December 03, 2008

India may impose cess on high ash content coal

It is reported that centre has proposed a cess on coal with high ash content. The cess would be 2% to 6% of the coal price, depending on the level of ash content in it. The government, through the cess, would fund growth of coal washeries across the country.

The revenue generated from the cess would be used to set up a national level coal fund for setting up infrastructure for coal washing, selective mining research and clean coal technologies. The move has the potential to raise INR 2,400 crore for the fund.

According to sources in the government, union environment ministry has sent the proposal for levying the cess to the finance ministry. The proposal is aimed at discouraging use of high ash content coal in industrial activities like power generation, cement manufacturing, brick and paper. The high ash content not only pollutes the atmosphere but also lowers the productivity of these industries and consumes more energy.

Ash content in coal in India is among the highest in the world. The levels are as high as 35% to 40% against a global average of less than 20%.