demand. With usage expected to reach 33–34 MMT in FY26, LPG continues to dominate India’s clean cooking energy transition.

About LPG

LPG is a compressed mixture of propane and butane (≈40:60) used for:

  • Cooking (household sector)
  • Industrial applications
  • Food services and transport

It burns cleaner than biomass, kerosene, and coal, significantly reducing indoor air pollution.

Trends in India’s LPG Sector

1. Strong Growth in National Consumption

  • FY17: 21.6 MMT
  • FY25: 31.3 MMT
  • FY26 (projected): 33–34 MMT

This represents one of the fastest-growing clean fuel transitions globally.

2. PMUY’s Transformational Impact

Under PMUY, household LPG coverage expanded across rural and low-income homes.

  • Average refill consumption increased from 3.9 cylinders/year to 4.5 cylinders/year.
  • Improved affordability, last-mile delivery expansion and behavioural shift strengthened LPG dependence.

The scheme dramatically reduced household smoke exposure and supported women’s health and safety.

3. Rising Commercial and Industrial Use

Commercial and industrial consumers increased their share of total LPG demand:

  • Earlier: ~10%
  • FY25: ~16%

Growth is driven by:

  • Food service chains
  • Institutional kitchens
  • MSME clusters shifting away from solid fuels

4. Persistent Supply Gap and Import Dependence

Domestic LPG production increased modestly:

  • FY17: 11.2 MMT
  • FY25: 12.8 MMT

But imports rose sharply to ~20.7 MMT, keeping dependence at 55–60%.
India is currently the world’s second-largest LPG importer after China.

5. Import Diversification for Energy Security

  • Middle East supplies dominate India’s imports (91–93%).
  • The new India–US LPG agreement (2.2 MTPA) diversifies sourcing, reduces geopolitical exposure, and strengthens long-term energy security.

About Pradhan Mantri Ujjwala Yojana (PMUY)

A flagship central sector scheme by the Ministry of Petroleum & Natural Gas, launched in 2016, providing deposit-free LPG connections to women in low-income households.

Eligibility Groups

  • BPL households
  • SC/ST families
  • Antyodaya beneficiaries
  • Forest dwellers
  • SECC-listed households
  • Migrants
  • Women in island territories

Note: Households without an adult woman are ineligible.

Achievements

  • 10.33 crore LPG connections provided
  • 238+ crore refills in 9 years
    PMUY has significantly enhanced women’s health, reduced drudgery, and accelerated India’s adoption of clean cooking fuels.

Conclusion

India’s rising LPG consumption reflects both social welfare gains from PMUY and economic expansion.

However, persistent import dependence underscores the need for domestic production enhancement, diversification of suppliers, and a long-term transition toward cleaner alternatives like bio-LPG, ethanol-based fuels, and green hydrogen derivatives.

India’s First-Ever LPG Import Deal with the United States

Context: For the first time, India has signed a structured, year-long agreement to import 2.2 million tonnes (MMT) of Liquefied Petroleum Gas (LPG) from the United States, starting in 2026. Indian public sector refiners, including IOC, BPCL, and HPCL, finalised the contract, marking a major diversification in India’s energy supply chain.

image 21

Significance of the Deal

1. First Formal LPG Agreement

This is the first structured contract between India and the US for LPG supply, forming nearly 10% of India’s annual LPG imports.

2. Shift in Price Benchmarking

  • The pricing will use the Mont Belvieu benchmark instead of the traditional Saudi Aramco Contract Price (CP).
  • Mont Belvieu (Texas) is the world’s largest LPG storage and pricing hub, where daily spot prices reflect North American market dynamics.
  • This shift reduces India’s dependence on Middle Eastern pricing mechanisms and allows greater price transparency.

3. Strategic Value

  • Enhances energy security by diversifying supply sources beyond West Asia.
  • Strengthens the India–US strategic partnership, complementing cooperation on critical minerals, LNG, technology, and defence.
  • Provides a hedge against geopolitical disruptions in the Gulf region.

India’s LPG Landscape

1. Global Ranking

India is the second-largest LPG consumer worldwide (32 MMT annual demand), after China.

2. Sectoral Consumption

  • Domestic kitchens: ~90% of demand
  • Commercial & Industrial: Hotels, eateries, industries
  • Automotive: Auto-LPG vehicles

3. Import Dependence

India imports 60%+ of its LPG needs, mainly from:

  • UAE
  • Saudi Arabia
  • Qatar
  • Kuwait

The US deal reduces over-reliance on West Asia.

4. PMUY – Social Impact

The Pradhan Mantri Ujjwala Yojana (PMUY) provides deposit-free LPG connections to low-income women and targeted subsidies for up to 9 refills annually, making LPG a central pillar of India’s clean energy transition.

About Liquefied Petroleum Gas (LPG)

  • Composition: Primarily propane (C₃H₈) and butane (C₄H₁₀).
  • State of Matter:
    • Gas at normal temperature & pressure.
    • Converts to liquid under moderate pressure or cooling → enabling efficient storage & transport.
  • Volume Ratio: Liquid LPG occupies 1/250th of its gaseous volume.
  • Safety: Naturally odourless; ethyl mercaptan is added for leak detection.
  • Risk: LPG vapour is heavier than air and collects at low points, increasing explosion risk.
  • Global Producers:
    • Largest Producer: United States
    • Other major producers: Saudi Arabia, China
    • Top Exporters: United States & Qatar

Conclusion

India’s first-ever LPG deal with the US marks a major milestone in its energy diplomacy. By shifting to the Mont Belvieu benchmark and reducing dependence on West Asian suppliers, India strengthens its energy security, supply resilience, and geopolitical leverage, while deepening its strategic partnership with the United States.

Blending Isobutanol with Diesel

Context: The Automotive Research Association of India (ARAI) was exploring the possibility of blending isobutanol with diesel. The move comes after the efforts to blend ethanol with diesel were unsuccessful. 

Relevance of the Topic: Prelims: Isobutanol and its feasibility to blend with Diesel: Pros & Cons. 

Biofuel blending in Petrol and Diesel is an important contributor to the government’s objective of scaling the net zero emission target by 2070. 

Isobutanol and its feasibility to blend with Diesel

  • Isobutanol is a higher molecular weight alcohol with inflammable properties. It is used as a solvent in several industries, including painting. 
  • It is produced from either thermochemical pathways (such as synthesis gas to mixed alcohols) or biochemical pathways (such as fermentation by specially designed microbes under sterile conditions). 

Isobutanol Blending vs Ethanol Blending with Diesel

Studies suggest: 

  • Isobutanol has higher energy content as compared to ethanol and is more amenable to pipeline distribution.
  • Isobutanol blends better with diesel compared to ethanol. There is no need to add any complement for efficiency. 
  • Less water absorption (less hygroscopic) compared to ethanol, thus it has lower corrosion risks. 
  • The flash point or the lowest temperature at which isobutanol yields a vapour igniting a momentary flash is higher than ethanol.
    • A lower flash point was among the reasons that ethanol was not considered ideal for blending with diesel. Fuels with lower flash points are more volatile and entail a higher risk of catching fire. 
  • Proposed blending opens avenues for the surplus ethanol production sources to be diverted to produce isobutanol. Isobutanol can be produced from the same feedstock required to produce ethanol such as sugarcane syrup and molasses and grains etc. 

The proposed blend would have an impact on reducing emissions and help with import substitution. 

Associated Concerns: 

  • Isobutanol and diesel may have issues on miscibility (ability of two substances to mix to form a homogenous mixture) though it can be sorted out by mixing biodiesel to the blend. Biodiesel is the fuel manufactured from non-edible vegetable oils, used cooking oil and/or animal fat. 
  • Isobutanol has significantly lower cetane number (measure of combustion quality) as compared to diesel (the base fuel). This would reduce the blend’s overall cetane number. This raises concerns about diesel knock which can result in reduced power and potential damage to engines.
    • An ideal combustion translates to rapid ignition and the fuel combusting completely to produce the necessary energy.
    • ‘Knocking’ occurs when the fuel burns unevenly and/or prematurely in the vehicle’s fuel cylinder. However, cetane value can be restored through proper additives which would entail incremental costs.

The blending paradigm is still being studied and the pilot project would take about 18 months to complete. If successful, India would be the first country to have blended isobutanol with diesel. 

Also Read: What are Biofuels? 

Proper studies should be initiated encompassing varied vehicle classes and types. Phased blending targets with no more than 10% blending of isobutanol should be considered.  

Mines and Minerals (Development and Regulation) Amendment Bill 2025

Context: Lok Sabha and Rajya Sabha have recently passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2025. The Bill seeks to amend the Mines and Minerals (Development and Regulation) Act, 1957.  

Relevance of the Topic: Prelims: Key Features of Mines and Minerals (Development and Regulation) Amendment Bill 2025; Critical Minerals and National Critical Mineral Mission.

Mines and Minerals (Development and Regulation) Amendment Bill 2025

The Mines and Minerals (Development and Regulation) Amendment Bill, 2025 seeks to boost the supply of critical and deep-seated minerals, and relax the regime for mineral conservation, zero waste management and extraction of strategic minerals.

Key Features of the Bill:  

Inclusion of other minerals in a Mining Lease :  

Under the Mines and Minerals (Development and Regulation) Act 1957, a mining lease is granted for a specific mineral.

  • The Bill provides that lease holders may apply to the state government for adding other minerals to an existing lease.
    • For inclusion of other minerals, the lease holder must pay an amount equivalent to the royalty for that mineral. 
    • For inclusion of critical and strategic minerals and other specified minerals no additional amount needs to be paid. These include minerals such as lithium, graphite, nickel, cobalt, gold, and silver.
  • In case of auctioned mines, the lease holder must additionally pay the auction premium for the included mineral. The central government may change payment requirements through a notification.
  • An atomic mineral above a specified grade cannot be included in a mining lease granted for non-atomic minerals.

Expanded scope of National Mineral Exploration Trust:  

The 1957 Act established the National Mineral Exploration Trust to fund mineral exploration in the country.

  • The Bill widens the scope of the Trust to fund development of mines and minerals. 
  • It allows the usage of funds in the Trust for exploration and development in offshore areas and outside India. 
  • The Bill renames the Trust as the National Mineral Exploration and Development Trust. 
  • Under the 1957 Act, all lessees are required to pay 2% of royalty into the Trust. The Bill increases the rate of contribution to 3% of the royalty.

Removal of limit on sale for Captive Mines: 

  • Under the 1957 Act, captive mines are allowed to sell up to 50% of minerals produced in a year, after meeting end-use requirements. The Bill removes the limit on sale of minerals. 
  • The Bill also empowers state governments to allow sale of mineral dumps stacked in the leased area up to a date specified by the central government.

Inclusion of contiguous area in mining lease for Deep-seated Minerals : 

  • The Bill allows for a one-time extension of the area under a mining or composite lease. This will be applicable for deep-seated minerals. Deep-seated minerals are minerals which occur at a depth of more than 200 metres from the surface of land. 
  • Mining area may be extended by up to 30% of the existing leased area under a composite licence, and by up to 10% of the existing leased area under a mining lease. A composite licence provides rights for both prospecting and mining.

Mineral Exchanges:

  • The Bill provides for establishing an authority to register and regulate mineral exchanges. 
  • The Bill defines mineral exchange as a registered electronic trading platform or marketplace for trading minerals and metals. 
  • The central government will frame Rules regarding mineral exchanges.

Significance of the Bill: 

  • Boosts domestic exploration and production of critical minerals.
  • Positions India as a major player in global mineral supply chains reducing dependence on China.
  • Encourages private-sector participation via royalty waivers and easier lease amendments.
  • Strengthens energy transition goals (solar, wind, EVs, batteries).
  • Institutionalises mineral trading platforms, improving transparency and investor confidence.

Critical Minerals

  • Natural resources that are essential for economic development, clean energy transition, and national security, but are vulnerable to supply disruptions due to:
    • Limited availability
    • Concentration of supply in a few countries
    • Geopolitical risks 

Examples of Critical Minerals: 

  • Energy Transition Minerals: Lithium, Cobalt, Nickel, Graphite (for batteries & EVs).
  • Technology Minerals: Gallium, Germanium, Rare Earth Elements (for semiconductors, electronics, space).
  • Defence & Aerospace Minerals: Beryllium, Titanium, Tungsten.
  • Others: Copper, Manganese, Molybdenum, Chromium.

Supply of Critical Minerals is highly concentrated: 

  • China: Dominates processing of rare earths, graphite, gallium, germanium.
  • Democratic Republic of Congo: Supplies over 70% of global cobalt.
  • Australia & Chile: Major producers of lithium.

India sets eyes on 10% of global Green Hydrogen demand

Context: India aims to capture 10% of the global green hydrogen demand by 2030, with significant progress made through the National Green Hydrogen Mission. The global green hydrogen demand is expected to exceed 100 million metric tonnes (MMT) by 2030. 

Relevance of the topic:

Prelims: Types of Hydrogen, National Hydrogen Mission

Mains: Benefits and Challenges in production of Green Hydrogen as a fuel. 

Hydrogen as an Alternative Fuel

  • Hydrogen is the lightest and the most abundant element in the universe. On Earth, it is found in compounds like water or hydrocarbons. However, Hydrogen is not present in the free state. Therefore, it must be created and stored before it tends to be utilised.
  • Hydrogen Fuel: Hydrogen fuel is produced by splitting water (H₂O) into its components: hydrogen (H₂) and oxygen (O₂). The hydrogen gas can be used to power fuel cells, which generate electricity through a chemical reaction between hydrogen and oxygen, releasing only water vapour as a byproduct. 
image 20

Green Hydrogen: 

  • Green hydrogen is hydrogen produced using electricity from clean energy sources, such as wind and solar energy, which do not release greenhouse gases when generating electricity. 
  • Green hydrogen is made when water (H2O) is split into hydrogen (H2) and oxygen (O2) via a process known as electrolysis.

Other Types of Hydrogen:

Depending on the type of production used, different colour names are assigned to the hydrogen.

1. Grey Hydrogen: 

  • Grey hydrogen is produced using fossil fuels such as natural gas or coal. Grey hydrogen accounts for roughly 95% of the hydrogen produced in the world today.
  • The two main production methods are steam methane reforming and coal gasification. Both of these processes release carbon dioxide (CO2).
  • If the carbon dioxide is released into the atmosphere, then the hydrogen produced is referred to as grey hydrogen.

2. Blue Hydrogen: 

  • Blue hydrogen is similar to grey hydrogen, except that most of the CO2 emissions are sequestered (stored in the ground) using carbon capture and storage (CCS). 
  • Capturing and storing the carbon dioxide instead of releasing it into the atmosphere allows blue hydrogen to be a low-carbon fuel. 
  • Blue hydrogen is a cleaner alternative to grey hydrogen, but is expensive since carbon capture technology is used.

3. Pink Hydrogen: 

  • Pink hydrogen is produced through electrolysis of water but using energy from nuclear power, which does not produce any carbon dioxide emissions.
  • Pink hydrogen facilities can achieve a high capacity factor due to the steady base-load profile of nuclear power (involving both stability and density), as compared to the intermittent supply from renewable sources (solar, wind). 

4. Turquoise Hydrogen: Turquoise hydrogen is made using a process called methane pyrolysis. In this process methane is split into hydrogen and solid carbon with heating in reactors or blast furnaces.

National Green Hydrogen Mission:

  • National Green Hydrogen Mission was launched in 2023 with an outlay of Rs. 19,744 crores from FY 2024 to FY 2030.
  • Aim: To develop India into a global hub for production, usage and export of Green hydrogen and its derivatives.
  • The scheme has set out a goal of at least 5 million metric tonnes (MMT) of annual green hydrogen production capacity by 2030.
  • Initiative of: Ministry of New and Renewable Energy (MNRE).

As part of the mission, the government has awarded 3,000 megawatts of electrolyser manufacturing capacity to 15 companies, signaling a major industrial push.  

Recently, the government has announced that India aims to secure 10% of global green hydrogen demand, or 10 million metric tonnes (MMT) by 2030, which is an aspirational target than that set in the National Green Hydrogen Mission.  

Challenges associated with production of Green Hydrogen:

  • Renewable energy supply crunch: Achieving the target under the National Green Hydrogen Mission requires the installation of 125 GW of dedicated renewable energy and 250,000 gigawatt-hr. units of power (250 TWh), equivalent to about 13% of India’s present electricity generation. 
  • Relying on conventional energy sources: The main concern is that if electrolysers (which split water to produce hydrogen and oxygen) were to run 24x7, they would have to operate even at night when no solar power is available. This would then mean tapping into conventional coal-fired electricity (about 70% of the electricity on the grid is coal-generated).
  • Burning Biomass: India’s standards allow the use of biomass to produce green hydrogen, which results in carbon emissions when burnt.
  • Technological constraints: The challenge is to compress or liquify Hydrogen. It needs to be kept at a stable minus 253°C (far below the temperature of (-) 163°C at which Liquified Natural Gas (LNG) is stored; making its ‘prior to use cost’ extremely high.
  • Prohibitive Costs: The production cost of green hydrogen has been a prime obstacle. Research conducted by the International Renewable Energy Agency (IRENA) indicates that the cost of its production is about $1.5 per kg by 2030 (for countries with eternal sunshine and huge unoccupied areas) if several conservative measures are implemented.
  • Lack of Manufacturing and deployment of electrolysers: India’s current electrolysers manufacturing capacity is around 0.4 GW, which needs to be scaled to ~200 GW by 2050.
  • High cost of storage system: Fuel cells which convert hydrogen fuel to usable energy for cars, are still expensive.

Way Forward

Development of technology to produce green hydrogen is expensive. However, falling prices for renewable energy and fuel cells and stringent climate change regulations have spurred investment in the sector. 

  • Investing in R&D and promoting private sector participation in the hydrogen economy.
  • Developing standardised procedures, rules and standards for hydrogen economy which will standardise and scale up production. 
  • Mandating large users of hydrogen to shift to green hydrogen such as refineries, iron, and steel plants etc. For example, a minimum green hydrogen mandate can be introduced in such industries. 
  • Green hydrogen facilities can be created at sites where the cost of producing renewable energy is lowest. E.g., in the Thar desert region in Rajasthan and Ladakh etc.
  • Facilitating international trade in clean & green hydrogen.

Also Read: Hydrogen as an alternative fuel: Explained 

India's first Sustainable Aviation Fuel Plant

Context: Indian Oil's Panipat refinery has received ICAO ISCC CORSIA certification for producing sustainable aviation fuel (SAF) from used cooking oil. became the first company in India 

Relevance of the topic:

Prelims: India’s indicative blending Target for SAF; CORSIA framework.

Mains: Sustainable Aviation Fuel: Advantages & Challenges. 

India's first Sustainable Aviation Fuel Plant

  • IOC will have the capacity to produce 35,000 tonnes per year of SAF from used cooking oil by the end of 2025. 
  • Feedstock: The used cooking oil will be sourced by engaging aggregators from large hotel chains, restaurants, and sweets and snacks majors, which is otherwise discarded after use. 
  • The capacity (35,000 tonnes per year) will be sufficient to meet the country’s 1% SAF blending requirement (for international flights) by 2027. 

IOC has become the first company in India to receive the ISCC CORSIA certification for SAF production at its Panipat refinery in Haryana. 

ISCC CORSIA Certification System:  

  • ISCC CORSIA is a certification system for compliance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) criteria for SAF. It is a prerequisite for commercial SAF production. 
  • The certification sets a benchmark for other domestic refiners and industry players to scale up SAF production.

About Sustainable Aviation Fuel (SAF)

  • SAF is a biofuel that is produced from sustainable feedstocks. SAF has chemistry and properties similar to conventional aviation turbine fuel (ATF) or jet fuel (derived from crude oil) but with a smaller carbon footprint. 
  • It can be blended at different levels with limits between 10% and 50%, depending on the feedstock and how the fuel is produced. 
  • Sources of SAF: 
    • Oil seeds, other fats, oils, and greases
    • Agricultural residues, Forestry residues, Wood mill waste
    • Municipal solid waste streams, Wet wastes (manures, wastewater treatment sludge)
    • It can also be produced synthetically via a process that captures carbon directly from the air. 

Advantages of SAF: 

  • Engine compatibility: Existing aircraft engines can easily use the SAF-ATF blend (up to 50% blend) without modification. 
  • Fewer greenhouse gas emissions: It is estimated that SAF alone is likely to account for over 60% of the global aviation industry’s decarbonisation efforts.
  • Sustainable: Raw feedstock does not compete with food crops or water supplies, or is responsible for forest degradation. 
  • More flexibility: SAF is a replacement for conventional jet fuel, allowing for multiple products from various feedstocks and production technologies.

Challenges Associated with SAF:  

  • SAF is about three-four times more expensive than the price of regular jet fuel.
  • SAF success will require using a greater diversity of feedstock and production methods.

Moreover, collection of SAF would be a challenge. While it is easy to collect from large hotel chains, a solution needs to be found for collection from small users, including households. 

Key Facts:

  • International Civil Aviation Organisation's (ICAO) is dedicated to reducing carbon emissions from international civil aviation.
  • To mitigate the environmental impact of aviation, ICAO has set several aspirational goals:
    1. Two Percent Annual Fuel Efficiency Improvement: Targeted through 2050.
    2. Carbon Neutral Growth: Striving for no net increase in carbon dioxide (CO2) emissions from international aviation. 
    3. Net Zero CO2 Emissions from aviation by 2050. 
  • These goals are encompassed under two major initiatives: Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and the Long-Term Aspirational Goals (LTAG). 

CORSIA Implementation Phases: 

CORSIA will be implemented in three phases:

  1. Pilot Phase (2021-2023): Voluntary participation by States.
  2. First Phase (2024-2026): Also voluntary, but with expanded participation.
  3. Second Phase (2027 onwards): Mandatory for all ICAO member states, including India.

India’s indicative blending Target for SAF: 

  • In line with the CORSIA framework, India’s National Biofuel Coordination Committee (NBCC) has set the initial indicative targets for blending of SAF with jet fuel 2027 onwards, starting with international flights. The indicative targets are:
    • 1% SAF indicative blending target in 2027 (Initially for International flights)
    • 2% SAF blending target in 2028 (Initially for International flights)
    • 5% by 2030. 

The success of SAF will require using a greater diversity of feedstock and production methods. This includes areas such as investing in carbon offset programmes and the diversification of SAF feedstocks. 

IOC is also working to set up units based on the alcohol-to-jet pathway, which involves using ethanol as a feedstock to make SAF. 

Significance of Iran for India

Context: India’s stakes in its relationship with Iran go far beyond crude oil. The recent conflict between Israel and Iran, leaves India in a difficult spot in balancing its policy with Iran and Israel.

Relevance of the topic:

Prelims: About Chabahar port, INSTC, Tehran Declaration, New Delhi Declaration

Mains: Significance of Iran for India.

Iran has been a long-standing diplomatic and economic partner to India. 

India’s relations with Iran

  • India and Iran share ancient civilisational ties- common cultural, linguistic, and ethnic roots.
  • India signed a Friendship Treaty with Iran in 1950, committing to perpetual peace and friendship.
  • Two landmark agreements:
    • Tehran Declaration (2001): Aimed at boosting cooperation in energy, trade, and security.
    • New Delhi Declaration (2003): Covered various areas of bilateral cooperation, including economic collaboration, hydrocarbons, science and technology, education, reconstruction of Afghanistan and combating international terrorism.

Iran is important to India for multiple reasons, including its geographical location and rich energy resources. 

Significance of Iran to India: 

  • Strategic Location in West Asia: Iran lies at the crossroads of West Asia, Central Asia, and South Asia. It is located near the Strait of Hormuz, a critical choke point through which about 20% of global oil passes.
  • Gateway to Central Asia and Afghanistan: Iran offers an alternative land and sea route to access Afghanistan (bypassing Pakistan) and Central Asian Republics like Turkmenistan, Uzbekistan, Kazakhstan, etc.
  • Infrastructure Projects: India and Iran signed an MoU in 2015 to develop the Shahid Beheshti terminal at Chabahar Port. Chabahar port project being jointly developed in Iran is of crucial importance to India, as:
    • It would provide connectivity to Afghanistan and the resource-rich Central Asian countries, bypassing Pakistan.
    • Chabahar is a key link in the International North South Transport Corridor (INSTC), connecting India with Iran, Russia, Central Asia, and Europe, reducing transit time and cost while boosting trade with Eurasia.
    • It would counter China’s growing influence in the region, particularly its Belt and Road Initiative. 
image 27

Important Oil Supplier to India

  • Before Western sanctions over its alleged nuclear program, Iran was one of India’s top three oil suppliers for many years. Critical infrastructure, such as the Mangalore Refinery and Petrochemicals Ltd, was built with the capability to process Iranian crude oil.
  • Iran was a preferred supplier for India as it used to extend favourable terms, including discounted prices and extended credit periods. Oil supplies continued irrespective of the UN sanctions against Iran.
  • Note: In 2018, when the US reimposed its sanctions after getting out of the nuclear deal, India used the rupee payment mechanism to partly pay for the oil in Indian rupee, to get past the US sanctions. 

Important Export Destination:  

  • Iran was an important export destination for certain items from India including semi/wholly milled rice, black tea, fertilisers, organic/inorganic/agro chemicals, pharmaceuticals, yarns and fabric.
  • Exports to Iran were as much as $5.3 billion in 2013. However, the fall was sudden and sharp since 2019, after India stopped buying oil from the country, with exports in FY25 at $1.24 billion. 

Exporters hope for a return to normal relationship with Iran, as the country holds a lot of potential for growth.

India ranks 71st on Energy Transition Index 2025: WEF

Context: India has ranked 71 out of 118 countries in the recently launched Energy Transition Index (ETI) by the World Economic Forum. 

Relevance of the Topic: Prelims: Key facts about the Energy Transition Index. 

Energy Transition Index

  • Launched by: World Economic Forum
  • ETI ranks countries based on their progress towards energy transition from fossil fuels to clean energy. 
  • The report benchmarked the performance of energy systems of 118 countries across:
    • Threesystem performance dimensions- energy security, sustainability and equity.
      • Energy security: presence of a stable and resilient energy supply through developing a diversity of energy sources as well as grid and power supply reliability)
      • Equity: access to energy for all, including consumers and industries. 
      • Sustainability: promoting energy sources that have lower impacts on the environment such as lower carbon footprints.
    • Five transition readiness factors- political commitment, finance and investment, innovation, infrastructure, and education and human capital.
  • The Index used 43 indicators under these broad categories using data from multiple sources and organisations, and scored countries on a scale of 0 to 100.

Energy Transition Index 2025

Global Highlights: 

  • Sweden (score 77.5) topped the list of 118 countries, followed by Finland and Denmark. China was ranked 12th, and the US was 17th. 
  • While the majority of countries improved their scores in 2025, the share of countries advancing across all three energy dimensions was only 28%, which reflects uneven progress.
  • Despite $2 trillion in clean energy investment in 2024, emissions hit a record 37.8 billion tonnes in the hottest year on record (2024), as energy demand rose 2.2% driven by artificial intelligence, data centres, cooling and electrification.

India-specific Highlights: 

  • India’s rank has fallen from 63rd in 2024 to 71 out of 118 countries in 2025. India scored 53.3 on the Index.
  • India has made progress in lowering energy intensity and CH4 emissions, favourable energy regulations and increasing clean energy investments.
  • India needs improvement in grid reliability, energy access for rural areas and further reducing dependence on imported energy. This requires further investment in infrastructure, renewables, labour force development and financing to boost the country’s energy transition. 

As per WEF, the top five largest economies- China, the US, EU, Japan and India- will determine the pace and direction of the global energy transition due to their sheer size. 

Together, they account for around half of the global GDP, population and total energy supply (TES), and also nearly two-thirds of global emissions, giving them an outsized influence through their consumption patterns, investment flows and policy choices. 

Flue Gas Desulphurisation

Context: A high-powered committee of experts, led by Principal Scientific Advisor (PSA) has recommended that India should scrap its policy of mandating coal-fired thermal power plants (TPPs) to install Flue Gas Desulphurisation (FGD) units. FGD units are fitted in TPPs to cut harmful sulphur dioxide (SO2) emissions. 

92% of India’s 600 TPPs have not yet installed FGD units. Instead, the committee recommends limiting FGD unit requirement to plants that use imported or high-sulphur (>0.5%) coal, as these contribute more significantly to SO₂ pollution.

Instead, the study recommends limiting this requirement to plants using imported or high-sulphur (>0.5%) coal, as these contribute more significantly to SO₂ pollution.

Relevance of the Topic:  Prelims: Key facts related to Desulphurisation.  

Rationale behind the Suggestions

  • The rationale underlying the analysis is that 92% of the coal used in Indian plants has low sulphur content (0.3%-0.5%).
    • SO2 levels in ambient air across the country are around 10-20 micrograms/cubic metre, well below India’s air quality norms of 80 micrograms/cubic metre. 
    • SO2 levels in cities near plants with operational FGD units do not differ significantly from those without these units.
    • Particulate Matter samples in urban areas show low levels of elemental sulphur (max 8 micrograms/cubic metre) which is not a significant concern. Thus, FGD units may offer limited benefits in reducing PM pollution. 
  • Norms mandated by the Central Pollution Control Board that require stack heights (exhaust columns) in the thermal power plants be a minimum 220 metres, coupled with Indian climatic conditions, ensure that SO2 emissions do not threaten local air quality.
  • A study by IIT-Delhi in 2024 found that acid rain, the most visible consequence of high SO2 emissions, was not a significant issue in India.
  • Installing FGD in all coal plants would increase power consumption as well as freshwater consumption in the plants, resulting in an additional 69 million tonnes of CO2 (2025-30), while reducing SO2 emissions by 17 million tonnes.
  • Unintended benefit of Sulphate Aerosols: When SO₂ is released into the atmosphere, it reacts with water vapour and other compounds to form sulphate aerosols. These aerosols reflect incoming solar radiation (shortwave radiation) back into space, which results in radiative cooling of the Earth's surface. This cooling effect masks or offsets part of the warming caused by greenhouse gases. 

Flue Gas Desulphurisation

  • Flue Gas Desulphurisation (FGD) is a clean technology system that separates the sulphur dioxide from the exhaust flue gas of coal-fired thermal power plants. 
  • FGD systems utilise various methods, including wet scrubbing with limestone slurry or dry scrubbing with a dry sorbent, to absorb SO2 from the flue gas. 
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How FGD Works?

  • Flue Gas Collection: Flue gas, containing SO2 and other pollutants, is collected from the power plant's boiler or other combustion sources. 
  • SO2 Removal: The collected flue gas is then passed through an FGD system.
    • In wet scrubbing, the gas is sprayed with a limestone slurry. The SO2 reacts with the limestone, forming a calcium sulfite or sulfate, which can be removed as a by-product or waste. 
    • In dry scrubbing, a dry sorbent, like lime or activated carbon, is introduced to the flue gas, where it absorbs the SO2. 
  • Waste Product Handling: The by-products or waste generated during FGD, such as gypsum or a dry waste product, are collected and either disposed of or utilized in other applications. 
  • Cleaned Flue Gas, now with reduced SO2 levels, is discharged into the atmosphere through the stack. 

What are Building-Integrated Photovoltaics? 

Context: Building-Integrated Photovoltaics (BIPV) is an emerging alternative to conventional rooftop solar power installations.  

Relevance of the Topic : Prelims: Key facts about BIPVs- benefits, challenges. 

  • With over 17 GW of installed rooftop solar (RTS) capacity as of April 2025, India has made commendable progress in its renewable energy mission. 
  • In space-starved urban areas, RTS systems face limitations due to insufficient shadow-free rooftop space. Nearby buildings, trees, water tanks etc. obstruct the direct sunlight. This structural challenge necessitates a shift from conventional rooftop installations to Building-Integrated Photovoltaics (BIPV).

Building-Integrated Photovoltaics (BIPV)

  • BIPV are solar panels integrated into the structure of buildings, such as facades, roofs, windows, and balconies, replacing conventional construction materials while simultaneously generating electricity.
image 10

Benefits of BIPV: 

  • Dual Use: Generating electricity and also working as a structural part of a building. BIPV can turn entire buildings into power generators by integrating solar elements directly into architectural elements. This needs replacing conventional construction materials such as glass, tiles, and cladding with solar alternatives.
  • Efficient Space utilisation: In space-constrained high-rises, BIPV can generate 3-4 times more power by utilising facades and other building surfaces, compared to limited rooftop solar capacity.
  • Inclusive Solar access: BIPV enables solar adoption beyond rooftops, ideal for independent homes and apartments with no roof access. Balcony-integrated systems, already popular in Germany, can help households save up to 30% on electricity bills.

What is the status of BIPVs in India?

  • India has some BIPV installations. E.g., Datacenters building in Navi Mumbai, Renewable Energy Museum in Kolkata, Jindal Steel & Power Ltd. facility in Angul, Odisha (hosts one of the largest BIPV installations in India), and is also incorporated into some railway stations.
  • However, BIPVs adoption in India has been limited by high initial costs, policy gaps, inadequate technical capacity, and reliance on imports. Low awareness, lack of dedicated incentives, and absence of clear standards also pushed BIPV out of early building-design considerations.

How can BIPV uptake be scaled up?

  • Expand Financial Incentives: Increase subsidies for BIPV under schemes like the PM Surya Ghar Muft Bijli Yojana (currently ₹78,000 for a 3-kW system). Introduce dedicated incentive schemes for commercial and industrial BIPV adoption, similar to Seoul’s model with up to 80% subsidy.
  • Policy Integration: Integrate BIPV in the National Building Code, Energy Conservation Building Code, and Eco Niwas Samhita.
  • Pilot Projects: Demonstrating BIPV through pilot projects in public infrastructure (via public-private partnerships) can improve visibility and catalyse wider acceptance.
  • Boost Local Manufacturing: Extend PLI schemes and invest in R&D for customised, India-specific BIPV products.
  • Awareness & Capacity Building: Train architects, planners, and builders; run public campaigns to mainstream BIPV.
  • Innovative Financing Models: Financial arrangements such as Renewable Energy Service Company model, and long-term power purchase agreements can help enhance project reliability and enable large-scale BIPV deployment.
  • Adapt successful global models such as- Europe’s Energy Performance of Buildings Directive mandating solar use in new buildings. South Korea’s urban solar subsidies, making BIPV cost-competitive in cityscapes.

To achieve its 300 GW solar target by 2030, India must look beyond rooftops and embrace land-neutral solutions like BIPV, which has an estimated 309 GW potential in existing buildings alone.  

Regenerative Braking System

Context: India has launched the country’s first 9000 HorsePower (HP) electric freight locomotive engine at Dahod, Gujarat with regenerative braking capability. 

Relevance of the Topic: Prelims: Key facts about Regenerative Braking System.

Dahod-9000 Electric Engine: 

  • Manufactured in: Dahod, Gujarat in collaboration with German engineering firm Siemens. 
  • 9000 horsepower (HP) locomotive engine. Haulage capacity- 5800 tonnes.
  • Has regenerative braking capability, i.e., when the engine brakes, it becomes a generator and produces power.
  • Six-axle electric engine with an average speed of 75 km/h (max speed of 120 km/h). No noise or vibration (in this engine). 
  • Advantages: High quality; low cost; high export potential; boost freight movement; reduce CO2 emissions.

What is a Regenerative Braking System? 

  • A regenerative braking system is a technology used in electric and hybrid vehicles to recover the kinetic energy of the vehicle that would otherwise be lost during braking. 
    • Braking is the mechanism by which an automotive vehicle in motion slows down. 
    • A vehicle moving faster has more kinetic energy than a vehicle moving slower, so the process of braking removes (mostly) kinetic energy from the vehicle. 
    • In the traditional braking systems, when the brakes are applied the kinetic energy from the vehicle is converted into heat, which is then dissipated into the environment. 
  • In regenerative braking systems, instead of converting the kinetic energy into heat, it is converted into electrical energy which can then be stored in the vehicle's battery for later use. This is done by using the electric motor in the vehicle which acts as a generator during the braking process.
image 22

How does a Regenerative Braking System work?

  • Kinetic Energy Conversion: When a vehicle is in motion, it possesses kinetic energy. When the driver applies the brakes, the regenerative braking system starts working. 
  • Motor as a Generator: The electric motor which normally drives the wheels, operates in reverse during braking. It starts acting as a generator, converting the vehicle's kinetic energy into electrical energy.
  • Energy Storage: The electrical energy generated during braking is directed to the vehicle's battery or a supercapacitor for storage.
  • Energy Reuse: The stored energy can be used later to power the vehicle, reducing the need to draw as much power from external sources and improving the vehicle's overall efficiency.

Benefits of Regenerative Braking:

  • Improved Energy Efficiency & reduced emissions: By recovering and reusing energy, regenerative braking reduces the overall energy consumption of the vehicle and reduces emission of heat. 
  • Reduced Wear and Tear: Because regenerative braking reduces reliance on traditional friction brakes, it can decrease wear and tear on brake components, leading to lower maintenance costs.

Limitations:

  • Efficiency Variations: The efficiency of energy recovery decreases as the vehicle's speed drops. (Lesser the speed of vehicle, lesser kinetic energy is available for conversion to electrical energy and storage)
  • Not a Complete Replacement: Regenerative braking often cannot bring a vehicle to a complete stop on its own and must be supplemented with conventional braking systems.

IMO’s Net Zero Framework for Global Shipping Industry

Context: Recently, at its 83rd session, the Marine Environment Protection Committee (MERC) of the International Maritime Organisation (IMO) has approved a draft legal text for a Market-Based Measure (MBM) framework aimed at decarbonising the international shipping industry and promoting green shipping.

Relevance of the topic:

Prelims: MEPC-83, MARPOL Convention, Green fuels, CBDR-RC principle.

Mains: Need for green shipping, steps taken and implementation challenges.

Why does Green Shipping Matter?

Shipping plays an outsized role in global emissions: 

  • The sector emits approximately one billion metric tonnes of GHG each year, representing about 2.8% of total global emissions.
  • If ranked as a country, international shipping would be the sixth-largest emitter in the world, between Germany and Japan. Without intervention, shipping emissions could increase by 50–250% by 2050 due to growing global trade.

Given its international nature, shipping is uniquely positioned for global regulation, making the IMO's action a significant precedent.

International Maritime Organisation: 

  • IMO is the United Nations specialised agency responsible for regulating maritime transport, ensuring the safety and security of shipping, and preventing marine pollution.
  • Its main role is to create a regulatory framework for the shipping industry that is fair and effective, universally adopted and universally implemented.
  • IMO measures cover all aspects of international shipping- including ship design, construction, equipment, manning, operation and disposal. 
  • Established in1948 (under the UN Convention), came into force in 1958.
  • Headquarters: London, United Kingdom
  • Members: 175 Member States including India.

For over ten years, IMO has been working to decarbonise the maritime industry. It undertook various strategies such as: 

  • Initial GHG Strategy (2018) and its Updated GHG Strategy (2023).
  • Technical and operational measures under Annex VI of the MARPOL Convention, including: Energy Efficiency Design Index (EEDI), Ship Energy Efficiency Management Plan (SEEMP), Mandatory fuel oil consumption reporting.

However, without a binding economic mechanism, these efforts had limited impact. This led to a shift in focus toward Market-Based Measures (MBMs) to internalise the environmental cost of emissions.

Key Highlights of MEPC-83

At the 83rd session, IMO adopted Singapore’s Hybrid Model as the IMO Net Zero Framework- making shipping the first global industry with a binding emissions levy. It aims to help the shipping industry reduce its greenhouse gas emissions to net zero by or around 2050.

Features of Singapore’s Hybrid Model (IMO Net Zero Framework):

  • GHG Fuel Standard: Sets a greenhouse gas (GHG) intensity benchmark for marine fuels. Encourages the use of Zero or Near-Zero emission fuels- such as green hydrogen, ammonia, or methanol. Ships are required to meet a specified carbon intensity target per megajoule (MJ) of fuel.
  • Tiered Credit and Penalty System: Ships exceeding performance targets (i.e., using cleaner fuels than the standard) receive surplus emission credits. Ships underperforming (i.e., emitting more than the threshold) must purchase remedial credits or units to offset their excess emissions.
  • Progressive Benchmarks: The GHG intensity thresholds become stricter over time, driving innovation and investment in greener technologies. E.g., IMO rewards fuels under 19.0 g CO₂e/MJ until 2034, and under 14.0 g CO₂e/MJ thereafter.
  • Global but Differentiated Incentives: While the framework is universally applicable, it is designed to provide economic flexibility for developing countries.

Challenges to the IMO Net Zero Framework

1. Legal and Procedural Hurdles:

The draft Net Zero Framework was approved with 63 votes in favour, 16 against, and 24 abstentions. To implement the Net Zero Framework, IMO needs to amend Annex VI of the MARPOL convention, which governs air pollution from ships.

  • The amendment will undergo a six-month circulation period among all contracting parties to MARPOL. For final adoption, it requires a two-thirds majority of votes from members present and voting.
  • Even if the amendment is adopted, it can still be blocked if one-third of the parties, representing at least 50% of the global shipping tonnage, submit formal written objections.

2. Geopolitical Resistance: 

  • The US boycotted the IMO deliberations and warned of reciprocal measures, if a global levy (especially one aligned with the EU proposal) was adopted.
  • Major fossil fuel exporters (like Saudi Arabia) and large shipping nations (like China) are resistant to aggressive emission controls. 
  • Shipowners, especially from traditional maritime powers like Greece, are sceptical about the economic feasibility and compliance costs.
  • Small Island Developing States (SIDS) and Least Developed Countries (LDCs) demanded high levies to fund climate adaptation.
  • Norway and Scandinavian nations pushed for reward mechanisms to acknowledge early investments in green tech.
  • Brazil advocated for methanol as a transitional marine fuel.

3. Erosion of the CBDR-RC principle:

  • CBDR-RC is a core principle enshrined in climate agreements like UNFCCC, Kyoto Protocol and the Paris Agreement which acknowledges that all nations must address climate change but recognise historical responsibility and unequal capacities. Developed nations, with their longer industrial histories, are expected to bear greater burdens.
  • However, recent IMO proceedings reflect an effort by wealthier nations to shift responsibility onto developing economies, despite stark differences in income and consumption. 

Impacts on India

While some short-term cost burdens are expected, India stands to benefit significantly in the long run: 

  • Minimal Near-Term Impact: India’s logistics costs are projected to increase by 4.98-7.29% (imports) and 5.92-8.09% (exports) by 2030.
  • Limited Exposure: India currently operates nearly 236 ships over 5,000 gross tonnage, with only 135 involved in international voyages. Since MBMs apply only to international shipping, India’s coastal fleet remains unaffected. 
  • Green Hydrogen Export Potential: Under the National Hydrogen Mission, India is developing a competitive green hydrogen sector. Indian green hydrogen, with a GHG intensity of  about 16.7 gCO₂e/MJ, is well below the IMO’s threshold of 19.0 gCO₂e/MJ (till 2034) and 14.0 gCO₂e/MJ (thereafter), making it a viable export for green fuel bunkering globally.
  • Port Infrastructure: At least three Indian ports are gearing up to offer green hydrogen bunkering, positioning India as a future clean fuel hub.

Despite persistent disagreements, the adoption of a MBM by the IMO represents a milestone in the journey toward decarbonisation. If successful, this framework could make shipping the first truly global sector to operate under binding climate goals, setting a powerful precedent for others to follow.