CoalSETU: Govt allows coal linkage holders to export up to 50% of coal capacity

The Union Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved a new window under 2016 policy 'CoalSETU' under which the government allows linkage holders to export up to 50% of coal capacity, since India now has sufficient domestic production of coal.

CoalSETU stands for Coal Linkage for Seamless, Efficient and Transparent Utilization. "Coal linkage holders will be eligible to export coal upto 50% of their coal linkage quantity," the government said.

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The new coal policy will allow allocation of coal linkages on auction basis on long-term for any industrial use and export by adding a separate window named CoalSETU in the NRS (Non-Regulated Sector) Linkage Auction Policy of 2016 wherein any domestic buyer requiring coal can participate in the linkage auction.

Speaking on the announcement, Union Minister Ashwini Vaishnaw said, "Nepal, Bangladesh, Bhutan, have immediate requirement of coal which can be met from this export policy."

He clarified that coking coal shall not be offered under this window. This policy adds to the series of coal sector reforms being undertaken by the Centre.

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The move comes at a time when the government intended to have a fresh look at the current arrangements of coal supplies to the NRS, and extend the linkages in NRS to coal consumers without any end use restrictions. The CoalSETU policy is aimed at boosting ease of doing business, accelerate the utilization of existing coal reserves, and reduce dependence on imported coal for meeting country's energy requirement.

With the new policy, coal linkage holders can flexibly utilize the coal obtained under this window as per their requirement amongst its Group companies. "Considering the demand for washed coal, which would increase in future, the coal linkages to the Washery operators will result in increased availability of washed coal in the country and consequently reduce imports," the Cabinet Committee said in a statement.

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Further, the washed coal will also find takers outside the country and therefore, the washed coal may also be used for the purpose of export, it added.

The policy for auction of coal linkages for NRS has been modified for allocation of coal linkages on auction basis on long-term for any industrial use and export by adding another window/sub-sector. Vaishnaw further clarified that traders shall not be allowed to participate in the proposed window.