What Malaysia’s experience with Sustainable Palm Oil tells us about tropical deforestation — and CBAM.
Unlike India, which began evangelising oil palm to farmers about 20 years ago, Malaysia has been growing it for much longer. Photo: Riddhi Tandon
Can green trade barriers save the environment?
What Malaysia’s experience with Sustainable Palm Oil tells us about tropical deforestation — and CBAM.
Oil palm is hard to miss in Malaysia. Its plantations are visible along the highway between Kuala Lumpur International Airport and Kuala Lumpur itself. A few days later, when CarbonCopy travelled to the eastern province of Sabah in Borneo, oil palm was omnipresent there as well.
Flying over Sabah’s forested interior, we saw large geometric patches, each a much lighter shade of green than the surrounding forest, carved into what was once one of the biggest tropical jungles in the world. Those, too, are oil palm plantations.
The scene is similar elsewhere in Sabah, too, like the land abutting the Kinabatangan river. Other provinces, like Sarawak in Borneo and Kelantan and Pahang in peninsular Malaysia, are said to be no different.
Little here is a surprise. Unlike India, which began evangelising oil palm to farmers about 20 years ago, Malaysia has been growing it for much longer. First introduced to the country by the British, it began to be planted as a cash crop in the 1960s. Since then, as a conservationist in Kota Kinabalu, the capital of Sabah, told CarbonCopy, it has spread like wildfire. Oil palm plantations now occupy 17% of Malaysia’s area — and account for about 4% of the country’s GDP and a little over a fourth of its exports.
In recent years, however, a dark cloud has settled over the sector. Like India, thickly forested Borneo was logged intensively during colonialism. Thereafter, plantations for rubber — and then for oil Palm — came up on these deforested tracts.
After independence, as oil palm, cheaper than other oilseeds, found its way into biofuels, cooking oil markets, processed foods and cosmetics, these processes of deforestation and cash crop plantation continued, albeit under local elites. With that, like clear-felling of rainforests for cattle ranching and soy, oil palm’s growth, too, is decimating Malaysia’s rainforests and pushing indigenous communities and biodiversity, including Sumatran tigers and Orangutans, into extinction.
Some of this history has been coming back to haunt oil palm growers. A clutch of nations, whether motivated by their own oilseed growers or ecological concerns, are trying to rein in the sector — chiefly through trade barriers that will only let sustainable palm oil through.
Under the 2023 EU Deforestation Regulation (EUDR), anything not forest-friendly will lose access to the EU market with its large buyers like Unilever and Nestle. In tandem, to protect their businesses, oil palm growers, too, have rolled out initiatives like Roundtable on Sustainable Palm Oil (RSPO), which certify environmentally and socially responsible palm oil. Apart from RSPO, Malaysia and Indonesia, the two biggest growers and exporters of Palm Oil, have their own sustainability certifications — Malaysia Sustainable Palm Oil (MSPO) and Indonesia Sustainable Palm Oil (ISPO).
A large question lies here. Alongside timber trafficking and cattle ranching, cash crops like oil palm and soybean are the biggest reasons for the world’s tropical forest loss. And so, can such trade barriers help curb deforestation?
As this article will show, the short answer to that question is “No”. The reasons run deep – including the political clout of the oil palm industry; the limited scope of Sustainable Palm Oil drives; the poorer economics of Sustainable Palm Oil; the risk that un-sustainable palm oil will simply be sold to other countries; and so on.
A test-case for sustainability certifications
In its design, the sustainable oil palm push is similar to CBAM (Carbon Border Adjustment Mechanism, which taxes/blocks high-carbon exports to the European Union). It has consequently resulted in similar blowback from both Malaysia and Indonesia. The latter, for instance, has criticised Regulation on Deforestation-free Products (EUDR) as “regulatory imperialism,” saying the EU is “[building] walls” at a time Indonesia is trying to facilitate trade.
A yet larger question lies here. What does Malaysia’s response to sustainable oil palm tell us about trade-linked attempts to fight climate change? Do these work?
The old truism of an immovable body running into an unstoppable force comes to mind. On one hand, after China and India, the EU is the third-largest market for Malaysia and Indonesia. Any drop in exports to the EU would hurt both countries. On the other hand, the oil palm sector enjoys massive political clout in both countries.
In Malaysia, logging conglomerates like Samling Group and Rimbunan Hijau, both amongst the world’s biggest timber conglomerates, have moved into oil palm. “That is how this works,” Clare Rewcastle Brown, the editor of The Sarawak Report told CarbonCopy. “First you do logging. And then, you plant some cash crops like rubber or oil palm.”
As activist Lukas Straumann writes in Money Logging: On the trail of the Asian Timber Mafia, both firms started from Sarawak, Sabah’s sister-province in Borneo, and grew on the back of extensive logging. As this report in The Ecologist says, “In 2010, Sarawak accounted for 25% of tropical log exports, despite the fact that only 0.5% of the world’s tropical forests are in Sarawak.”
Both firms have subsequently diversified into oil palm. Rimbunan Hijau, started in 1976 in Sarawak, moved into oil palm in 1988, setting up its first plantation in the province that year. Samling, set up in 1963 in Sarawak as well, produces oil palm as well, chiefly through a subsidiary called Glenealy Plantations (Malaya) Berhad.
Both firms have political connections. Samling has been linked to Sarawak Chief Minister — and, thereafter, governor — Abdul Taib Mehmud. Rimbunan Hijau has political links as well. “The (Rimbunan Hijau) Group has been linked to both Taib Mahmud’s own political party, Persaka Bumiputera Bersatu (PBB) and its coalition partner Sarawak United Peoples Party (SUPP),” wrote The Sarawak Report. Similar links have also been suggested by a 2004 Greenpeace report. Other oil palm exporters in the country — like IOI Corporation and Gentings Plantations — have also attracted scrutiny over their political links.
These firms are not outliers. Last December, news portal Malaysiakini wrote about an oil palm plantation coming up near Pahang National Park in peninsular Malaysia. The firm running it (PASB, PKNP Agro Tech Sdn Bhd) was chaired by Pahang’s former head of government. It wasn’t the only one. “Checks found that of the 28 Pahang oil palm plantation projects that were approved by DOE (Department of Environment) from 2001 to 2023, most have political or royal affiliations,” it wrote.
This political economy, as CarbonCopy learnt, is a key determinant of how campaigns like sustainable oil palm and policies like EUDR work on the ground.
The big question about compliance
In 2019, given mounting concerns over deforestation, Malaysia’s federal government capped the expansion of oil palm plantations across the country. Not only did it ban conversion of natural forests to oil palm plantations from December 31, 2019, it also capped nationwide oil palm cultivation area at 6.5 million hectares and ordered plantations to comply with MSPO standards.
Provinces and oil palm growers, however, responded to these decisions in diverse ways. “Big palm oil companies working on land cleared a long time ago pushed for EUDR as they are already compliant,” Adam Farhan, the co-founder of Malaysian think-tank RimbaWatch told CarbonCopy. “These are also the firms already exporting to Europe.”
Other growers, however, expanded to new geographies like Papua New Guinea and began setting up fresh plantations in old-growth forests there. “These are firms with no intention of exporting to Europe,” said Farhan. “They are the ones exporting to China and India. India is buying a lot of palm oil from Papua New Guinea.”
One reason for this divergence lies in the economics of sustainable oil palm. A March 2025 study published in Nature found that sustainability pushes like RSPO have reduced efficiency at Malaysia’s oil palm plantations. In effect, the most competitive parts of the palm oil trade are the ones taking root on freshly deforested forests.
With that, the market for oil palm has split into two — one flowing to markets like Europe; the other, elsewhere. In the longer-term, as Nature warned, “The continued decrease in plantation production efficiency may push oil palm producers to outsource their production to non-certified third-party suppliers to make up for the long-term loss in plantation efficiency.”
Provinces diverged in their responses as well. “Malaysia’s moratorium on new oil palm without MSPO certification is an indirect ban on oil palm,” said Farhan. “But this is a federal level commitment and hard to track at a local level. We have environmental impact assessments still being approved for oil palm plantations in forests.”
This point about continuing deforestation also comes up in Malaysiakini’s report. Reporting on a plantation in the province of Pahang, it wrote: “Despite the government restriction, deforestation for the PKNP (more on this below PKNP Agro Tech Sdn Bhd (PASB)) plantation did not cease on Dec 31, 2019.” Satellite images, instead, showed that around 529 hectares of forestland had been cleared since the 2019 ban. “At this rate, more than 2,000 hectares of the remaining forest lands will be gone in a matter of years – the equivalent size of 3,737 football pitches,” it wrote. On the ground, as both provinces and Oil Palm growers respond to EUDR, RSPO and MSPO, reporters and activists like Farhan are seeing one more trend. “Firms are citing oil palm as the reason but just clearing the forest for timber and thereafter abandoning the land or planting other crops that are less contentious — like coconut,” said Farhan.
In Pahang, as Malaysiakini has reported, PASB (PKNP Agro Tech Sdn Berhad), a subsidiary of state-owned Perbadanan Kemajuan Negeri Pahang (PKNP), cleared the forest, but didn’t subsequently maintain the oil palm plantation. It wasn’t the only one. After proposing a plantation of 8,499 hectares, a firm called YP Olio, too, continued logging after MSPO’s forest clearing ban and then put up this land for sale.
And then, there are other land uses. Timber is one. Take Sarawak. “Unlike… oil palm, the Sarawak government appears committed to aggressively expand its timber plantations,” The Diplomat wrote in 2021, saying the province wanted one million hectares under industrial forest plantations. “Although it refers to these as “planted forests,” the process of establishing them involves clearing natural forest to make way for one particular type of tree, in many cases a non-native species,” it wrote.
According to RimbaWatch, nearly 1.5 million hectares of forests across Malaysia are at risk of being replaced with tree plantations. “That’s more than three times the size of planned oil palm concessions in the country,” wrote The Diplomat.
A clutch of other firms, CarbonCopy was told, are logging forests and sowing plantations in the hope of afforestation credits. More recently, growers have also begun embracing data centres. “Palm oil companies are earmarking some of the vast tracts of land they own for industrial parks studded with data centres and solar panels,” Bloomberg reported last month, adding: “A Maybank report in 2024 estimated profits from large-scale solar operations to be more than 50 times the average profit from palm oil cultivation.”
In other words, EUDR, RSPO and MSPO or not, deforestation is set to continue. In a dispiriting parallel with India, though, little of this deforestation is accepted by state forest cover numbers.
As with India, forest cover figures in Malaysia have seen little change over the past two decades even as the country’s GDP doubled. Sabah promised in 2020 to boost “totally protected areas” (forests) to 30% by 2025. As for Sarawak, it promised in 2018 to keep 80% of its land under primary and secondary forests. Even back in 2013, however, Global Witness had pegged pristine forest cover in Sarawak at below 5%. “They try to pretend over half of East Malaysia is still forested whereas NGOs say less than 5% is undamaged forest,” said Brown.
Hidden inside these trends is a larger critique of current pro-environment trade barriers.
Endgame
What does Malaysia’s experience with green trade barriers tell us?
Self-monitoring, as sectors like microfinance in India and carbon offset schemes elsewhere demonstrate time and again, doesn’t work. Apart from low visibility on whether the auditing and certifying firms are doing their job well, business pressures also result in a dilution of norms. While Malaysia’s deforestation cut-off date is December 2019, RSPO, however, allows deforestation after its cut-off date of November 2018 “as long as remedy and compensation procedures are applied”. “The cut-off year for deforestation is being constantly changed,” charged Brown.
That is just the start. As industry-led initiatives, RSPO and MSPO only oversee oil palm. This leaves other vectors of deforestation like logging, timber plantations and — now — data centres intact. For this reason, too, these schemes are a non-solution. They serve industry more than forests.
EUDR comes with its own questions. When a region — as opposed to all countries — adopts a green measure, what the world gets is a readjustment of trade flows. As this article gets written, sustainable palm oil is moving to Europe. Palm oil from Papua New Guinea and elsewhere, as Farhan said, is flowing to countries like China and India. As things stand, in the wake of EUDR, Malaysia struck a deal with China to double its palm oil exports. “Europe is by far the largest consumer of sustainable palm oil in the world, accounting for 45% of total global use of certified sustainable palm oil,” adds a RSPO report. “At the same time, the consumption of palm oil is increasing in other parts of the world where the market for sustainable palm oil products is still in its infancy.”
With that, all one gets is rolling deforestation. For this reason, EUDR is more effective as a trade barrier than an anti-deforestation measure. This criticism applies to CBAM as well. All it will do is direct green steel to Europe and carbon-heavy steel elsewhere. There, too, some firms will find competitive advantage in embracing CBAM, while others find benefits in turning to other markets. All of this underscores the need for multi-lateral action on planetary issues. Given regulatory capture, measures by individual countries won’t work. Nor will trade- or industry-imposed barriers. What the world has to do is get global arrangements like the International Tropical Timber Organisation (ITTO) working better.
A thick winter haze is settling over large parts of India, with the weather office issuing fog and cold wave alerts through December 14. Photo: Pixabay
Fog grips North India as cold wave spreads across central and southern states
A thick winter haze is settling over large parts of India, with the weather office issuing fog and cold wave alerts through December 14. Dense to very dense fog has disrupted early travel in Delhi, Noida and Ghaziabad, though temperatures in the capital remain slightly above the mid-December norm. The IMD has warned of very dense fog in Uttar Pradesh and varying fog conditions across Haryana, Punjab, Odisha and the Northeast until December 16. A cold wave is tightening its hold over Madhya Maharashtra, Marathwada, West Madhya Pradesh, Vidarbha, Chhattisgarh and Odisha, and is likely to extend into Telangana and North Interior Karnataka. A weak Western Disturbance may bring light rain or snow to the northern mountains from December 13.
Climate change intensified South and Southeast Asia floods, finds analysis
Climate change helped supercharge the November floods that killed more than 1,600 people across South and Southeast Asia, according to a rapid World Weather Attribution study. Three cyclones, including the powerful Ditwah and Senyar, unleashed torrential rain and over $20 billion in damage from Sri Lanka to Indonesia.
Warmer Indian Ocean waters — about 0.2°C above normal — likely strengthened the storms by providing extra heat and moisture. Researchers say the oceans would have been around 1°C cooler without human-driven warming. The disaster was magnified by monsoon timing, rapid urbanisation and deforestation, which funnelled extreme rainfall into catastrophic flooding.
2025 may become one of hottest years on record as 2023-2025 could cross 1.5°C threshold
Global warming has raced ahead since 2023, pushing 2025 toward becoming one of the hottest years ever recorded. Data from the Copernicus Climate Change Service shows temperatures from January to November sitting 1.48°C above the pre-industrial average, putting the 2023–2025 period on course to be the first three-year stretch above the 1.5°C mark. The spike has been steep: 2023 alone jumped 0.3°C over 2022, and 2024 became the first year to exceed 1.5°C for the full annual average. Scientists say the scale of warming since 2023 can’t be explained by El Niño or reduced pollution alone. Research now indicates the world may be entering a new climate era, with temperatures likely to stay above 1.5°C for decades without drastic emissions cuts.
1.3 million São Paulo residents still without power after severe winds topple trees, ground flights
Power outages gripped São Paulo, leaving over 1.3 million residents in the dark after winds of nearly 100 kmph brought down hundreds of trees and crippled the city’s grid. Utility Enel said it had restored electricity to more than half of affected customers, but around 300,000 people lost power again through the day. Crews are now rebuilding sections of the network entirely, with no timeline for full restoration.
The storm also triggered nearly 400 flight cancellations, mainly at Congonhas airport. City officials, who clashed with Enel over its slow response, reported 231 fallen trees. The outages have disrupted water supply, forced residents to work from cafés and malls, and fuelled public anger after repeated blackouts this year.
Amazon may be heading toward a “hypertropical” climate unseen for 10 million years
New research warned the Amazon rainforest is drifting toward a climate state so extreme it last existed in the Eocene and Miocene eras between 40 million and 10 million years ago. By 2100, the region could face up to 150 days a year of intense hot drought, even during the wet season, if emissions stay high, according to a study published in Nature.
Researchers found that during severe droughts, trees shut down water and CO₂ exchange, risking embolisms in their xylem and eventual death. Annual tree mortality could climb from just above 1% today to 1.55% by century’s end, reshaping the forest with slow-growing species more likely to survive.
The study suggested other tropical forests may be on the same trajectory, with major consequences for the global carbon cycle.
Mars plays a bigger role in Earth’s long-term climate than previously thought: Study
Earth’s ice ages and warm periods are shaped by slow shifts in its orbit and tilt, driven by gravitational nudges from other planets. Scientists already knew Jupiter and Venus were major players, but new modelling shows Mars also has a surprisingly strong hand in steering these climate rhythms.
Researchers tested what would happen if Mars had no mass, or up to ten times its current mass. The results were stark. One of Earth’s key long-term climate cycles — a 2.4-million-year rhythm seen in geological records — disappears entirely when Mars is removed. The red planet also helps shape the 100,000-year cycles linked to ice ages and even alters the familiar 41,000-year wobble in Earth’s tilt.
This indicates that Mars keeps parts of Earth’s climate system in tune. The finding also has implications for understanding climates on Earth-like exoplanets, where neighbouring planets could make or break long-term habitability.
The ministry took a similar view on global air-quality rankings from IQAir and the WHO. Photo: Canva
India says it won’t rely on global climate or pollution rankings to shape policies
India won’t use international rankings to shape its climate or pollution policy, the environment ministry told Parliament, distancing itself from reports that frequently place the country among the world’s most climate-vulnerable and polluted.
Asked about the latest Global Climate Risk Index — which ranked India ninth for extreme-weather impacts and reported over 80,000 deaths and nearly $170 billion in losses since 1995 — the ministry said it “does not recognise any external ranking” for domestic policymaking. It argued that isolating the climate component of economic losses remains a challenge.
The ministry took a similar view on global air-quality rankings from IQAir and the WHO, saying these are not official assessments and that countries set standards based on local geography and socio-economic conditions. India instead relies on its own monitoring and annual Swachh Vayu Survekshan to evaluate and reward city-level progress on clean air.
Germany extends €1.3 billion in concessional loans to India for climate and green urban projects
Germany will provide about €1.3 billion in concessional loans to India under their Green and Sustainable Development Partnership, following the latest round of government-to-government talks. The funding will support climate and energy projects, sustainable urban development, green mobility and natural resource management, alongside deeper cooperation on skills development in renewables.
Both countries agreed on a new slate of joint projects, with German officials calling the partnership unique in scale and ambition. Green mobility remains a major focus: Germany is backing metro expansion in Bengaluru through a €340 million KfW loan and supporting innovation projects like the city’s Living Lab, which includes India’s first rooftop solar-powered EV charging station using second-life batteries.
UN moves to raise $35 million for Sri Lanka as Cyclone Ditwah fallout deepens
The UN plans to mobilise $35 million over the next four years to support Sri Lanka after Cyclone Ditwah, saying the island cannot shoulder recovery costs while still burdened by its post-crisis debt collapse. The Humanitarian Priorities Plan launched this week focuses on immediate needs including food, education, health, protection, shelter and early recovery. The disaster has left at least 638 people dead and 193 missing, with nearly half a million children affected. UN officials warned that poverty and protection risks are worsening as shelters overflow. The initiative has received $9.5 million so far from partners such as Australia, Canada, the EU, Switzerland, the UK and the US, with another $26 million being sought.
US’ EPA removes references to human-caused climate change from its website
The EPA has edited and deleted sections of its website that explained how burning coal, oil and gas drives climate change, CNN reported. The shift aligns with the Trump administration’s push to expand fossil-fuel production and dismantle federal climate policy.
The agency’s “causes of climate change” page no longer mentions human activities directly, instead pointing to natural factors like volcanic activity and solar changes, while vaguely noting that recent warming “cannot be explained by natural causes alone.” A previous section quoting the IPCC’s conclusion that human influence is “unequivocal” has been removed. Key “climate indicators” pages used by teachers and researchers have also vanished.
BII commits £308 million to boost clean energy in South-East Asia
British International Investment (BII) will invest £308 million into climate and clean-energy projects across South-East Asia, as part of its plan to invest up to £500 million in the region by 2026. The funding is expected to enable 1.8 GW of new clean-energy capacity and avoid more than 1.6 million tonnes of emissions.
The region’s power systems remain dominated by coal and gas, even as governments set net-zero targets and face mounting climate risks. BII is investing through equity, debt and blended finance, backing platforms such as the SUSI Asia Energy Transition Fund and the SARA initiative, which is building a 500 MW pipeline.
Projects span rooftop solar in Indonesia, climate lending in Vietnam, and a joint facility supporting solar, hybrid and storage assets, including a 99 MW plant in the Philippines due in 2026.
there is no conclusive data to establish a direct correlation between deaths or diseases occurring exclusively due to air pollution. Photo: Wikimedia Commons
Govt Says No Conclusive Data Relating Deaths to Pollution
The central government during the Parliament session said there is no conclusive data to establish a direct correlation between deaths or diseases occurring exclusively due to air pollution. This position by the centre is in stark contrast to multiple studies highlighting India’s growing pollution-linked health burden, reported India Today.
A study by Lancet Planetary Health released last December estimated that long-term exposure to polluted air contributes to roughly 15 lakh additional deaths in India each year compared to WHO’s recommended safe-exposure limits.
This claim by the central government comes at a time when the national capital region and major Indian cities are choked because of the hazardous air quality. On December 14, the air quality slipped into the severe category with a reading of 459, as per The Hindu report.
CAQM Urges BS III Compliant and Earlier Vehicle Models Out of SC purview
The Commission for Air Quality Monitoring (CAQM) has asked the Supreme Court (SC) to keep the Bharat Standard (BS) III vehicles and earlier vehicles model out of August order, which paused coercive action against end-of-life vehicles (ELVs) to curb air pollution in Delhi, reported Indian Express.
BS III norms were implemented in 2010 in major cities where the government increased restrictions on gaseous emissions such as Nitrogen Oxides, Carbon monoxide, and Hydrocarbons. Moreover, it limited the sulphur content to no more than 100 ppm.
CAQM has also sought a review of SC’s 2016 order that raised the 1% environment protection charge on luxury diesel cars and sports utility vehicles with engine capacity of 1000 cc and above.
The Delhi government argued before the SC that a vehicle’s roadworthiness should be linked to its actual emissions as tested and recorded under the Motor Vehicles Act rather than imposing a blanket age-based ban.
NGT Questions Haryana Govt. and Pollution Board On Sewage in Delhi’s Drinking Water Drain
The National Green Tribunal seeks clarification from Haryana Government and Central Pollution Control Board (CPCB) over possible contamination of a key stormwater drain that supplies drinking water in Delhi, after being told that sewage from Haryana’s Diversion Drain Number 6(DD-6) is spilling into Diversion Drain Number 8(DD-8), reported Hindustan Times.
The issue is significant as DD-8 carries freshwater to Delhi, making any mixing of untreated waste a serious public and environmental hazard.
Punjab HC Seeks Affidavit from GMADA, State Pollution Board Over Delayed Amenities at Mohali’s Eco City
Punjab High Court seeks an affidavit from Greater Mohali Area Development Authority (GMADA) and other state agencies over multiple civic deficiencies in Eco City, a residential area in New Chandigarh, Mohali, reported Indian Express.
Mohali’s Eco city is facing multiple civic gaps in basic amenities, including the township’s sewage treatment plant (STP) capacity, lack of a garbage disposal system, overhead power lines, non-operational community facilities, and the emergence of a slum cluster along the riverbed near Mullanpur.
The bench sought clarity on the status of replies and compliance reports after counsel pointed out that a civil miscellaneous application, highlighting unresolved deficiencies, had been pending since December 4, 2024. Despite multiple status reports, several respondents had not filed substantive replies.
There will be an initial investment of ₹2,000 crore, with a greenshoe option of investing another ₹ 1,000 crore in the future. Photo: Canva
BlackRock plans to invest ₹3,000 crore in Aditya Birla Renewables
BlackRock, the world’s largest asset manager, has committed to investing ₹3,000 crore ($335 million) in Aditya Birla Renewables Ltd (ABREN), through the company Global Infrastructure Partners (GIP). According to The Hindu, there will be an initial investment of ₹2,000 crore, with a greenshoe option of investing another ₹ 1,000 crore in the future, in exchange for a minority stake.
With the influx of this ₹3,000 crore, the enterprise value of ABREN will turn into a sizable ₹14,600. Till now, ABREN has installed renewable energy capacity across 10 states in India, amounting to 4.3 GW. This includes solar, hybrid, floating solar, and round-the-clock renewable power.
India considers import duty cut for high-grade steel needed in wind sector
In a boost for the wind energy sector, the Indian government is mulling over reducing the 15% import duty on the high-grade steel needed to manufacture gearboxes for wind turbines, reported Mint. The ministry of new and renewable energy has recommended the tax cut to be taken up during the upcoming Union Budget.
The current import duty on gearboxes is 7.5%, which makes it cheaper to import than manufacture domestically. So, this move will localise the manufacturing of components that go into making wind turbines. This is in line with correcting inverted duty structures to boost local manufacturing, and a mandate to cut reliance on foreign component suppliers.
Power Ministry revokes connections of 24 RE developers due to delays
The Ministry of Power has revoked the connectivity for 24 renewable project developers since 2022 due to developer-side delays. According to Solar Quarter, the Ministry said that developers could not meet project milestones, including land documentation, financial closure, and commissioning deadlines. This was clarified in a written response by the Union Minister of State for Power, Shri Shripad Yesso Naik, to the Rajya Sabha.
Incidentally, 16 of these developers have gone to the Central Electricity Regulatory Commission (CERC) seeking protection against the revocation orders. As a result, there could be legal and operational issues in the foreseeable future.
The Ministry’s move is in line with the country’s compliance efforts to achieve 500 GW non-fossil fuel generation capacity by 2030. Currently, 259 GW of non-fossil energy capacity has already been integrated into the national grid.
RE can cost as less as new coal by 2030: Study
It is possible for India to have reliable, round-the-clock, clean power at costs competitive with new thermal plants by 2030, according to the findings of a report published by the International Institute for Sustainable Development (IISD) and the Center for Study of Science, Technology and Policy.
Titled ‘Budgeting for Net Zero: Powering India’s Reliable Clean Energy Future’, the study found that this hinges on two factors: the ability to monetise a portion of surplus electricity generated by oversized renewable sources as well as additional storage capacity. Firm and Dispatchable Renewable Energy (FDRE) — which is already cheaper than new coal considering its associated social costs —includes hybrid projects combining solar, wind, and battery storage.
The study found that FDRE projects install slightly more renewable and storage capacity than required for their contracted supply. Selling this surplus power plays a critical role in lowering overall costs.
No advisory to cease funding for RE projects: Govt
The Ministry of New and Renewable Energy clarified that it had not issued any advisory to pause or halt new financing for the sector, after it emerged that the Ministry had reportedly urged lenders to proceed slowly in financing new solar module plants, as supply had exceeded demand.
The Hindu reported that a lot of solar manufacturers got concerned as they felt that this move could choke financing for the entire sector. The Finance Ministry had been asked to advise lenders to adopt a “calibrated and well-informed approach” when evaluating proposals for additional standalone solar photovoltaic module capacity, citing oversupply risks.
American e-commerce giant Amazon has decided to pump in $35 billion into its India operations, with most of it being focused on AI. Photo: Wikimedia Commons
American tech companies to invest billions to build AI infra in India
American e-commerce giant Amazon has decided to pump in $35 billion into its India operations, with most of it being focused on AI. With the entirety of the investment to be fulfilled by 2030, this will add to the $40 billion already invested in the country, reported Times of India. This was announced just a day after another tech giant Microsoft announced an investment of $17.5 billion in India, most of which would again be geared towards building data centers and scaling up AI capacities.
Vingroup to expand Indian footprint with investment of $3 billion in Telangana
Vingroup, the largest conglomerate of Vietnam, has plans to expand its footprint in India after signing a memorandum of understanding (MoU) with the Telangana state government for establishing a multi-sector ecosystem. The investment will be around $3 billion. This follows the setting up of a vehicle manufacturing facility in Tamil Nadu, under its electric vehicle subsidiary VinFast.
Vingroup’s proposed project in Telangana will include smart urban development, electric mobility, healthcare, education, tourism and renewable energy. The land needed for it is roughly 2,500 hectares, reported Reuters. The state government will make land acquisition, coordination, and planning easier so that the project happens fast.
Concerns raised about economic viability of battery energy storage systems in India
India saw dismally low bids for building battery energy storage systems. According to the India Energy Storage Alliance (IESA), the country has tendered out 83 GWh of battery storage capacity since 2021, but that should spike up to 236 GWh by 2032. This has raised concerns that battery storage projects can be economically unviable and pose safety risks, according to a report by Reuters.
It is crucial that battery projects are undertaken if India has to meet its goal of 500 GW of renewable energy by 2030. Currently, 36 GWh of projects have been awarded and 15.4 GWh are in the open tender stage, according to the IESA. 18 GWh are being built, while 8 GWh of projects have been cancelled.
EU postpones auto sector and CBAM proposals
The EU is most likely going to delay the release of its auto sector reforms as well as widen its CBAM tariff to include washing machines and other products, according to Reuters. Both policies were supposed to be released on December 10, but have now been pushed to December 16. This speculation is backed by the fact that the EU has delayed the release of the auto sector proposals by a week. There is a possibility that it can be delayed till 2026 as well.
This delay will most likely weaken the EU’s 2035 ban on new internal combustion cars. It will be applauded by automakers and countries like Germany and Italy, which have a strong auto manufacturing base. However, this could potentially weaken the EU’s climate policy, and delay its net zero targets.
EU’s auto sector proposal delay can weaken its 2035 ban on ICE cars
The postponing of the release of auto sector proposals in the EU has made EV makers worried. Reuters reported that the automotive package to be released on December 16 can dilute the EU’s resolve to ban new combustion engine cars from 2035 onwards.
While almost 200 EV manufacturers across the continent signed an open letter to President Ursula von der Leyen, urging the EU to stick to the 2035 ban, lobbying by the traditional auto sector including German automakers and the European Automobile Manufacturers’ Association can delay the ban.
Campaign groups E-Mobility Europe and ChargeUp Europe are concerned that bringing back technologies like plug-in hybrids and CO2-neutral fuels will delay the shift to electric vehicles, giving the competitive edge to Chinese EV makers.
India is planning to extend the coal power capacity and potentially building new plants until 2047. Photo: Canva
India to Expand Coal Power Capacity Until 2047 to Ensure Grid Stability and Energy Security
India is planning to extend the coal power capacity and potentially building new plants until 2047, reported Bloomberg. It added that the proposal marked a major shift from current projections that see net additions peaking by 2035.
However, another report said that India is not planning to build new coal power plants beyond 2035. Pankaj Agarwal said that India wants to secure its energy requirements and as of 2035, India wants to have 307 GW. Currently, India is facing grid challenges due to integration of surplus clean energy into the grid and has curbed power output for most of the months.
Trump to Unlock Frozen Russian Funds and Restore Oil Flows to Europe
US President Donald Trump’s plan for restoring peace in Ukraine includes proposals to restore Russian energy flow into Europe and major investment in rare earths and energy and unlock frozen Russian funds held in Europe, as per Wall Street Journal.
The report suggests that US companies would invest in Russian strategic sectors like rare-earth extraction and Arctic oil drilling. This investment would, in turn, restore Russian energy flows to Western Europe and the global market.
Major Indian Refiners Resume Buying Discounted Russian Oil as Prices Fall
Four Major Refiners including state-run Indian Oil Corporation (IOL) and Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL), and Nayara Energy are buying Russian oil again as prices fall to draw buyers, reported ET Energyworld.
However, Reliance Industries abstained from buying the Russian crude linked to Roseneft PJSC due to the risk of breaching US or European sanctions.
Vedanta to Invest ₹1 lakh crore in Rajasthan to Double the Production Across Verticles
Anil Agarwal led Vedanta Ltd. announced that it will invest ₹1 lakh crore in Rajasthan to double its production across zinc, lead, silver, oil and gas, and renewable energy, reported ET Energyworld.
The company will set up a zinc park in the state to strengthen small and medium zinc manufacturing industries in the state. The Zinc International Industrial Park will provide electricity, water, raw materials, and infrastructure, to give a boost to MSMEs and downstream sectors.
Poisonous Gas Leak from Mines in Jharkhand, 2 Dead and 1000s evacuated
Carbon Monoxide leaked from underground mines in Dhanbad, which led to the death of 2 people so far and 1000s of residents evacuated from the site, reported India TV news. Officials said that CO levels in the air went up to a dangerously high level at up to 1,500 parts per million (PPM).
The Bharat Coking Coal Company (BCCL) has set up a tent city for the affected people. According to the recent reports, BCCL will drill holes in the area to inject nitrogen gas and other chemicals to neutralise the toxic nature of gas emanating from underground.