From Mines to Manufacturing: IEEFA Says Jharkhand Can Lead India’s Climate Goals with Strategic Low-Carbon Investments

Decarbonising Jharkhand’s coal-dependent economy and investing in low-carbon industries could yield significant long-term economic benefits that outweigh the high upfront transition costs, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).

The report, titled “Jharkhand’s Just Transition: A Roadmap for Economic Growth and Diversification,” was prepared by IEEFA South Asia for the state government’s Task Force on Sustainable Just Transition.

Massive Investment, Bigger Returns

The study estimates that Jharkhand will require US$256 billion (₹21.52 lakh crore) between 2026 and 2070 to phase out coal mines, decommission thermal power plants, remediate project sites, and decarbonise the steel sector.

Despite the substantial cost, IEEFA projects a net gain of ₹6.7 lakh crore (US$79.3 billion) for the state government by 2070, excluding any increase in central government tax revenues. This financial return would come through new industries, employment opportunities, and diversified revenue streams.

Co-author Shantanu Srivastava, IEEFA’s Research Lead for Sustainable Finance and Climate Risk, said the transition involves “phasing out carbon-intensive assets, building new low-carbon capacity, and mobilising unprecedented levels of capital.”

Strategic Opportunities for Low-Carbon Growth

Jharkhand’s strong industrial base, renewable energy potential, and reserves of critical minerals give it a unique advantage in building a low-carbon manufacturing hub. The report highlights future opportunities in:

• Electric vehicles (EV) and battery storage manufacturing
• Solar panel and green hydrogen production
• Natural farming and carbon market-linked livelihood programs

The report identifies that over ₹1.05 lakh crore (US$12.5 billion) will be needed for reskilling, compensation, and rehabilitation of coal-dependent workers and communities to ensure an equitable transition.

Role of Finance and Policy

IEEFA stresses that while government funds are essential, the bulk of transition financing must come from private investors, concessional multilateral loans, and blended finance mechanisms. A clear policy roadmap, strong governance, and regulatory stability will be key to attracting this capital.

“The transition will more than compensate for the state’s lost coal-based revenues and contribute materially towards economic growth,” Srivastava said.

Co-author Soni Tiwari, Energy Finance Analyst at IEEFA South Asia, added:
“This transition is both a high-risk challenge and a high-return opportunity. If Jharkhand acts now, it can safeguard its economy from coal decline and lead India’s low-carbon growth story.”