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Budget 2014: CIL to provide Rs 5,200 cr to clean energy fund in 2014-15

The government is likely to collect Rs 5,200 crore in 2014-15 from Coal India after doubling the clean energy cess from Rs 50 per tonne to Rs 100 per tonne in the recent budget. The industry is likely to offer another Rs 1,000 crore to the government this year.

"This is a government decision and we pass this burden to our consumers who pay for using the coal. Last year we provided around Rs 2,470 crore to the government as clean coal cess. This year we are targeting a total offtake of 520 million tonnes. If targets are achieved, the total outgo on account of clean energy cess is likely to be about Rs 5,200 crore," a senior CIL director told ET.

According to recent reports, the government has already collected Rs 40,000 crore through levy of this clean energy cess which was introduced in 2010-11. The corpus is growing every year but reports suggest intended beneficiaries continue to wait for disbursement, even as just over 1 per cent of this amount has been allocated to the ministry of new and renewable energy (MNRE), the nodal department for developing clean energy in the country.

The government has till date been able to spend just about Rs 1.6 crore on clean energy projects over the past three years and has spent just Rs 57 lakh since 2011 on grid-connected projects that are supposed to be a priority for the government's clean energy initiatives.

Former CIL chairman Partha Bhattacharyya said: "On an average the government has been collecting about Rs 2,400 crore every year from Coal India and an additional Rs 500 crore to Rs 700 crore from other sources. This figure will at least double now that the cess has been increased."

"At a recent meeting with the government we have been asked increase the proportion of washed and crushed coal gradually. The aim is to sell the entire production as washed a crushed coal over a period. This will take care of the quality issues," said a senior CIL official.

CIL's plans include setting up 16 washeries with a total capacity of 92 million tonnes per year in Chhattisgarh, Jharkhand, Odisha and West Bengal. The washeries will reduce the quantity of ash and other irrelevant component from coal and make it as competitive as imported coal. The company has 17 washeries of 39.40 million tonnes of annual capacity.


"Nevertheless, CIL has always been rationalizing linkages so that coal travels the least distance from the mines to the consumers' yard. We will continue to do this provided coal is available for such rationalizing," he said.

Source: The Economic Times