TFP Bureau, New Delhi; July 29, 2024: Most of India’s coal demand is met through indigenous production. The actual demand for coal rose to 1233.86 million tonnes (MT) in 2023-24 from 1115.04 MT in 2022-23. In response, domestic coal production increased by 11.65%, reaching 997.26 MT in 2023-24 from 893.19 MT the previous year.
To meet future coal demand through indigenous sources and reduce non-essential coal imports, domestic production is expected to grow by 6-7% annually, aiming to reach about 1.5 billion tonnes by 2029-30.
Addressing the decline in performance of Coal India Limited’s washeries and the rising demand for washed coking coal in the steel sector, the government has approved monetizing old washeries to boost capacity. A new sub-sector under the Non-Regulated Sector linkage auctions, named ‘Steel using Coking coal through WDO route,’ has been created. This initiative aims to secure long-term coal linkage from identified mines, enhancing the availability of washed coking coal and increasing its domestic consumption in the steel industry.
To reduce coking coal imports, the government plans to increase the current domestic blending of coking coal by the steel sector from 10-12% to 30-35%. Launched in FY22, Mission Coking Coal aims to meet the projected domestic demand outlined in the National Steel Policy 2017. Under the ‘Atmanirbhar Bharat’ initiative, domestic raw coking coal production is expected to reach 140 MT by 2030.
The Government of India has also approved an ₹8500 crore Financial Support Scheme to promote Coal/Lignite Gasification Projects for both public sector undertakings (PSUs) and the private sector. The scheme includes three categories with a total incentive payout of ₹8500 crore:
Category I: ₹4050 crore for Government PSUs, with up to ₹1350 crore or 15% of project cost per project as viability gap funding (VGF).
Category II: ₹3850 crore for both private sector and PSUs, with up to ₹1000 crore or 15% of project cost per project as VGF.
Category III: ₹600 crore for demonstration or small-scale projects, with up to ₹100 crore or 15% of project cost per project as VGF.
Union Minister of Coal and Mines Shri G. Kishan Reddy provided this information in a written reply in the Rajya Sabha today.
