Former Coal India Chairman Partha S Bhattacharyya has asked the Center to withdraw a proposal to do away with compulsory coal washing as it would be a "retrograde" step.
He argued that the PSU's failure to deliver on its promise to supply washed coal led to the erosion of around Rs 1.25 lakh crore in market valuation in 10 years to 2019-20.
The Center plans to remove the mandatory requirement to wash coal before it is transported to thermal power stations.
In 2014, as part of its commitments on climate change, the Government made it mandatory for all thermal units beyond 500 km from the coal mine to be supplied with coal wash.
This was done in line with the country 's position in the climate change negotiations-not to reduce coal consumption, but to focus on emissions control.
"The government is considering a proposal to do away with earlier restrictions of coal washing for dry fuel moving by 500 km or more or for the fuel consumed in and around any city," Bhattacharyya said.
"The proposal to withdraw the mandate for coal washing, mooted at MOEF&CC, is in my considered opinion, a very 'retrograde step'. Considering India's need to depend on coal-based thermal generation for a few more decades, it is felt that the existing mandate for coal washing, instead of being withdrawn should be enforced rigorously in letter and spirit," the former chairman and managing director said in a letter to C K Mishra, Secretary, Ministry of Environment, Forest and Climate Change.
Washing coal increases the efficiency and quality of the dry fuel, therefore increasing its price.
He further said that "for various reasons, the washery construction programme (of CILNSE 3.28 % to phase away supply of unwashed coal over a period of time) lost steam...till the MOEF&CC notified restriction of ash to 34 percent for coal consumed by consumers at distances in excess of 500 km or in the vicinity of large cities."
The criteria could be met either by blending with low ash imported coal or by washing up domestic coal.
Due to delays in the establishment of CIL washers, blending with imported coal has become the option sought, resulting in a substantial increase in imports of thermal coal.
Perhaps this explains, partly if not entirely, the increase in relatively expensive imports of thermal coal for non-coastal consumers to more than 120 million tons per year, resulting in a forex output of USD 8-9 billion, while CIL is struggling with an unmanageable increase in coal stocks even though coal production is far below target.
The replacement of imported thermal coal by domestic coal will not only allow CIL to produce more coal, but will also increase demand for domestic coal, significantly reducing dependence on imported coal.
Eventually, this will also enable the government to successfully complete the auction of coal blocks.
However, in order to remain consistent with climate change commitments, coal must be largely washed away to reduce ash below 34%.
In other words, it will be necessary to pursue this strategy to step up efforts to establish coal washing capacity at the earliest opportunity, on a large scale.
Coal India accounts for more than 80% of domestic coal production.
