The global energy transition is paradoxically a material-intensive undertaking. As the world shifts from hydrocarbons to clean technologies, the demand for critical minerals — lithium, cobalt, nickel, copper, and rare earth elements (REEs) — is projected to surge by up to 500 per cent by 2050. For India, a nation aiming to secure energy sovereignty while meeting aggressive climate commitments, these minerals serve as the essential connective tissue for decarbonisation. However, a significant challenge remains: while green technologies eliminate point-source combustion emissions during operation, their upstream supply chains harbour substantial embodied carbon.
Currently, the global midstream architecture is heavily concentrated in jurisdictions with high-carbon electricity grids, most notably China, which refines the vast majority of these critical energy transition minerals. In these regions, electricity emissions for refining nickel, graphite, REEs, hover around 580 grams of CO₂/unit (gCO₂/kWh), a standard measure of the pollution emitted to power refining processes. This interlinks the global energy transition with elevated life-cycle greenhouse gas (GHG) emissions, effectively substituting fossil fuel dependence with a high-carbon, metals-based system. As India bolsters it midstream infrastructure, a strategy of spatial optimisation, aligning the refining infrastructure with both resource and energy geographies must be considered to avoid contributing to enhanced carbon emissions while advocating for decarbonisation.
India’s climate mandate
The imperative to green the critical mineral value chain is tied to India’s updated Nationally Determined Contributions (NDC) for 2031-2035. These targets include: a 47 per cent reduction in emissions intensity of GDP by 2035 relative to 2005 levels; achieving 60 per cent cumulative electric power capacity from non-fossil sources; and creating a carbon sink of 3.5-4 billion tonnes of CO₂ equivalent through forest cover.
Developing a domestic refining ecosystem will boost industrial GDP, reduce import bills, and safeguard against geopolitically influenced supply chain bottlenecks. However, because modern technologies require high-purity inputs, the refining stage dominates the energy and emissions profile. To meet climate targets, India cannot afford a retrofit approach; sustainability must be designed into the system from the outset.
The eastern opportunity
A central pillar of this strategy is the spatial optimisation of the eastern States — Jharkhand, Odisha, and Chhattisgarh. While conventional economics might suggest locating refineries near established renewable energy (RE) hubs in the west, doing so would deprive mineral-rich eastern States of industrial leverage. Instead, India should advocate for “mine-to-mouth” co-location, placing refining facilities directly at the source of mineral extraction.
This approach addresses several critical issues:
Mining operations can take 10 to 16.5 years from discovery to production. Building midstream infrastructure now ensures refineries are ready as domestic mining reaches scale.
Historically, policies like the Inter-State Transmission System (ISTS) charge waivers incentivised RE growth in the south and west, leaving the east reliant on energy imports. Anchoring industrial demand in the east, such as in Jharkhand, which has 52 GW of untapped solar potential will attract the capital needed to build local clean energy ecosystems while bringing green energy to the mouth of the mines itself.
As the coal sector phases down, eastern communities face economic vulnerability. Co-locating mineral refining with RE plants provides alternative employment, skill transfer and upgrade, and new and cleaner lifelines for these regions.
To minimise costs, ageing coal mines can be repurposed. Reclaimed lands already possess roads and transmission lines, making them ideal for refining plants.
Dedicated corridors
The Union Budget 2026-27 has been prescient by announcing Dedicated Rare Earth Corridors across Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. Supported by a ₹7,280 crore manufacturing scheme, these corridors aim to establish an integrated value chain for Rare Earth Permanent Magnets, essential for EV motors and wind turbines. These corridors intersect with the Green Energy Corridor initiatives, which aim to integrate over 150 GW of renewable energy into the national grid. This combined infrastructure will allow the energy-demanding processes of mineral separation and metallisation to be powered by green electrons, closer to mine mouths, ensuring a low-carbon footprint for the resulting magnets.
Furthermore, India can leverage its natural and technological infrastructure to meet its third NDC (carbon sinks). By creating green belts around industrial sites, companies can capture fugitive emissions and attenuate noise. Programmes like the Green Credit initiative and Carbon Capture, Utilisation, and Storage mechanisms offer further pathways to offset ecological impacts.
New carbon axis
The implications of spatial optimisation extend beyond domestic policy. In an uncertain world, carbon is emerging as a new axis of competitiveness. With the European Union’s evolving carbon border measures, the scrutiny of embedded emissions in materials is increasing.
For India, this is a pivotal moment. Replicating carbon-intensive refining models would undermine export potential. Conversely, building a “green-from-inception” midstream sector positions India as a credible, low-carbon alternative for global supply chains seeking diversification. By co-locating mining locations and incentivising the injection of RE in these regions, India can fundamentally rewrite the economics of the global energy and just transition.
The writer is Research Consultant, Chintan Research Foundation. Views are personal
Published on April 20, 2026