India’s domestic raw coal production increased in 2022–23 by 14.77%, and imports also increased by 13.92% over the previous year. The increase is driven by rising demand in the energy sector as well as other coal-consuming sectors such as steel, cement, fertilizers etc. Decarbonisation of the energy sector remains the key challenge for the country to achieve its targets of phasing down coal towards the net zero goals. Fossil fuel continues to account for 56.3% of electricity production, with coal accounting for 48.7%, gas at 5.9%, lignite at 1.6%, and diesel at 1%. India’s target is to meet 50% of its energy demand from renewable energy by 2030. This implies bringing down the share of fossil fuels in energy generation by 6.3% over the next seven years. A draft notification issued by the Ministry of Power specifying the minimum share of renewable energy by any designated consumer having established a coal- or lignite-based generating station in order to reduce the consumption of fossil fuels is a step in the right direction towards achieving the climate action goals. According to the notification, a designated consumer, which is a coal or lignite-based generating station with commercial operation starting on or before March 31, 2023, shall be obligated to supplement its conventional generation with a minimum supply of renewable energy to meet its Renewable Generation Obligation (RGO) of 6% by April 1, 2026, and 10% by April 1, 2028. For generating stations with commercial operation starting from April 1, 2023, to March 31, 2025, the RGO has been fixed at 10% by April 1, 2025, and for those starting from April 1, 2025 onward, the RGO will be 10% from the commercial operation date. Such designated consumers shall have the option of either establishing the required renewable energy-generating capacity or procuring and supplying renewable energy in the requisite quantity. Besides, these generating stations will be at liberty to supply renewable energy on commercial principles, independent of the existing Power Purchase Agreement (PPA) of their coal- or lignite-based generating stations. This may lead to an increase in power tariffs for consumers, as generating companies will not be bound by PPA terms for the supply of a mandated quantity of renewable energy. Any designated consumer having established a coal- or lignite-based generating station who fails to comply with the stipulated mandatory percentage target of RGO shall be subject to penalty under Section 26(3) of the Energy Conservation Act 2001. The penalty provision is expected to ensure compliance, provided there is no leniency if specified dates are missed. Compliance will help achieve twin objectives: increasing the generation of renewable energy and reducing carbon emissions from coal and lignite consumption. Apart from reducing emissions, reducing coal consumption is also critical for the conservation of nature and the environment. Provisional coal statistics released by the Ministry of Coal for 2022–23 show that 96.10% of coal production in the country was from open-cast mines, and the rest, 3.9%, was from underground mines. Compared to underground mining, opencast mining is much safer for miners, but opencast mining leads to the diversion of vast tracts of forest and also results in the release of huge quantities of coal dust and other wastes into the air, giving rise to the problem of air pollution. Removal of greeneries triggers erosion due to the removal of the top soil during open-cast mining and pollutes nearby rivers and wetlands. In biodiversity hotspots like the northeastern region, indiscriminate and illegal coal mining has led to fragmentation of elephant reserves and wildlife habitat, adding to the intensity of man-animal conflict. Growth in energy demand, on the other hand, signifies accelerated industrial growth, urbanisation, and expansion of the economy, which implies the generation of more jobs and livelihoods and an increase in mass production. If energy fuel is not produced in the country, then it will have to be imported to meet the demand. The country’s energy security needs to be robust to meet growing demand. The challenge of climate goals, therefore, presents the hard realities before stakeholders in the coal and power sectors. Meeting the targets of reducing coal production or coal imports is not feasible without a proportionate increase in renewable energy production. In non-fossil fuel-based power generation, large hydropower projects account for 11%, while wind, solar, and other renewable energy projects, including small hydropower projects, account for 31%, and nuclear power projects account for 1.8%. While setting RGO targets for coal- and lignite-based generating companies will cater to the partial requirement of coal reduction in the energy sector and an increase in renewable power generation, states taking up more renewable energy projects is essential to staying on course. Reducing wastage of electricity by switching fans, lights, and other electrical appliances at homes, government offices, and public spaces when not in use can also reduce energy demand and ensure optimal utilisation of available electricity. Balancing growing energy demand with the challenge of meeting climate goals is a daunting task that must be achieved for a greener future.