For Namibia, green hydrogen could be transformative.
With vast sunbaked, windswept deserts and 2.5 million people, the southern African nation has plenty of renewable resources to go around.
Meanwhile rich, densely populated Europe, South Korea and Japan are crying out for clean fuel to decarbonise hard-to-electrify sectors like fertilisers, steel and shipping. Their net zero plans depend on it.
Keen to secure pole position in the global race for green hydrogen, last year the EU began reaching agreements with prospective producers. One of the most trumpeted deals was signed with Namibia on the sidelines of Cop27 in Sharm el-Sheikh, Egypt.
“We want to fight climate change. We want to have clean energy. And as I said, you have all the resources in abundance. So let us team up,” European Commission President Ursula von der Leyen said in the direction of her Namibian counterpart, hailing the partnership as a “big win-win situation for all of us”.
Tapping into solar and wind energy for export is central to President Hage Geingob’s economic strategy. Namibia is seeking $20 billion of investment in green hydrogen – more than its entire GDP of $12 billion in 2022. Government authorities are negotiating funding options with the EU.
As with any heavy industry, though, the hoped-for boom will come at a cost to local communities and ecosystems. The benefits to ordinary Namibians are less certain.
Namibia is planning a series of projects to catapult the country into becoming a major green hydrogen exporter. (Credit: Fanis Kollias/Spoovio)
In a months-long investigation, Climate Home News and Oxpeckers visited the site of the flagship project, a $10 billion complex near the southern coastal town of Lüderitz.
The reporter on the ground found a community largely in the dark about the development and nervous about the impact on fishing and tourism. Experts shared frustration at the secretive tender process, scepticism about job prospects for Namibians and concerns for the area’s unique wildlife.
The green hydrogen complex
Perched between the Namib desert and the Atlantic Ocean, Lüderitz is named after a German colonist. It was the centre of a diamond rush in 20th century and of a colonial history that repressed indigenous Africans. Germany officially apologised in 2021 for colonial-era atrocities, recognising them as “genocide”.
Today, its Art Nouveau architecture, fresh seafood and wildlife draws a modest number of tourists, who can visit ghost towns abandoned after the diamond rush. The town is surrounded by the Tsau//Khaeb National Park, home to seals, penguins, flamingoes and ostriches. The park and surrounding lands are off-limits to residents to prevent illegal diamond mining.
Green hydrogen is set to to transform the character of this small enclave once again.
Hyphen’s plans show an initial 5GW of wind turbines and solar panels to supply power, according to the project’s factsheet published by the Namibian government. In this arid region, a desalination plant is needed to supply fresh water. An electrolysis plant will split the water into hydrogen and oxygen, before the hydrogen gas is converted into liquid ammonia. A new deepwater port will accommodate tankers to ship the end product around the world. The company aims to produce 300,000 tons of ammonia a year, commissioning the first phase by 2026, Hyphen’s website says.
To build all this, Hyphen expects to bring in 15,000 workers, roughly doubling Lüderitz’s population. Lüderitz Town Council is planning a new town in the desert to house the influx, immediately south of the historic Kolmanskuppe ghost town.
An opaque tender process
“We were a little surprised at the government’s choice of a partner,” said Phil Balhao, an opposition party member of the Lüderitz Town Council.
Other bidders like South Africa’s Sasol and Australian Fortescue Future Industries had an “established track record” that “seemingly just got ignored”, he said.
The tender process was overseen by the Namibia Investments Development & Promotions Board (NIDPB), which sits in the president’s office. In September 2020, the board appointed James Mnyupe as green hydrogen commissioner. It launched the first call for proposals in early 2021.
In a televised speech, Mnyupe said the tender was exempt from public procurement rules. Instead, he cited tourism and conservation laws as the basis to hold a closed selection process.
Graham Hopwood, director of the Institute of Public Policy Research, a public-interest think-tank based in Windhoek, was not impressed.
“With such a major and strategic project, there needs to be transparency and accountability from the outset. The fact that this project is mired in secrecy is raising red flags,” he said.
The Namibian government published a list of six bidders, who submitted nine bids between them. However, the content of the bids was not made public, nor the reasoning for Hyphen’s selection.
Hyphen said this was standard practice, given the commercially sensitive data contained in the bids. They added the process was “competitive”.
“It would be irresponsible and to the detriment to the development of the Hyphen project and Namibia’s broader green hydrogen industry for it to publish commercially sensitive agreements in the public domain that competitor projects/countries could use to compete against Namibia,” Hyphen said in a statement.
The Namibian government said the tender was “conducted with the utmost transparency and fairness”.
They said that the three-person bid evaluation committee did a “detailed and comprehensive evaluation” of the proposals, supported by independent experts from the US government’s national renewable energy laboratory and the EU’s technical assistance facility on sustainable energy.
Who is Hyphen?
Hyphen is a joint venture between two companies – Enertrag and Nicholas Holdings Limited.
Enertrag, owned by a 59-year-old East German nuclear physicist called Jörg Müller has a long track record of building renewables. It is pursuing green hydrogen projects across the world in Uruguay, Vietnam and South Africa.
Nicholas Holdings Limited is a company registered in the British Virgin Islands, which owns its stake in Hyphen through a special purpose vehicle based in Mauritius. The ultimate owner of the company is a South African investor called Brian Myerson.
The CEO of Hyphen is South African businessman Marco Raffinetti.
Myerson is a South African who spent decades as an investor in the UK, where he made headlines for battling the business establishment.
In 2010, Myerson was found by a panel of top UK lawyers to have behaved dishonestly in averting a takeover of Principle Capital, the investment firm he co-founded.
The Takeover Appeal Board found that Myerson and co-conspirators made a “deliberate attempt to circumvent” rules around taking over companies and then attempted to cover up their rule-breaking when the authorities began to investigate. He was banned from getting involved in mergers for three years.
Dishing out the punishment, the panel said it was only the second time it had done so, which it said, “is some indication of the extreme nature of the sanction”.
A spokesperson for Hyphen, Enertrag and Nichols Holdings Limited described this incident as a “historic matter” over “an alleged technical infringement” which “remains contested”. It should not be used to draw conclusions about Myerson’s character, they argued.
They added that the Takeover Appeal Board had no formal regulatory powers and UK financial regulators took no action in respect of the alleged breach of the rules.
A spokesperson for the Namibian government said it these were “historical legal matters, that to best of our knowledge have since been resolved”.
Myerson’s previous ventures on the African continent include a failed bid to scale up bioethanol production in Mozambique. Like today’s green hydrogen push, this was driven by EU demand: in 2007, the bloc set a to blend a percentage of biofuels into petrol. Investors piled into Mozambique, touting it as a “biofuels superpower”.
Myerson set up Principle Energy, based on the Isle of Man. It made bold promises to plant sugarcane over 20,000 hectares of land, build one of the top production facilities in the world and employ 1,600 people. Then the global bioethanol market collapsed and by 2013 the company closed, having planted just 136 hectares, according to a report by GRAIN.
His involvement in Hyphen is likely to be of concern, said IPPR’s Hopwood, adding Hyphen’s leadership was “questionable”.
Use of tax havens
Myerson’s investment in Hyphen is structured through the British Virgin Islands and Mauritius. Both rank poorly in the Tax Justice Network’s financial secrecy and corporate tax haven indexes.
Raffinetti said that Mauritius and the British Virgin Islands were “tax neutral jurisdictions with efficient financial markets”. A lot of infrastructure investment in Africa goes through Mauritius, he said, and investors are subject to tax in the countries where they are registered.
Tax Justice Network analyst Bob Michel said that investment into Africa goes through Mauritius because of its tax rules. “Mauritius is a corporate tax haven,” he said.
“(Mauritius’) domestic tax regime combined with its vast tax treaty network allow third country investors to use it to siphon profits from operations in Africa with the least of taxes paid in the countries where the operations take place,” Michel said by email.
Namibia is one of many African nations to have signed a tax treaty with Mauritius, which seeks to stop investors based in Mauritius being taxed both there and in Namibia.
Michel said that, with this treaty in place, routing investment through Mauritius “restricts Namibia’s rights to levy tax on the profits derived from the new project.”
A spokesperson for the Namibian government said it was “aware of the jurisdictions through which certain Hyphen shareholders hold their equity in Hyphen”.
The spokesperson added: “Should [the Namibian government] come across any conduct that is unbecoming of its laws and global best practice, rest assured [we] will take the necessary swift corrective action.”
Great expectations
Raffinetti, Hyphen’s CEO, previously developed gas power and rooftop solar bids in South Africa. The Richard Bay gas project he co-led is facing legal challenge by environmental activists due to its climate impact.
Wearing glasses and a black turtleneck, Raffinetti joined a video call with Climate Home in late October. He warned interviewers the internet might cut out due to the power cuts his native South Africa is plagued with.
The interview was granted, through a PR agency, on condition Hyphen could vet the quotes used. Some of the more colloquial soundbites reporters transcribed came back replaced with cautious jargon, and an admonition to put everything in its full context. Hyphen separately responded in writing to detailed concerns raised by sources.
“There’s an enormous amount of expectation in Namibia around this project. So there’s a huge amount of media attention,” Raffinetti said in one approved quote. “As the first large-scale project in Namibia’s green industrialisation strategy, we have an enormous obligation to get it right.”
Biodiversity concerns
Dr Jean-Paul Roux, a retired marine biologist working in the area for decades, pointed to where the Luderitz peninsula ends at Angra Point. It is the northernmost tip of the Karoo ecosystem, he explained, unique to southern Africa.
In the dry summer season, the desert landscape looks drab and lifeless. Winter rains bring a green explosion of rare plants such as the endemic Lithops optica, a tiny succulent that gets as old as 90 years.
“Here you can find up to 1,000 different plant species in just one square kilometre, some so small no bulldozer operator will even notice them,” he said. He spots signs of hyenas and porcupines.
This is the area earmarked for the deepwater port, desalination and ammonia plants.
Roux said the development would have a massive impact on Shearwater Bay and the adjacent Sturmvogelbucht, a lagoon teeming with flamingos and a heavy-sided dolphin population that he has been studying for years and visits every day.
“This is the only place along the southern African coast where you can watch them from your car,” he said as this smallest of all dolphin species approached to within a few meters of the beach. He fears that once developers start blasting rock for the port construction, dolphins will leave and never return.
The Tsau//Khaeb National Park is classified by Namibia’s Ministry of Environment and Tourism as a biodiversity hotspot. (Credit: Fanis Kollias/Spoovio)
Dr Antje Burke, a veteran botanist, is working as a consultant to Hyphen. She said at a conference of the Namibian Scientific Society in July that Hyphen was trying to avoid the most sensitive areas, but “one big problem” is that a species of parsley “overlaps almost completely with the concession area”.
She added that “even more concerning” was the future development plans. “The Hyphen project is developing the service infrastructure really keeping the future developments in mind… That means the entire area will be developed.”
Burke indicated some adjustments that could mitigate the environmental impact.
“No green energy project can be implemented without some environmental impact and Hyphen’s objective is to minimise environmental impacts to the largest extent possible,” Hyphen CEO Marco Raffinetti said in an interview with Climate Home.
The company has hired consultancy SLR to prepare an environmental and social impact report and lead a “comprehensive stakeholder engagement process”, Hyphen added in a written statement.
Consultants are currently gathering meteorological data and reporting a baseline of wildlife and plants in the area, SLR reports say. The formal environmental impact study is expected to start next year, the official documents add.
A group of Flamingoes at a lagoon within the Tsau//Khaeb National Park in Namibia, where green hydrogen developments are meant to ship the gas to the EU. (Photo: John Grobler)
Loss of access
Aside from the northern end of the bay, the peninsula is the only publicly accessible area of the Lüderitz region. The rest is Sperrgebiet or “forbidden area” – a legacy of the diamond rush.
Some of Hyphen’s infrastructure will reduce public access to the peninsula. Hyphen’s Raffinetti said this was “unavoidable” as it was “the only location feasible for a deepwater port”.
The other access to the sea is the four-kilometre Agate Beach to the north of the enclave, downwind from the last few local fishing factories and an overflowing municipal sewage plant.
Residents fear this would impact lobster fishing and rock angling. Crayfish fisheries, one of the area’s tourism attractions and an informal source of income would also be affected, locals said.
“The people in the township’s poorest areas [have] got nowhere else to go. They are going to strip this bay [Agate beach] clean of everything,” said Gerd Kessler, a fourth-generation Buchter as locals call themselves, referring to a potential concentration of fisheries in the area.
As owner of Five Roses Aquaculture and three smaller oyster-breeding operations, Kessler employs 100 people.
Felsenkirche, a Lutheran church built in 1912 in Lüderitz. (Photo: SkyPixels/Wikimedia Commons)
A massive new seawall and harbour at Angra Point could have unpredictable impacts on currents in the bay, he cautioned. When the existing shallow port was expanded in the late 1960s by filling in the channel between the town and Shark Island, the sea quickly stripped away the town’s little beach inside Robert Harbour.
Kessler’s biggest concern was how Hyphen planned to dispose of the brine from their desalination plant. “You can’t just dump that anywhere, you have to make sure you use the currents to disperse it,” Kessler said.
Questionable job prospects
Hyphen expects to create 15,000 jobs in the construction phase and 3,000 to operate the finished complex. It is aiming for 90% of these jobs to go to Namibians, and 30% to youth.
There is a huge skills gap, Namibian business groups warned.
“We do not even have a category for petrochemical or petroleum engineers at the moment,” said Sophia Tekie, chairperson of the Engineering Council of Namibia (ECN). “If we have any, they are registered as [one of 40] chemical engineers.”
“Although the ECN has 2,015 registered engineers in eight disciplines at present, about 30 to 40% of them were already retired and only did part-time consultancy work,” said her predecessor, Markus von Jeney.
Local construction capacity did not look much better: according to Bärbel Kircher, director of the Construction Industry Federation (CIF), their membership had declined from 480 companies in 2015 to 240 member companies, operating at only 50% capacity, she said.
“Currently, our local contractors are largely displaced by foreign contractors, excluding them from opportunities. This is often due to conditions set by external financiers,” said Kircher.
In the past, the country has struggled to complete large projects due to corruption charges.
Since 2013, the Namibian Ports Authority, the National Petroleum Corporation of Namibia and the Ministry of Agriculture have borrowed over N$21 billion (about US$400 million each, mostly from the African Development Bank) for infrastructure projects, including the 3MW Neckartal dam.
The Namibian High Court declared the dam was commissioned in 2008 under corrupted circumstances. The project was eventually completed at three times the original price in 2017.
Namibian construction companies were not likely to benefit from the green hydrogen projects, the CiF said. “The current procurement methods and trends do not provide a promising outlook for the future,” said Kirchner.
Hyphen said the company would implement “targeted training interventions at various levels” including “specialized Masters’ programs, internships and apprenticeships”.
The Karoo ecosystem is unique to Southern Africa. The Tsau//Khaeb National Park is a biodiversity hotspot hosting a part of this ecosystem. (Photo: John Grobler)
European support
Under the memorandum of understanding signed in Sharm el-Sheikh, the EU will provide technical expertise, trade incentives and, crucially, help to secure infrastructure finance.
Moments after von der Leyen and Geingob inked their deal, the European Investment Bank promised loans of up to €500 million ($528m) for renewable hydrogen investments in Namibia. “Let’s bring flesh to the bone,” the bank’s chief Werner Hoyer told the audience.
Shortly after the event, Hyphen announced that it had “signed a €35 million agreement with the European Investment Bank to finance the early development of our project”. This was somewhat premature. The bank had supplied a letter of intent, not a firm commitment of funding.
Since the initial announcement, European institutions, Namibian government officials and private actors have been working out the details of the partnership.
Hyphen is looking for €100 million to start work on the project.
“We have been very grateful to the EIB and the European Commission for making available the initial funding to share the early development risk,” said Raffinetti in late September, suggesting a firm commitment from the European backers.
The Hyphen CEO went on to outline what the deal with the EIB should look like: a €10 million ($10.5 million) grant – “still to be finalised,” he added – and a €25 million ($26.4 million) “soft loan”, meaning it would come with favourable terms for the company.
An EIB spokesperson said no agreement has been signed yet. “We are in the process of completing our due diligence, after which the project will be presented to the EIB’s governing bodies for approval,” they said.
“Potential financial support at this early stage would be for site studies and feasibility studies. Any support for implementation will be conditional to the project complying with the Bank’s environmental and social (E&S), procurement, compliance and other standards,” they added.
Namibia’s president Hage Geingob, EIB president Werner Hoyer, Belgian prime minister Alexander de Croco and EU president Ursula von der Leyen announcing the EU green hydrogen partnership with Namibia at Cop27. (Photo: EIB)
On top of the cash injection, the EU’s international partnership division could provide a first-loss guarantee. If the project does not go to plan and the borrower cannot pay back its debt, the EU will pick up the tab – or at least part of it.
Without the “bedrock” of public money it would be impossible to lure in commercial lenders and leave a huge funding gap, Raffinetti said.
A European Commission spokesperson told Climate Home that “at present, there is not yet any financial assistance under the EU budget mobilised in favour of the Hyphen project”.
The Netherlands is also supporting the project. Dutch companies like the Port of Rotterdam and gas pipeline operator Gasunie see a business opportunity to offload the green ammonia from ships and pipe it to industry inland.
In June, green hydrogen commissioner Mnyupe told a national newspaper that the Dutch government had given Namibia a €40m grant to develop green hydrogen. He said the government would use €23m of this to buy a stake in Hyphen.
The Dutch said the money was not Namibia’s to spend. The €40m grant comes from Invest International, a public fund set up in 2019 to advance Dutch interests abroad and promote economic growth in the developing world.
Invest International’s lead on hydrogen Bart De Smet told Climate Home that the €40m grant will be distributed by a fund manager independent of the Namibian government and won’t necessarily go to Hyphen.
Who benefits?
The big question for Namibians is whether the inevitable disturbance of a unique ecosystem and small-town culture will be worth it.
The Namibian government is taking a 24% stake in Hyphen through its sovereign wealth fund. It is expected to raise further revenues through taxes, royalties, land rental and environmental levies on the project, Hyphen said.
“The benefit for the country in terms of economic upliftment is enormous. Because Namibia is only 2.5 million people. So if you’re successful, your impact on each human being’s life can be enormous,” Raffinetti said.
Patrick Neib, an unemployed resident of the Nautilus township behind Luderitz, could certainly use some upliftment. He moved to the area in 2015 in search of a better job that has yet to materialise.
Like many residents, he found out about Hyphen from social media. Most of Hyphen’s public meetings took place in Keetmanshoop, the regional capital 350 km away.
The secrecy and technical jargon used by Hyphen and its consultants made it impossible for the ordinary layman to understand or access any opportunities, Neib said.
“There is just no public discussion about the benefits for ordinary people like me, or what price we are to pay for green hydrogen development,” he said. “My question is, who or what is really behind all of this?”
This story was reported in collaboration with Oxpeckers Investigative Journalism Centre and was supported by a grant from JournalismFund.
The post Shades of green hydrogen: EU demand set to transform Namibia appeared first on Climate Home News.
Shades of green hydrogen: EU demand set to transform Namibia
What happens when a love of marine life meets a playful imagination?
Sydney artist, illustrator and children’s author Sha’an d’Anthes, better known as Furry Little Peach, has teamed up with Greenpeace to create Happy Ocean Happy Planet: a joyful celebration of the extraordinary creatures that call our oceans home.
Sha’an felt inspired to create an illustration celebrating the beauty and resilience of marine life. Its hopeful message, A Happy Ocean is a Happy Planet, sparked a special collaboration with Greenpeace and a limited-edition t-shirt designed to help protect the oceans that inspired it.
The exclusive Furry Little Peach tee is available as a gift to new regular Greenpeace donors who give $30 or more and make at least three donations. By becoming a regular giver, you’ll help Greenpeace campaign for ocean protection.
ARTIST INTERVIEW: Sha’an d’Anthes (Furry Little Peach)
Sha’an shares the story behind the artwork, the local marine creatures featured in the design and why hope can be such a powerful force for action.
Hi Sha’an! Can you tell us a little about yourself and what you do?
My name is Sha’an d’Anthes, I also go by the pseudonym Furry Little Peach and I’m an illustrator, artist and children’s author based in Sydney, Australia. I love creating joyful, vibrant and nostalgic art that looks at the world through the lens of childlike wonder.
What do you love about drawing animals and nature?
I love all of the different shapes, colour and narrative you get to explore when drawing animals and nature. I’m also a city-slicker these days, and so I think that my work is a sort of escapism (for myself and hopefully for my audience).
How did the Greenpeace collaboration come about?
I went to the premiere of David Attenborough’s documentary Ocean, and felt compelled to create something to share the message of the film. This t-shirt is actually based off of that illustration including the tagline in I included when I shared it “A Happy Ocean is a Happy Planet”. I’m so grateful Greenpeace approached me for the project – it was a blast.
Where did you start when creating the Happy Ocean Happy Planet design?
The Happy Ocean tee starts the same as all of my work – with a brainstorm/braindump and really loose concept sketches.
How did you choose the animals for the illustration?
I actually asked Greenpeace to help me with the research of local marine life and they were so accommodating. They very quickly delivered me a huge list of local species of fish, mammals and coral and I just went through and looked up each creature and curated a little group of sea life that I thought would look sweet together – a mix of sizes, types, colours, textures and shapes.
What did you use to create the artwork?
So much of my work is traditional, but when it comes to things like t-shirts I always use digital drawing programs because I like to draw each colour in a separate layer which requires me to jump in and out of layers because it allows me to control colour and printing. When working digitally I always sketch in Procreate (an Australian digital art app), and then with this project I created final art in Adobe Fresco because it called for a vector graphic (an image that can be blown up to any size).
Do you have a favourite creature in the design?
I love painting Humpback Whales and always have, but I also have a soft spot for the sweet little Jelly Blubber jellyfish.
What did you want people to feel when they saw the artwork?
I specifically wanted to focus on the outcome that all of us want to see – a happy, thriving ocean where creatures are given the time and space to balance themselves. I feel that even when tackling tough subjects, leaning into hope is my natural inclination. As long as we have hope that things can be better, we will continue to take action.
What was the most fun part of creating it?
I actually documented the entire process of this project in a studio vlog on YouTube – and you can see how much fun I’m having doing final art jumping between layers and building the image. I had just come off completing final art for two books which are multi-year long projects, so being able to do a project that from start to finish in just a few days was really freeing at the time.
What does a “happy ocean” mean to you?
An ocean that given the time and space to repair and balance itself. Something I really took away from David Attenborough’s Ocean is that ocean ecosystems are actually really good at repairing themselves if we just let them do their thing.
How can people get their hands on the t-shirt?
The shirt is a reward for regular givers to Greenpeace – those who commit to at least 3 months of donations will receive the tee as a gift. Read about how at http://act.gp/flp-tee
How is Greenpeace helping to make our oceans happier places?
They have a deep focus on the health and happiness of our oceans through advocating for the set up of marine sanctuaries, holding big ocean polluters to account and calling for a ban on deep sea mining.
What are you working on next?
I will be jumping headfirst into Peachtober – an annual daily art challenge I run each year in October, if there are any artists reading this it’s a great time so please come join! In terms of publications my next picture book The Late Bird will be out in February 2027 (published by Harper Collins US) and then I have an creative activity book for adults coming out next August with Chronicle US and Penguin Australia. Otherwise you can always check out what I’m tinkering away with in my studio on Instagram and YouTube.
Climate Change
AI giant Anthropic’s first Australian data centre deal an “egregious” example of Big Tech double talk
SYDNEY, Thursday 17 September 2026 — Greenpeace Australia Pacific has slammed AI giant Anthropic’s deal for its first Australian site in Queensland’s Western Downs, the heart of coal seam gas country, saying the project will entrench gas and turbocharge climate pollution.
The expected electricity demand from the data centre site, situated in the middle of the Western Downs coal seam gas fields, is comparable to 1.5 million Australian households. Greenpeace’s report Energy Vampires: The AI data centres draining Australia called for a moratorium on frenzied data centre development until appropriate guardrails are in place.
Joe Rafalowicz, Head of Climate and Energy at Greenpeace Australia Pacific, said: “This is an egregious example of Big Tech giants being given carte blanche to drain energy and water, and use polluting gas to fuel their hyperscale data centres.
“AI and Big Tech corporations claim to bring new renewable energy to the grid, while blatantly planning to power their operations with polluting fossil fuels.
“Planning documents show the first stage of this behemoth project could be powered by ‘behind the metre’ gas — the same playbook AI companies have used in the US, leading to a 20% increase in climate pollution from electricity. Now these companies want to bring their cowboy plans to Australia and the Federal Government is allowing it.
“If they plugged into the local grid, the power required would increase Queensland’s electricity grid emissions by around 6.6 million tonnes — an 18% rise. If they build their own gas-fired power plants, this will drive up Queensland’s emissions even more.
“Billions of dollars are now pouring into a massive pipeline of proposed new data centres, of unprecedented size, being built at incredible speed across the country. Australians should be worried about the extreme lack of scrutiny being applied to these projects, and the corporations leading the data centre charge.
“The data centre build-out is happening without the endorsement of the Australian people, yet we are the ones who will pay the price. We can not allow unchecked data centre expansion to derail our renewable energy transition, entrench gas and turbocharge climate pollution — that’s why Greenpeace has called for an urgent moratorium until appropriate guardrails are in place.”
ENDS
Media contact: Kate O’Callaghan on 0406 231 892 or kate.ocallaghan@greenpeace.org
Climate Change
Analysis: India’s power-sector emissions flat for two years due to clean-energy surge
A surge in clean energy has kept carbon dioxide (CO2) emissions in check across India’s power sector, with no growth from the first half of 2024 to the same period in 2026.
This guest post is by:
Lauri Myllyvirta, lead analyst at Centre for Research on Energy and Clean Air (CREA)
Anubha Aggarwal, India analyst at CREA
This is the first time in more than 50 years that there has been no growth in India’s coal power over a two-year period, even as electricity demand grew overall.
At the same time, both oil and gas consumption have fallen across the nation for two years in a row, helping alleviate the shock of the Hormuz crisis.
Nevertheless, the new six-monthly analysis for Carbon Brief shows that India’s emissions grew by 3.7% year-on-year in the first half of 2026, due to increases from steel, cement and other sectors.
Other key findings for the first half of 2026 include:
- India’s power-sector emissions flatlined at 2024 levels, after a 2.2% decline in the first half of 2025 and a 2.3% rise in the same period this year.
- Clean energy met all of the 7% rise in India’s electricity demand over the two years, adding 63 terawatt hours (TWh), equivalent to the total demand of Switzerland.
- India has added 77 gigawatts (GW) of solar in this two-year period, helping meet 60% of the rise in electricity demand overall.
- While fossil-fuel generation stagnated, generators added 8.5GW of new coal capacity, leading to fewer running hours and increased costs to electricity consumers.
- CO2 emissions from oil and gas fell by 7% year-on-year, extending a reduction that began in 2025, despite higher demand for road transport fuels.
- Steel and cement emissions grew by 8% year-on-year, reaching a 23% share of India’s total CO2 in the first half of 2026.
If the pace of India’s clean-energy expansion is to continue, it will need to upgrade its electricity grid, rapidly build out energy storage and boost the flexibility of coal power.
While clean-energy expansion is covering most or all of India’s power-demand growth, the fossil-fuel industry continues to pursue major capital investments.
This includes large amounts of new coal-power capacity, ambitious plans for the conversion of coal-to-chemicals and efforts to boost domestic coking coal production for the steel sector.
While CO2 output from the power sector is flat, with oil and gas in decline, India’s emissions still went up due to the contribution from industry.
India lags behind its competitors – including most large emerging economies – when it comes to electrifying its industrial sector.
Faster progress would enable clean electricity to substitute for fossil fuels in industry, as well as for power, offering the potential for India to cut its emissions overall.
Flatlining fossils
Last year, India’s CO2 emissions from fossil fuels and cement grew at their slowest pace in two decades, according to previous analysis for Carbon Brief.
This sharp slowdown was due to rapid clean-energy growth and flat oil demand, combined with rising emissions from steel and cement.
The first half of 2026 marks a continuation of these trends.
Most strikingly, the ongoing surge in clean-energy generation means that emissions have flatlined in India’s power sector for two years, as shown in the figure below.
Power-sector CO2 was the same in the first half of 2026 as two years earlier, with a small decline in 2025 having been reversed over the same period this year.
Beyond electricity generation, India’s key emitting sectors continued to see divergent trends in the first half of 2026, as some saw ongoing decline while others reached new heights.
This is shown in the figure below, which compares year-on-year changes in emissions during the first half of 2026 with the same periods in 2025, 2024 and the average for 2021-23.
Specifically, emissions grew by 2.3% in the power sector, reversing last year’s decline, while demand for gas and oil products fell for another year.
The biggest increases were for steel and cement, where emissions growth accelerated to 8% year-on-year in the first half of 2026, well above the recent trend.
Clean-energy growth matches power demand
The period from the first half of 2024 to the first half of 2026 saw the largest increase in non-fossil power generation on record in India.
This enabled fossil-fuel consumption and CO2 emissions from the sector to stay flat, even as electricity consumption increased.
Indeed, this is the first time in more than 50 years that there has been no growth in coal power over a two-year period, even as electricity demand grew overall, as shown below.
Over this two-year period, India’s total power generation increased by 7%, some 63TWh, equal to the total consumption of Singapore or Switzerland.
The additional power requirement of 63TWh was met entirely by clean energy. Solar grew by 44TWh, alongside growth from wind (13TWh), nuclear (7TWh) and hydro (8TWh).
Together, clean-energy sources added 70TWh over two years, more than the net increase in demand.
(For comparison, China’s nuclear, wind and solar output increased by 485TWh in 2025.)
The figure below shows that new investments are more than sufficient to maintain this trend, as added power generation from new clean power capacity has stayed above average demand growth for the past 18 months.
Over the past two years, India added 77GW of new solar capacity, 11GW of wind, 5GW of hydro and 0.6GW of nuclear capacity.
Solar power continues to dominate clean-energy growth, but, collectively, the other non-fossil sources still contributed 40% of the overall increase in generation.
One factor in electricity demand growth in 2026 is the El Niño, which delayed the monsoon and intensified heatwaves, driving up cooling demand.
India is accelerating investment in energy storage, which will support further growth in clean power. The National Electricity Plan projected a requirement of 82 gigawatt-hours (GWh) of energy storage capacity by 2026-27 and 411GWh by 2031-32.
As of May 2026, the government has issued tenders for around 272GWh of energy storage capacity, including 142GWh of pumped hydro and 133GWh of battery storage systems. Current capacity is 7.5GWh of battery storage and around 60GWh of pumped hydro.
Which states led the clean-power shift?
The fall in power generation from fossil fuels from the first half of 2024 to the same period in 2026 was concentrated in a few states.
Gujarat saw both the largest reduction in fossil-fuel generation and the largest expansion in clean power, as shown in the figure below.
After Gujarat, the largest increases in clean-power generation were seen in Rajasthan and Tamil Nadu, which also saw reductions in power generation from fossil fuels.
Several other states saw declines in fossil-fuel generation due to higher net imports, rather than local clean power. These included Madhya Pradesh, West Bengal and Punjab.
Karnataka and Andhra Pradesh also succeeded in increasing clean-power generation faster than power demand, thereby contributing to keeping fossil fuel-based power generation stable nationwide across the two-year period. However, they exported much of the increase and consequently saw local increases in power generation from fossil fuels.
The two states with the largest increases in power demand, Maharashtra and Telangana, managed to almost match the rise with growth in clean-power generation.
Fall in oil and gas consumption continues
India’s oil consumption continued to fall during the first half of 2026, dropping 1.3% year-on-year, a slight acceleration from the 0.7% reduction in the same period last year.
While diesel and petrol consumption continued to grow, oil consumption was pulled down overall by declines in liquefied petroleum gas (LPG), petcoke (a solid derivative of oil used in the cement industry) and industrial feedstocks. Growth of aviation fuel use eased.
Diesel consumption growth accelerated from 1.8% to 4.1% in the first half of the year, supported by higher freight movement and increased agricultural demand, as the delayed monsoon led to greater use of diesel-powered irrigation.
Petrol consumption returned to growth, increasing 6.9% year-on-year after zero growth in the same period in 2025, reflecting sustained growth in passenger and two-wheeler mobility.
A significant increase in ethanol blending shaved a full percentage point off the growth of petrol consumption. India achieved its 20% ethanol blending target five years ahead of schedule in 2025-26. (Ethanol blending has faced public opposition.)
Electric vehicle (EV) adoption in India is also gaining momentum, with EVs adopted in a widening range of categories.
In Delhi, an EV policy was launched to accelerate electrification of the vehicle fleet, with a particular focus on two-wheelers, three-wheelers (auto rickshaws), commercial vehicles and high-mileage segments, alongside expanded charging infrastructure. Higher EV adoption rates will moderate the growth in emissions from petrol consumption in India.
In contrast, aviation fuel demand growth slowed down from 5% to 2%. The slowdown coincided with the strait of Hormuz and wider crisis, which disrupted international aviation through temporary airspace closures and flight cancellations to several Middle Eastern destinations. Elevated aviation fuel prices also increased airline operating costs, contributing to lower fuel demand.
LPG consumption contracted by 7%, after 5.7% growth in the same period last year, amid disruptions in global LPG markets following the Hormuz crisis.
Petcoke consumption fell 9.9%, more than reversing a 9.3% increase in the same period last year. Rising petcoke prices encouraged cement manufacturers to switch to coal.
Consumption of other petroleum products continued to drop, although the pace of decline moderated from 14% in 2025 to 9% in 2026.
Industrial feedstock use was affected by shortages and price increases.
Naphtha demand contracted as import prices nearly doubled and domestic prices increased by around 60%, prompting petrochemical manufacturers to reduce operating rates and suppress demand for imported naphtha.
Bitumen consumption remained subdued due to slower road construction, driven by persistent land acquisition challenges and higher bitumen costs.
Meanwhile, higher light diesel oil (LDO) prices and shortage of LPG led some industrial consumers to switch back to furnace oil in boilers and heaters, despite the higher air pollutant emissions. Supply of fuel oil to industry increased for the same reason.
Rapid emission growth from heavy industry continues
Steel and cement output in India grew by 8% and 9%, respectively, year-on-year in the first half of 2026, despite rising input prices and weakening profitability.
The growth in steel and cement was supported in part by increased investment in India’s real estate sector, especially in the second quarter. Steel consumption growth outpaced production, implying that inventories built up last year were tapped.
Despite domestic demand growth, profit margins of Indian steel and cement manufacturers remained under pressure for much of the period due to elevated raw material costs – particularly imported coking coal – and higher freight costs stemming from the Hormuz crisis.
The pressure on prices could dampen growth. Cement prices are expected to rise to levels last seen in the 2021-22 financial year, when Russia’s decision to cut back gas exports to Europe drove a sharp increase in fossil-fuel prices.
Outside the steel, cement and power sectors, coal-consumption growth accelerated to 14% in the first half of 2026, up from 3% last year, as the LPG shortage prompted a shift to coal.
Gas shortages resulted in some additional burning of coal for cooking in March and April. The government officially authorised the hospitality industry to use coal, refuse-derived fuel pellets, biomass and kerosene for one month.
The ceramic and tile industry also requested that the government allow the use of coal gasifiers amid the gas shortage. State governments including Delhi NCR, Rajasthan, Tamil Nadu, Gujarat and Maharashtra also allowed industries to temporarily use alternative fuels, including coal.
India’s industrial energy use is dominated by fossil fuels, particularly coal. Indian industry has the second-lowest electrification rate in the G20, as shown in the figure below. The share of electricity in total energy consumption in the sector also lags the world average, in terms of both current levels and the rate of increase.
The current low rates of electricity use in Indian industry imply that there is major potential for electrification, using technologies and processes already in place in other countries.
New investments in coal
While the clean-power expansion is starting to meet most or all of India’s electricity demand growth, there are still large investment plans across the coal supply chain.
Some 43GW of coal-power capacity was under construction at the end of June. Additional coal-power capacity is seen as necessary to meet increasing peak loads, even as solar power and energy storage are already playing a role in covering daytime and evening peak demand, respectively. The expansion of energy storage will increase this contribution.
Outside the power sector, India has major ambitions to produce chemical-industry products, such as fertiliser and plastic feedstock, from coal through coal gasification, in pursuit of energy security.
The government is targeting a capacity to process 100m tonnes of coal per year in the next four years, despite the technology for coal gasification still being nascent in India. At present, the only operational use of coal gasification is at Jindal Steel Limited, which is reportedly using syngas in its steel-making process.
Meanwhile, India plans to reduce its average CO2 emissions per tonne of steel by 25% by 2025-26, mainly by reducing the share of coal-based steelmaking.
At the same time, the government is aiming to increase the use of domestic coking coal, which it notified in January this year as a “critical and strategic mineral”. Coal miners and steel companies are reportedly planning to establish additional washeries for coking coal to make it suitable for blending with imported coal for use in steel production.
India is also looking to invest in new coal mines in the near future.
These continued investments in coal gasification, domestic coking coal and new coal mining capacity could lock in coal use across industry for several decades.
Outlook for India’s emissions
Over the two-year period from the first half of 2024 to the same period in 2026, India has achieved its largest clean-energy expansion on record.
As a result, power-demand growth has been met entirely by clean electricity and CO2 emissions in the sector have flatlined.
This expansion of clean energy also allowed a reduction in fossil-fuel imports for power generation, with the use of imported coal falling 38% and the use of gas by 35%, supporting the energy security aims of the government and reducing exposure to the Hormuz shock.
In order to keep the clean-energy growth going, India would need to overcome multiple obstacles, including expansion of the electricity transmission network, improvements in grid flexibility to accommodate variable renewables and the timely completion of new projects.
For example, renewable power projects totalling 5.3GW missed completion deadlines and are having to pay penalties to the grid operator in order to retain network access.
Curtailment has emerged as an issue, particularly for projects relying on interstate power transmission, pointing to the need to upgrade the network. (Curtailment refers to electricity generation that is “wasted” because it cannot be accommodated by the power network.)
Another obstacle to be overcome if clean energy is to keep growing will be making coal-power plants more flexible, so they can ramp down during high renewable output.
A flexibility plan for coal-power plants has been delayed by more than a year due to persistent regulatory bottlenecks, contributing to the curtailment of renewable energy.
Expanding energy storage has the potential to ease grid and flexibility constraints, while reducing or eliminating the need for adding thermal-power capacity to meet peak loads.
The Central Electricity Authority has proposed that, after June 2027, all new government-owned solar and wind projects would have “mandatory” two-hour battery storage. (This mirrors a policy that was in place in China until early 2025 and was subsequently scrapped, in favour of more market-based approaches.)
For oil and gas, India’s consumption has been flatlining for the past two years, after half a century of continuous growth that was only briefly interrupted by Covid-19.
This has reduced the impacts of the Hormuz crisis on the country’s trade balance, helping close the gap between supply and consumption. But it has entailed disruptive shifts in many oil-dependent sectors.
For example, high prices and fuel shortages due to the Hormuz crisis led state governments to reverse their orders banning the use of dirtier fuels such as fuel oil, kerosene and coal in industries and commercial establishments.
Meanwhile, EV adoption has also begun to influence oil consumption.
Despite the progress in the power sector and reductions in oil consumption, India’s total emissions went up over the past two years due to a major increase in industrial emissions.
Low levels of electricity use in industry mean that growing industrial output results in increasing direct fossil-fuel use and emissions.
Unless the rate of industrial electrification picks up, increases in heavy industry output will continue to translate into increases in fossil-fuel consumption and CO2 emissions.
About the data
This analysis is based on official monthly data for fuel consumption, industrial production and power generation from different ministries and government institutes.
Coal-power emissions are estimated by combining plant-level coal consumption from the Central Electricity Authority’s (CEA) monthly coal reports with data on the calorific value and emission factors of coal used at different power plants from the CEA’s CO2 baseline database.
For each station and month, total coal consumption is split into domestic and imported coal using the imported share of coal receipts over a trailing two-month window, found to best reproduce the actual split in data available for 2023.
Consumption is converted to CO2 using each plant’s station-specific gross calorific value from the CEA database and IPCC emission factors for domestic coal, imported coal and lignite. The national-average calorific value is used for recently added plants, for which data is not available in the baseline database.
Coal use at steel and cement plants, as well as process emissions from cement production, are estimated using production indices from the index of eight core industries released monthly by the Office of Economic Adviser, assuming that changes in total fossil-fuel use follow production volumes. These production indices were used to scale fuel use by the sectors in 2022.
To form a basis for using the indices, monthly coal-consumption data for 2022 was constructed for the sectors by combining the annual total coal and petcoke consumption reported in IEA World Energy Balances with monthly production data. This work was set out in a paper by Robbie Andrew, a researcher at Norwegian research institute CICERO, on monthly CO2 emission accounting for India. Monthly petcoke consumption was available from the Petroleum Planning and Analysis Cell, while coal consumption by the cement industry was calculated by subtracting petcoke use from total fossil-fuel use.
Annual cement-process emissions up to 2025 were also taken from Andrew’s work and scaled using the production indices. This approach better approximated changes in energy use and emissions reported in the IEA World Energy Balances, than did the amounts of coal reported to have been dispatched to the sectors, showing that production volumes are the dominant driver of short-term changes in emissions.
For other sectors – including aluminium, auto, chemical and petrochemical, paper and plywood, pharmaceutical, graphite electrode, sugar, textile, mining, traders and others – coal consumption is estimated based on data on despatch of domestic and imported coal to end users from statistical reports and monthly reports by the Ministry of Coal, as consumption data is not available.
Coal consumption by “captive” coal-power plants – those supplying power to industrial sites, not to the public electricity network – was calculated based on capacity changes from Global Energy Monitor, assuming constant utilisation, as utilisation has been very stable year-to-year, as calculated from Central Electricity Authority data.
The difference between coal consumption and dispatch is stock changes, which are estimated by assuming that the changes in the amount of coal stored at end-user facilities mirror those at coal mines, with end-user inventories excluding power, steel and cement assumed to be 70% of those at coal mines, based on comparisons between our data and the IEA World Energy Balances.
Stock changes at mines are estimated as the difference between production at and dispatch from coal mines, as reported by the Ministry of Coal.
Coal consumption is estimated in two ways for sectors beyond power, steel and cement. Consumption of domestic coal in these other sectors is taken from the monthly reports by the Ministry of Coal. Their consumption of imported coal is estimated from the total imports of thermal coal reported by consultancy Kpler, by subtracting demand for imports at coal-power plants. The basis for this assumption is that steel and cement industries use little imported thermal coal, according to Ministry of Coal data.
Product-by-product consumption data for petroleum products, as well as gas use by sector, is from the Petroleum Planning and Analysis Cell of the Ministry of Petroleum and Natural Gas.
As the fuel dispatch and consumption data is reported as physical volumes – such as tonnes or litres – calorific values are taken from IEA’s World Energy Balance and CO2 emission factors from 2006 IPCC Guidelines for National Greenhouse Gas Inventories.
The emissions factor for motor oil or petrol was updated, based on the blending percentage of ethanol each year. The ethanol-blending percentage is as reported by the Ministry of Petroleum and Natural Gas.
Calorific values are assigned separately to different fuel types, including domestic and imported coal, anthracite and coke, as well as to petrol, diesel and several other oil products.
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The post Analysis: India’s power-sector emissions flat for two years due to clean-energy surge appeared first on Carbon Brief.
Analysis: India’s power-sector emissions flat for two years due to clean-energy surge
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