New Delhi, Dec 12 (NationPress) The Cabinet Committee on Economic Affairs, led by Prime Minister Narendra Modi, has given the green light to a new policy for the auction of Coal Linkage aimed at ensuring Seamless, Efficient & Transparent Utilisation (CoalSETU). This policy introduces a fresh avenue within the non-regulated sector linkage framework that allows for the use of coal in any industrial application and for export.

According to a Cabinet statement, this innovative policy, which forms part of the government's ongoing coal sector reforms, facilitates the auction-based allocation of coal linkages on a long-term basis for various industrial uses and exports by introducing the CoalSETU window into the existing NRS (Non-Regulated Sector) Linkage Auction Policy established in 2016. Domestic buyers seeking coal can now participate in this auction process, although coking coal will be excluded from this window.

The current auction policy for coal linkages stipulates that all new coal linkages should be allocated to the NRS, which includes sectors like cement, steel (coking), sponge iron, aluminium, and others (except for fertiliser (urea)), along with their Captive Power Plants (CPPs), on an auction basis. Under the current NRS Linkage policy, these sub-sectors are restricted to specified end users.

Given the evolving market conditions, and to enhance the ease of doing business while maximizing the utilization of existing coal reserves and decreasing reliance on imported coal for the nation's energy needs, a reassessment of coal supply arrangements for NRS was essential. This would enable the extension of linkages to coal consumers without end-use restrictions.

This new policy aligns with the government's broader initiative to open the coal sector for commercial mining, which permits the allocation of coal blocks without end-use limitations. The auction process for coal linkages in the NRS has thus been revised to allow for long-term allocations for any industrial usage and export through the addition of a new window/sub-sector. However, traders will be prohibited from participating in this proposed window, as per the statement.

The existing auction process for coal linkages for specified end-user sub-sectors in the non-regulated sector will persist, allowing specified end-users to also access this new window.

Coal linkages acquired through this window will be designated for personal consumption, coal exports, or other uses (including coal washing), but will not be available for resale within the country, according to the statement.

Holders of coal linkages will be permitted to export up to 50 percent of their linkage quantity. They may also flexibly utilize the coal obtained through this window among their affiliated companies. Recognizing the anticipated rise in demand for washed coal, linkages to washery operators will enhance the availability of washed coal domestically, thereby reducing imports. Furthermore, the washed coal could find markets internationally, thus also qualifying for export, the statement concluded.