Jharkhand can emerge as hub of EVs, battery energy storage systems: Report

Mumbai: Jharkhand’s vast renewable energy potential, combined with its industrial base and critical mineral reserves, positions the state to emerge as a hub for low-carbon manufacturing, ranging from electric vehicles (EV), solar panels and battery energy storage systems (BESS) to green hydrogen production.

At the same time, natural farming and other, nature-based solutions can strengthen rural livelihoods, open opportunities in carbon markets, and enhance climate resilience.

A new report by the Institute for Energy Economics and Financial Analysis (IEEFA) — ‘Jharkhand’s Just Transition: A roadmap for economic growth and diversification’ — estimates that the State will require US$256 billion (Rs 21.52 lakh crore) from 2026 to 2070 to transition from fossil fuel dominant sectors without disrupting the social infrastructure.

“This shift entails phasing out carbon-intensive assets, building new low-carbon capacity, and mobilising unprecedented levels of capital,” says co-author Shantanu Srivastava, IEEFA’s research lead, sustainable finance and climate risk.

While these upfront costs are significant, the report underscores that the long-term benefits in terms of new revenues, jobs, and industrial ecosystems will far outweigh them.

The concentration of heavy industries makes Jharkhand an ideal proving ground for a Just Transition to a diversified, low-carbon economy that could become a model for other states and key to India’s achieving its ambitious climate targets.

The study underscores that while public funds will play a catalytic role, most of the required financing will need to come from beyond state government budgets, through private investment, multilateral concessional capital and innovative blended finance structures. With clear and consistent policies, Jharkhand can attract billions in private and concessional capital, unlocking new infrastructure, industrial clusters, and clean energy innovation.

This massive upfront investment required will also deliver a healthy financial dividend, with a net gain of Rs 6.7 lakh crore (US$79.3 billion) to the state government budget by 2070, IEEFA estimates.

This does not include any resultant increases in central government taxes and duties. “Diversifying the state’s economy into new, low-carbon sectors will add to its GDP, contributing materially towards Jharkhand’s economic growth,” Srivastava says. “Thus, the transition will more than compensate for the state’s lost coal-based revenues.”

Beyond the fiscal dimension, the transition promises wide-ranging just transition benefits. More than US$12.5 billion (Rs 1.05 lakh crore) will be required to reskill, compensate, and support workers and communities dependent on coal, but this social investment will ensure that vulnerable communities are not left behind, but thrive in a low-carbon economy.

“This transition is both a high-risk challenge and a high-return opportunity. If Jharkhand acts now, it can not only safeguard its economy and workforce from the decline of coal but also position itself at the forefront of India’s low-carbon growth story,” says co-author Soni Tiwari, energy finance analyst, South Asia, at IEEFA.