Potential for green growth and job creation in Maharashtra's just transition

The state government should formulate a comprehensive State Just Transition Policy, focusing on economic diversification, workforce skilling and development

Navigating the green transition (Image: Mahaurja)

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Updated on:

12 Mar 2024, 5:54 am

5 min read

Maharashtra, which contributes 10% of India's greenhouse gas emissions, plays a pivotal role in achieving the nation's climate targets, including the Net Zero goal by 2070. The state's economy faces vulnerability during the energy transition, given its substantial reliance on coal-based thermal power and automobile manufacturing, with the third-largest number of factories directly dependent on fossil fuels.

The impending energy transition is expected to significantly impact over 40% of factories, with the coal mining, coal-based power, and automobile sectors facing the most challenges in the next decade. Urgent just transition plans are necessary for these sectors.

Approximately 1.0 million formal workers engaged in coal mining, thermal power, refineries, and fossil-fuel-dependent factories will be affected over the next two decades, necessitating skilling/reskilling and other transition support. The actual number of informal workers impacted is considerably higher.

Fourteen districts, notably the Chandrapur-Nagpur-Yavatmal region and Pune region, stand out as transition hotspots. These areas require strategic plans encompassing economic diversification, workforce transition, and substantial investments in green energy, industry, and infrastructure. The state should adopt a comprehensive Just Energy Transition Policy along with regional plans to facilitate inclusive green growth.

The International Forum for Environment, Sustainability, and Technology (iFOREST), a leading environmental think tank, collaborated with the Department of Environment and Climate Change, Government of Maharashtra, to orchestrate a multistakeholder meeting addressing 'Just Energy Transition in Maharashtra.'

The objective was to bolster green growth and generate green jobs in the state, aligning with its ambitious goal of attaining a $1 trillion economy within the next five years. This gathering convened a diverse array of participants, including state government officials, industry leaders, researchers, think tank experts, and influential figures from civil society, among others.

During the event, iFOREST unveiled the inaugural comprehensive assessment report addressing the challenges and opportunities of a just energy transition in the state. Titled "Just Energy Transition in Maharashtra: An Opportunity for Green Growth and Green Jobs," the report extensively examines all major sectors expected to face high or moderate impacts from the green energy transition.

Sectors such as coal mining, thermal power, automobiles, steel, cement, and brick production receive detailed scrutiny in the report, aiming to assist the state government in formulating a comprehensive strategy for the transition. Emphasising potential opportunities for green growth and job creation, the report underscores the need for the right policy mechanisms and both public and private investments.

At the event's inauguration, Mr. Pravin C. Darade, Principal Secretary of the Department of Environment and Climate Change, Government of Maharashtra, emphasised, "Maharashtra has a target of achieving a trillion-dollar economy. It is certainly a challenge to achieving a net-zero target along with economic growth. Therefore, we need to start the transition to green energy."

In his opening address, Mr. Jamshyd Godrej, Chairman & Managing Director of Godrej & Boyce, expressed, "Maharashtra provides an important opportunity for the green transition. The coming together of the industry and Mumbai’s financial power will be extremely important."

During the inaugural function, Mr. Chandra Bhushan, CEO of iFOREST, noted, "Maharashtra is vulnerable to energy transition because its economy is fossil fuel-intensive. But this vulnerability can be turned into an opportunity for green growth and jobs in the state through appropriate state policies, sectoral and regional plans, and public and private investments in just transition. A just transition will be crucial to achieving inclusive development as Maharashtra embarks on rapid growth to become a trillion-dollar economy. This will ensure that instead of job losses, millions of new green jobs can be created."

Highlighting immediate challenges, Srestha Banerjee, Director – Just Transition at iFOREST, informed the gathering, "Coal mining, coal-based power, and the automobile industry will face transition challenges within the next 10 years. The growth of renewables and electric vehicles, along with the unprofitability of coal mines in the states, will trigger major changes in these sectors."

Mr. Avinash Dhakne, Member Secretary of the State Pollution Control Board, stressed, "Identifying sustainable solutions is vital for the green transition and the environment. Resource availability and costs remain crucial constraints at the moment. However, it is also an opportunity for innovation and entrepreneurship."

Key findings and recommendations from the report

The green energy transition will impact sectors such as coal mining, thermal power, refineries, and 41% of all factories in operation across Maharashtra. This transition is anticipated to affect over 1.0 million formal workers, along with a substantial number of low-paid informal workers, encompassing approximately 0.25 million individuals in the brick-making sector.
Fourteen districts emerge as transition hotspots, namely Nagpur, Chandrapur, Yavatmal, Pune, Nashik, Aurangabad, Ahmednagar, Kolhapur, Sangli, Solapur, Palghar, Raigad, Thane, and Mumbai Suburban (including Mumbai city). These districts collectively house 100% of coal mines, oil refineries, and fertiliser plants, as well as 65% of coal-based thermal power plants (TPP), 75% of automobile and auto-component enterprises, 77% of steel units, over 60% of cement units, and approximately 78% of boilers. Additionally, these districts cover all five brick-making clusters.
The top three sectors facing challenges within the next decade are coal mining, coal-based power, and the automobile industry, necessitating the development of just transition plans.

A crucial aspect of the just energy transition involves supporting micro, small, and medium enterprises (MSMEs), particularly those dominating the auto component segment, foundries, and industrial units utilising boilers. These enterprises employ a significant number of both formal and informal workers. The state government should formulate a comprehensive State Just Transition Policy, focusing on economic diversification, workforce skilling and development, and investments in social and physical infrastructure to enhance social capital and attract investments.

Regional Just Transition Plans should be developed by the State Government to prioritize investments and interventions for hotspot regions. The Chandrapur-Nagpur-Yavatmal and Pune clusters are identified as priority regions for developing such plans.

A key consideration for the just energy transition is the reskilling of impacted workers and preparing the future workforce. Both the government and the industry must significantly scale upskilling and re-skilling programs and allocations to retain local employment. Key areas of skilling should encompass green construction, green infrastructure development, green energy, green mobility, and technical training for repurposing and decommissioning activities.

Overall, the green transition will require substantial investments in the coming years, with the industry and capital market playing pivotal roles. Public funds will also be crucial for building green infrastructure, reskilling workers, planning, and capacity building. The District Mineral Foundation (DMF) funds available in coal districts present an immediate opportunity, with over 1,600 crores of unspent DMF funds in the three coal districts that can be utilised to kick-start transition measures.

“With 10% of the country’s GHG emissions, Maharashtra is crucial in achieving India’s climate targets including the net zero target by 2070. The state government has already taken proactive initiatives such as state climate action plan, net zero carbon emissions in 43 cities by 2040 and Majhi Vasundhara. The state can lead the way in just energy transition in India by implementing actionable plans in hotspot districts and states,” said Chandra Bhushan.

Sustainability