Cabinet okays CoalSETU window, linkage holders can export 50% coal

The policy will allow companies to export up to 50 per cent of coal, highlighting that India has sufficient domestic production of coal

The Union Cabinet on Friday announced a new policy CoalSETU, aimed at creating a special window for industries to buy coal through auctions. This move is meant to make coal supply smoother, efficient, and more transparent. 

 

The latest policy CoalSETU, which stands for Coal Linkage for seamless, efficient and transparent utilisation, is a part of the government’s ongoing reforms in the coal sector. This will allow coal linkage holders to export up to 50 per cent of coal, highlighting that India has sufficient domestic production of coal.

Coal linkage holders can export 50% coal

 

The Cabinet said that the coal bought through this new window can be used by coal linkage holders for their own needs, for coal washing, or for export. Companies will be allowed to export up to 50 per cent of the coal they get through this route. 

   

The policy is also expected to increase the supply of washed coal in India, which could further reduce the need for imports and open opportunities for exporting washed coal as well, the Cabinet said. 

What is the purpose of CoalSETU?

 

Currently, coal auctions for the non-regulated sector, including cement, steel, sponge iron, aluminium and captive power plants, are restricted to specific industries. Under the new window, companies can bid for long-term coal supplies for industrial use. 

 

"The Policy will allow allocation of coal linkages on an auction basis 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," the Cabinet said.

 

However, coking coal, which is used mainly by steel plants, will not be sold through this window. Traders will also not be allowed to participate.

Rules aimed at cutting dependence

 

The Cabinet noted that these rules need to be updated to use the country's coal reserves more efficiently, reduce dependence on imports, and make it easier for businesses to operate.

 

"Looking at the current and future market dynamics and for accelerated utilisation of existing coal reserves, there was a need 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 Cabinet said.

Existing auction system to continue

 

The Cabinet said that the existing auction system for these specified industries will continue. But under the new CoalSETU window, even the non-regulated companies can bid if they want additional coal without usage restrictions.