India plans to stop building new coal-fired power plants, apart from those already in the pipeline, by removing a key clause from the final draft of its National Electricity Policy (NEP), sources said.

The draft, if approved by the federal cabinet chaired by Prime Minister Narendra Modi, would make China the only major economy open to fresh requests to add significant new coal-fired capacity.

India and China account for about 80% of all active coal projects as most developing nations wind down capacity to meet climate targets. As of January 2023, only 20 countries have more than one coal project planned, according to E3G, an independent climate think tank.

“After months of deliberations, we have arrived at a conclusion that we would not need new coal additions apart from the ones already in pipeline,” one of three government sources said.

The sources declined to be identified as they are not authorised to speak to the media. India's power ministry did not respond to requests seeking comment.

Planned plants unaffected

The new policy, if approved, would not impact the 28 GW of coal-based power in various stages of construction, the sources said.

China and India have together been lobbying against an end date for the use of fossil fuels and at the Cop26 climate talks in 2021 weakened language on the transition away from coal.

India, whose proposed coal power capacity is the highest after China, had repeatedly refused to set a timeline to phase out coal, citing low per-capita emissions, surging renewable energy capacity and demand for inexpensive fuel sources.

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Coal is expected to be the dominant fuel in generating electricity in India for decades, but activists have pressed for a halt to new coal-fired plants, arguing this would at least help to reduce the share of the polluting fuel in overall power output.

The draft, India's first attempt at revising its electricity policy enacted in 2005, also proposes delaying the retirement of old coal-fired plants until energy storage for renewable power becomes financia