India climbed five places to 45th in the Allianz Green Transition Tracker 2026, as greenhouse gas emissions fell by 0.2% in 2025 despite economic growth of 7.6%.
Low-carbon electricity's share rose from 22.4% to 26.6%, while coal-fired generation declined by 2.9%, helping reduce power sector emissions.
However, coal generation rebounded in 2026, raising concerns about whether India can sustain its emissions decline amid growing electricity demand.
Per capita carbon dioxide emissions continued to rise, while fossil fuel subsidies increased to $67.5 billion, more than double their 2015 level.
Globally, renewables overtook coal in electricity generation for the first time, but the world remains on course to reach net zero around 2064, 14 years behind the 2050 benchmark.
India's greenhouse gas emissions fell by 0.2 per cent in 2025 despite economic growth of around 7.6 per cent, marking the country's first emissions decline outside an economic contraction in 25 years, according to a new report.
Emissions declined to 4,508 million tonnes of carbon dioxide equivalent (MtCO₂e), helping India climb five places to 45th in the ranking, found Allianz Green Transition Tracker 2026. However, rising per capita emissions and continued fossil fuel dependence could undermine the progress.
Released on November 5 ahead of 31st Conference of the Parties (COP 31) to the United Nations Framework Convention on Climate Change (UNFCCC), the report assessed 65 economies accounting for 81 per cent of global greenhouse gas emissions.
India's progress score rose by 4.5 points to 14.6, compared with a global average improvement of two points. The score measures progress since 2015 towards net-zero benchmarks for 2050.
India remained behind China (43rd), Canada (42nd) and the United States (41st).
The expansion of low-carbon electricity was the biggest contributor to India's improvement. Its share of electricity generation increased from 22.4 per cent in 2024 to 26.6 per cent in 2025, the largest annual rise since at least 1985.
Clean electricity generation grew by 97 terawatt-hours (TWh), nearly twice the 49 TWh increase in demand.
Solar generation rose by 37 per cent, adding 53 TWh, while wind generation increased by 28 per cent, adding 23 TWh. Coal-fired generation fell by 2.9 per cent, its first annual decline since the pandemic, helping reduce power sector emissions by around 3 per cent.
Favourable weather also contributed. Milder temperatures reduced electricity demand, while stronger monsoon rainfall increased hydropower generation by 14 per cent.
“India has reached an important milestone: emissions are falling even as the economy continues to grow strongly,” said Katharina Utermoehl, Head of Thematic and Policy Research at Allianz Research.
However, she warned that sustaining the decline as electricity demand increases would be the main challenge.
The report highlighted signs of a reversal in 2026. Coal-fired generation increased by nearly 10 per cent year-on-year between April and August, while hydropower output declined by more than 11 per cent.
In September, coal generation rose by 13 per cent as hydropower fell by 20 per cent.
The International Energy Agency expects India's electricity demand to grow by an average of 6.4 per cent annually through 2030.
Meanwhile, the Central Electricity Authority has indicated that previously envisaged coal capacity additions of 97 gigawatts (GW) by 2035 may need to increase to 105–150 GW, although no revised plan has been adopted.
India's carbon intensity declined by 7 per cent in 2025, while energy intensity fell by 6 per cent, indicating improvements in emissions and energy use relative to economic output.
However, territorial carbon dioxide emissions per capita increased by 3 per cent to 2.2 tonnes, while consumption-based emissions per capita rose by 8 per cent to 1.8 tonnes.
Fossil fuel subsidies increased from $63.1bn to $67.5bn, more than double their 2015 level.
Under current policies, India's emissions could reach approximately 5,900 MtCO₂e by 2030 and 6,600 MtCO₂e by 2035, the report projected.
Globally, renewables overtook coal as the largest source of electricity generation in 2025, accounting for 33.5 per cent of output compared with coal's 33.2 per cent.
Global emissions growth slowed to 0.7 per cent, down from 1.5 per cent in 2024.
However, the report warned that the world remains on course to reach net zero around 2064, 14 years later than the 2050 benchmark.
Of the 65 economies assessed, 56 improved their progress scores, with Luxembourg, Denmark and Estonia leading the rankings.
Global clean energy investment is projected to reach $2.2tn in 2026, an increase of 6.5 per cent, with particularly strong growth expected in electricity networks and battery storage.