India plans to bring 'avoidable coal imports' to zero by 2023-24 in the midst of an abundance of fuel stock due to subdued demand by the power sector, according to the source, following the coronavirus-driven lockdown.
The source, on condition of anonymity, said that "the government is aiming to reduce the country's preventable coal imports to zero by 2023-24."
This is at a time when imports of coal from the country increased marginally by 3.2% to 242.97 million tons ( MT) in the just-completed financial year 2019-20. Of the total, 110 MT of fuel were inevitable imports, while the remaining almost 130 MT is preventable imports, the source said.
The government plans to minimize "this preventable import of coal by 25-30% in the ongoing fiscal year," the source said.
The unavoidable supply of coal consisted of low-ash coking coal and iron.
According to industry experts, India does not have much coking coal used by steel mills to blend into iron to make steel, and that is what it wants to import.
"The coastal power plants have boilers which are designed in such a way that they use low-ash coal," the source said.
Coal Minister Pralhad Joshi recently wrote to the chief ministers of all states asking them not to import dry fuel and take domestic fuel supplies from state-owned CIL, which has abundance of fossil fuel.
In order to boost the demand for coal that has been hit by the ongoing lockdown, the government has also announced a series of measures, such as increased supply of dry fuel to link consumers.
The Ministry also approved the relaxation of the quantity of coal for the consumers of linkages.
It also announced that there will be no incentive to power consumers if CIL supplies more than the upper limit of the fuel supply agreement (FSA). Approximately 80% of India's domestic coal output comes from CIL.
