India’s government approved on Friday auctions for coal that buyers could use for industrial activity and exports in yet another reform in the vast coal sector.
The government endorsed the new policy for auction of Coal Linkage for Seamless, Efficient & Transparent Utilisation (CoalSETU)—supply that buyers can procure via auctions and use the coal for any industrial purpose and for exports.
Coal holders will be eligible to export coal up to 50% of their volumes, according to the new government policy.
Currently, India’s power plants have surplus coal and the country will start exporting the fossil fuel, Indian Information Minister Ashwini Vaishnaw said on Friday, as carried by Reuters.
“Nepal, Bangladesh, Bhutan, have immediate requirement of coal which can be met from this export policy,” Vaishnaw said, as quoted by local daily the Economic Times.
India is the second-largest coal consumer of coal in the world, behind China, and is a sizeable producer as it seeks to meet more of its demand for the energy commodity with domestic production.
Earlier this year, the government eased coal supply restrictions, allowing independent power producers to bid and procure coal supply at auctions for periods of between 1 and 25 years. Under the new measure, power producers can bid for coal for periods of up to 25 years at a premium above the notified price at auctions. The power plants will also have the flexibility to sell the electricity as per their choice.
Coal remains the pillar of India’s power system. Coal-fired power generation and capacity installations in India continue to rise and coal remains the backbone of India’s electricity mix with about 60% share of total power output.
India has added as much as 7.2 gigawatts (GW) of coal-fired power capacity in the current fiscal year ending March 2026, which is already about 60% above the capacity expansion for the whole of the previous fiscal year, government data showed earlier this week.
By Charles Kennedy for Oilprice.com
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