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India’s carbon dioxide emissions grew by just 0.7% in 2025, marking the slowest annual increase in more than two decades, according to a new analysis by the Centre for Research on Energy and Clean Air (CREA) for Carbon Brief. The unusually slow rise came even as heavy industries such as steel and cement expanded, suggesting that rapid growth in renewable energy and a sharp cooling in electricity demand helped keep fossil fuel emissions in check. Since carbon dioxide accounts for nearly 80% of India’s total greenhouse gas emissions, the shift matters not just for India’s climate trajectory but also for global efforts to limit warming.
Power sector slowdown played the biggest role
The biggest factor behind the emissions slowdown was the power sector, which accounts for almost half of India’s CO2 emissions. According to the CREA analysis, emissions from the sector fell by about 3.8% in 2025, making it the main reason overall emissions growth remained unusually low. That is a major shift for a country where rising electricity demand has traditionally translated into higher coal use and faster emissions growth.
The analysis attributes this drop to two main reasons. First, India added more than 48 gigawatts of new renewable energy capacity in 2025, which was about 70% higher than the previous year. Second, electricity demand growth slowed sharply to just 1% last year, down from an average of 7.4% between 2019 and 2023. A relatively mild summer, which reduced cooling demand, along with a fairly good monsoon, helped limit the pressure on the grid. As a result, non-fossil sources now account for more than 50% of India’s total installed electricity capacity.
Industry kept emissions from falling further
Despite the power sector decline, India’s overall emissions still rose because industrial output remained strong in some of the country’s most carbon-intensive sectors. The analysis notes that the small increase in 2025 was largely driven by steel and cement, both of which are central to infrastructure growth and among the heaviest industrial emitters.
Steel production in India rose by 8% in 2025, while cement output grew by 10%, according to the analysis. These gains were enough to offset a significant part of the emissions decline seen in the power sector. That makes the 2025 slowdown more complex than a simple clean energy success story. It shows that while renewable electricity is beginning to curb emissions growth, India’s industrial expansion remains deeply tied to fossil fuels and energy-intensive production systems.
Why the numbers matter beyond India
India’s emissions growth has typically ranged between 4 and 11% in recent years, making it one of the fastest among major economies. Against that backdrop, the 0.7% rise in 2025 stands out sharply. According to the analysis, it was the lowest annual growth since 2001, excluding the COVID-19 disruption years. That matters because India is the world’s third-largest greenhouse gas emitter, and any structural change in its emissions trajectory has global significance.
Still, the report leaves open two very different interpretations. On one hand, it may indicate that India’s renewable energy expansion is finally beginning to slow the link between economic growth and emissions. On the other hand, it could also reflect softer industrial and electricity demand rather than a permanent turning point. Since India’s official emissions inventory is only available up to 2020, near real-time assessments such as this one rely on proxies like fuel consumption, industrial production and power generation data. Whether 2025 marks the beginning of a longer shift or just a temporary dip will likely depend on how quickly clean power continues to expand relative to demand in the years ahead.
References:
Analysis: India’s CO2 emissions in 2025 grew at slowest rate in two decades
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