India has a critical mineral policy! – Issue #60
Eventful Week: Critical Mineral Security, Heatwave Impact, Green Credits, Renewable Energy Scale-up, EV Market Boom, and Global Battery Frenzy
News of the week
The previous instalment of this newsletter was packed with novel events.
There was the attempted coup in Russia; Indian companies announced manufacturing forays into the US, thanks to the Inflation Reduction Act; India entered the Mineral Security Partnership; the Paris Finance Summit was held; and Adani faced heat from US regulators.
The week that followed was calmer but no less eventful. India released its critical minerals list. This has been long overdue. To make a credible attempt at critical mineral security, the country has to first identify the minerals it needs most – and then work its way down that list. Well, the report is out now. You can see it here. After talking to a clutch of ministries (including agriculture), it identified 30 minerals that are critical for India. For ten of these, including lithium, the country has no production capacity and is wholly reliant on imports.
The hard work starts now. With large economies vying to secure their critical mineral supplies, the global race for critical minerals is well and truly underway. One wonders how India will fare.
Heatwave deaths continued to make headlines. According to the Hindustan Times, India has dodged a bullet this year. While Ballia has garnered the most attention, heatwaves were reported from Bihar, West Bengal, Odisha, coastal Andhra Pradesh, Jharkhand and Chhattisgarh as well. The paper reported that temperatures in these states were high enough to be life-threatening. Parts of Bihar and Bengal saw the heatwave persist for 19 and 17 days, respectively. Given the delayed monsoon (which was traced back to Biparjoy, which was traced back to the hotter Arabian Sea), the humidity was high, resulting in a heat index that went as high as 50 to 60 degrees.
What does that mean? As HT reported, in Bihar, heatwave pockets recorded maximum temperatures between 40 to 45 degrees, with humidity ranging from 37% to 47%. “Maximum temperature of 40 degrees with 47% humidity translates to a so-called “feels like” temperature or heat index of 53 degrees; a maximum temperature of 45 degrees with humidity of 37% translates to a heat index of 60 degrees, according to the US National Oceanic and Atmospheric Administration’s heat index calculator.”
Such numbers are unimaginable. They push the human body entirely beyond its safe limits.
News also emerged that state failure had further exacerbated the matter. As The Wire reported, districts like Kannauj, Banda, Chandauli, Deoria, Kaushambi, Ambedkarnagar, and Bareilly have been experiencing frequent power cuts. “Note that all these areas have also reported a high number of deaths from extreme heat and weather conditions,” said the news website. In Kannauj, it said, despite chief minister Adityanath’s promise to provide 18 hours of electricity in rural areas, the supply of electricity has been limited to only 14 hours a day.
And so, here is a paradox for you. UP has heat action plans and load shedding during a heat wave. One sees performative politics underpinned by a deeper apathy towards people and governance. And all this while the causal factors – warming seas, rising incidence of cyclones – continue to entrench themselves. Why does this country always respond only after a crisis? As for India's 2023 heatwave crisis, it blew over only with the monsoon stretching over the whole country last week.
Last week, the same pattern showed up at the environment ministry. It identified eight activities under The Environment (Protection) Act, 1986, for which green credits can be earned — tree plantation, water conservation, water harvesting and water use efficiency/savings, promoting natural and regenerative agricultural practice, waste management, air pollution reduction, mangrove conservation and restoration, ecomark based green credit and construction of buildings and other infrastructure using sustainable technology and material. How exactly demand for these credits will be sustained are yet to be formulated.
These credits, as The Print reported, can be sold at a trading platform after validation by a “steering committee”. The whole exercise, said the website, is meant to incentivise voluntary action. That makes for a happy mix. Our institutions – like the environment ministry – takes ecocidal steps. Another instance is the coal ministry which continues to auction coalblocks + push CIL to boost production. Ameliorative actions, however, are left to voluntary actions supported by incentives like green credits.
Just two days after the draft green credits rules were notified by the MOEFCC, the power ministry notified its own rules for a Carbon Credit Trading Scheme, 2023 (CCTS). These credits will be more in line with a compliance or 'cap-and-trade' regime. So demand for credits shall be floated through industry-specific emission reduction norms (which are to be devised by the BEE in conjunction with a National Steering Committee) and can be met by purchasing credits that are verified by third party accreditors and traded on India's power exchange platforms.
Another report from last week is worth noting. India’s renewables market is becoming a game of scale. We knew this was happening in manufacturing. As groups like Reliance set up vertically-integrated gigafactories, smaller manufacturers will struggle. Now comes the news that even renewables installations are becoming a game of scale. A combination of factors, including government tendering norms, have “made it hard for MSMEs to bid effectively for government-backed solar projects from setting up solar-run agricultural pumps to rooftop systems and micro-grids,” reported the Thomson Reuters Foundation. “Once considered pioneers in the business and credited with creating early awareness among consumers, MSMEs are now operating as sub-contractors and sales agents for big companies that are cornering most solar projects across the country.”
The Centre has now asked all states and union territories to prepare a renewable energy plan, with a focus on land acquisition, to help achieve India's target of 500 gigawatts of RE capacity by 2030.
Other news. Two years ago, when CarbonCopy wrote about India’s green hydrogen push, a senior manager at Reliance had said the sector would need government support. That demand has finally been met. Last week, India announced two schemes, adding up to Rs 17,490 crore between them, to incentivise production of green hydrogen and manufacturing of electrolysers. Another PLI for grid-connected energy storage technologies may be in the works too.
Yet other news. With Russia complaining about its rising stockpiles of the Indian Rupee, Indian refiners are considering paying in Chinese yuan for Russian crude. The catch is: this strengthens the Yuan’s attempts to emerge as an alternative to the dollar for global transactions.
On to coal, Coal India is closing in on its target to produce 1 billion tons of coal in a year. Its production in the April to June quarter touched 223 million tonnes.
Elsewhere, the EV market is booming as well. At the midway point of this year, India had sold 721,971 units -- which is already 73% of India EV Inc’s record sales in CY2022. This report in Autocar India offers a good, granular overview of the market.
Electric two-wheeler sales are down – but that is mostly due to the scaling down of the FAME II subsidy from 40% to 15% and the resultant hiked prices of e-scooters and e-motorcycles.
India's first indigenously developed 700 MW nuclear power reactor at the Kakrapar Atomic Power Project in Gujarat started commercial operations on Friday.
Elsewhere, India’s Cheetah introduction is still in trouble. One got injured in a fight with others. One wonders if environmental stressors and proximity are making the cheetahs more aggressive.
So much for India. What happened elsewhere? Norway rocked the world after it found a massive underground deposit of high-grade phosphate. The deposit is big enough to satisfy world demand for fertilisers, solar panels and electric car batteries over the next 100 years, said the company exploiting the resource. Russia’s gas prices are collapsing, pushing the country deeper into crisis.
Finally, China’s rechargeable battery push – the country wants to add 3,000 GWh of capacity by 2030 – shows signs of ripening into a speculative frenzy. “There are fears of a boom-and-bust cycle in batteries as people without expertise chase state funding,” reported the FT. “In recent years, tens of thousands of companies have started developing electric vehicles and computer chips after the sectors were prioritised for funding by Beijing. The energy storage rush has the same hallmarks. In one example, China’s largest puréed food manufacturer Nanfang Black Sesame Group said in March that Jiangxi Xiaohei Xiaomi Food, a wholly owned subsidiary of the Shenzhen-listed company, would pivot its business from food to energy storage and invest Rmb3.5bn ($490mn) in building a lithium battery production base.”
In tandem, lithium producers warn global supplies may not meet the demand for electric vehicles.
The environmental battle to track this week
The International Maritime Organisation, the United Nations agency that regulates shipping, is trying to forge an agreement to dramatically cut shipping industry emissions.
Globally, the industry moves 11 billion tonnes of cargo each year and creates about 1 billion tonnes of greenhouse gasses, about the same amount as Germany or Japan. An ambitious proposal conceived and championed by Pacific Island nations including Solomon Islands and Marshall Islands — which has one of the world’s largest shipping fleets registered to its flag — would introduce a $100 per tonne levy on maritime emissions in order to make cleaner fuels cost-competitive with the dirtier heavy fuel oil that is the industry standard.
But The Age and The Sydney Morning Herald spoke to three sources present in closed preliminary discussions who said opposition to the proposal has hardened among a group of about 20 nations including China, Russia, Brazil, Saudi Arabia and Australia. This masthead has seen documentation that confirms their accounts.”
The Sydney Morning Herald has the story.
Geo-engineering, ahoy
The White House is considering proposals to cool the earth down by blocking sunlight, reported Politico.
“The 44-page document considers a few plausible ways to limit the amount of sunlight that hits Earth, all of which could have significant drawbacks. One method is to multiply the amount of aerosols in the stratosphere to reflect the sun’s rays away from the planet — a process that can occur naturally after a major volcanic eruption. Others include either increasing cloud cover over the oceans or reducing the amount of high-flying cirrus clouds, which reflect solar radiation back to Earth.
Pakistan’s crisis of climate, debt and political instability
In the country, a year has passed since the floods last summer. Rains are coming again. And the country is not ready.
“Now crop shortages linger, thousands remain homeless and the country is struggling with rebuilding, food supply, health care and debt. Relief aid has largely dried up. As new rains threaten the same areas hit by last year’s floods, Pakistan finds itself at the mercy of a pernicious pattern: Climate change is driving more intense rainfall, which drives more intense flooding, which stymies recovery from past floods.”
Without effective mechanisms to finance their recoveries, says this Bloomberg report, let alone prepare for future climate crises, developing nations are particularly unprepared for climate change. “Pakistan is an avatar for what happens when climate-vulnerable countries that are not climate-resilient are in the firing line of changed weather conditions,” says David Miliband, president of International Rescue Committee, a humanitarian aid group.
Also read: Pakistan's Precarious Path: From Hero Worship to Economic Desperation.
And, while on this point about using finance to build climate resilience, hear this Avinash Persaud interview on the Bridgetown Initiative.
Your non-climate must-read of the week
Climate Reads of the Week
1. Navigating the minefield of India’s potential carbon market (CarbonCopy)
2. EU’s carbon border tax: The start of a new trade war? (CarbonCopy)
3. Did UP economy do better under Akhilesh than Yogi? A data-check on state’s $1-trillion ambition (The Print)
4. Earth's Jet Streams Look as Chaotic as a Van Gogh Right Now, And That's a Big Problem (Science Alert)
5. The World Bank Group enabled the devastation of villages and helped a mining company justify the deaths of endangered chimps with a dubious offset. (Propublica)
6. India fumbles towards a carbon market (Reporters’ Collective)
7. The Atlantification of the Arctic Ocean Is Underway (Hakai)
8. Paris finance meet: Key takeaways from a summit that showed the scale of the challenge ahead. (Down To Earth)
9. State oil majors slide on net-zero (Business Standard)
Climate Book of the Week
A few weeks ago, we mentioned Jeff Goodell’s The Heat Will Kill You First: Life and Death on a Scorched Planet.
The book is out on the market now. Here is an interview where Goodell talks about heat – and his book. Here is a review of the book itself.