India Exempts Majority of Thermal Plants from FGD Installation Under Revised 2025 Policy

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In July 2025, the Ministry of Environment, Forest and Climate Change introduced major changes to the regulations governing flue gas desulphurisation (FGD) systems for thermal power stations. Under the revised policy, most coal-based power plants will no longer be required to install FGD units. The Ministry clarified that the decision is a science-based, targeted approach to pollution control, rather than a relaxation of environmental norms. The shift comes after years of slow implementation and concerns about the high financial and environmental costs of widespread FGD deployment.

Background: FGD In India Thermal Power Sector

FGD technology is used to reduce sulphur dioxide (SO₂) emissions from coal-fired power plants. In 2015, India had mandated all thermal power plants to install these systems. However, by 2025, only 8% of the 180 coal-fired units had complied. The slow rollout was largely due to supply constraints and high capital costs, prompting the government to extend deadlines and re-evaluate the policy.

New Categorisation Of Power Plants

Under the revised guidelines, thermal power plants are now classified into three categories based on location and pollution risk:

• Category A: Covers ~11% of plants located within 10 km of major urban areas or the National Capital Region (NCR). These units must install FGDs by December 30, 2027.

• Category B: Includes ~11% of plants situated near Critically Polluted Areas (CPAs) or Non-Attainment Cities (NACs). FGD installation will depend on a case-by-case review by the Expert Appraisal Committee, with a compliance deadline of December 30, 2028.

• Category C: The remaining 78% of thermal units are exempt from installing FGDs.

Justification For Policy Shift

The Ministry cited falling ambient SO₂ levels and research suggesting that SO₂ is not a major contributor to PM2.5-related health issues in India. Current Indian air quality norms limit SO₂ to 50 micrograms per cubic metre annually, a stricter standard than those in Japan, the EU, or Australia. A 2023 assessment of 492 Indian cities found only two non-compliant with these limits. Additionally, Indian coal has low sulphur content (~0.5%), which results in comparatively low SO₂ emissions despite high ash levels.

Economic Analysis: Cost vs. Benefit

Installing FGD units entails a significant cost of around Rupees 1.2 crore per megawatt, adding up to Rupees 2.54 lakh crore for all plants. The Ministry argued that even 100% SO₂ removal would lead to only marginal improvements in particulate pollution and health outcomes. Furthermore, studies have shown similar SO₂ levels around plants with and without FGDs, questioning the system’s overall effectiveness.

Health And Environmental Implications

This revised regulation is designed to strike a balance between environmental responsibility and economic practicality. By targeting installations in regions with poor air quality, the policy aims to maximise impact where it is needed most. The exemption for many plants recognises that FGDs have limited value in areas where SO₂ emissions are already under control.

Compliance Timelines And Monitoring

• Category A plants must complete FGD installation by December 30, 2027.

• Category B units will follow a case-specific decision process, with a final deadline of December 30, 2028.

• Category C facilities remain exempt for now.

The Ministry has stated it will continue to monitor air quality and pollution trends, and adapt policies as required to meet environmental goals.

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