Government Relaxes FGD Rules to Cut Electricity Costs by 25-30 Paise Per Unit

The Indian government has eased sulphur emission norms for most coal-fired power plants, a move expected to cut electricity costs by 25-30 paise per unit while balancing environmental goals with economic realities.

According to a gazette notification, the 2015 mandate for installing flue-gas desulphurisation (FGD) systems will now apply only to plants within 10 kilometres of cities with populations exceeding one million. Plants in critically polluted areas or non-attainment cities will be assessed individually, while nearly 79% of India’s thermal power capacity is exempt from the mandatory FGD requirement.

Officials said this targeted approach follows detailed analyses by the Central Pollution Control Board and independent studies from IIT Delhi, CSIR-NEERI, and the National Institute of Advanced Studies (NIAS). These studies found that ambient sulphur dioxide levels in most regions remain well below the National Ambient Air Quality Standards (NAAQS), with typical readings between 3 and 20 micrograms per cubic meter—far below the threshold of 80 micrograms per cubic meter.

Indian coal’s low sulphur content (less than 0.5%) and high stack heights at plants help disperse SO2 efficiently. Additionally, retrofitting FGDs nationwide was projected to add 69 million tonnes of CO2 emissions between 2025 and 2030 due to increased limestone mining, transportation, and power use.

Industry executives have welcomed the decision, calling it a science-based, rational approach that avoids unnecessary costs while maintaining environmental safeguards. "This is a rational, science-based move that avoids unnecessary costs and focuses regulation where it is most needed," said a senior executive at a public sector utility. "More importantly, it will help keep electricity affordable."

Officials estimated that mandatory retrofitting would have cost over Rs 2.5 lakh crore—roughly Rs 1.2 crore per MW—and would have required up to 45 days of downtime per unit, risking grid stability during peak demand.

A senior government official stressed the change is not a rollback but a recalibration. "This is not a rollback. It is a recalibration based on evidence. Our approach is now targeted, efficient and climate-conscious," the official said.

The government plans to submit an affidavit outlining these findings to the Supreme Court in the ongoing MC Mehta vs Union of India case, where FGD timelines have been under judicial review.

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