Centre relaxes FGD norms for power plants to lower electricity costs

The Ministry of Environment, Forest and Climate Change has eased the requirement for the mandatory installation of flue gas desulphurisation (FGD) systems at most coal-based thermal power plants.

Under the revised framework—finalised after extensive consultations and multiple independent studies—FGD mandates will now apply only to plants located within 10 kilometres of cities with populations exceeding one million.

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Power plants in critically polluted areas or non-attainment cities will be assessed on a case-by-case basis.

All other plants—representing nearly 79 per cent of India’s thermal power capacity—are now exempt from mandatory FGD installation.

Crucially, the relaxed norms are expected to reduce electricity costs by 25 to 30 paise per unit.

Experts say this benefit will eventually reach consumers. In a high-demand, price-sensitive economy, the impact could be significant—helping state discoms contain tariffs and easing the subsidy burden on governments.

The financial burden of mandatory FGD retrofitting was previously estimated at over ₹2.5 lakh crore, or ₹1.2 crore per MW, with installation timelines stretching up to 45 days per unit.

A number of power producers had warned that such a mandate would not only increase costs but also risk grid stability during peak demand seasons.

The decision follows a series of studies conducted by IIT Delhi, CSIR-NEERI, and the National Institute of Advanced Studies (NIAS), which found that ambient sulphur dioxide levels in most parts of India are well within the National Ambient Air Quality Standards (NAAQS).

Measurements across multiple cities showed sulphur dioxide concentrations ranging between 3 and 20 µg/m³—significantly below the NAAQS threshold of 80 µg/m³.

The studies also raised concerns about the environmental and economic viability of a universal FGD mandate in India. Indian coal generally has a sulphur content of less than 0.5 per cent.

Moreover, due to high stack heights and favourable meteorological conditions, sulphur dioxide disperses efficiently in the atmosphere.

The NIAS study further warned that nationwide FGD retrofitting could lead to an additional 69 million tonnes of carbon dioxide emissions between 2025 and 2030—stemming from increased limestone mining, transportation, and power consumption.

FGDs are considered effective in regions with high-sulphur coal, elevated sulphur dioxide levels, and dense urban populations. However, studies suggest that such conditions are not prevalent across India—making a universal FGD rollout unnecessary, expensive, and potentially counterproductive.

Industry executives have welcomed the move.

“This is a rational, science-based decision that avoids unnecessary costs and targets regulation where it is truly needed,” said a senior executive at a leading public sector utility. “More importantly, it will help keep electricity affordable,” he added.