Policy for Auction of Coal Linkage for Seamless, Efficient & Transparent Utilisation (CoalSETU)
Kartavya Desk Staff
Source: PIB
Subject: Economy
Context: The Union Cabinet has approved creation of a new CoalSETU window under the NRS Linkage Policy, enabling long-term coal linkages for any industrial use and exports.
About Policy for Auction of Coal Linkage for Seamless, Efficient & Transparent Utilisation (CoalSETU):
What it is?
• CoalSETU is a new auction-based coal linkage window under the Non-Regulated Sector (NRS) Linkage Policy, allowing any domestic industrial buyer to secure long-term coal linkages for own use or export (up to 50%), except resale within India.
Ministry: Ministry of Coal, Government of India
Aim of the Policy:
• To ensure transparent, seamless and efficient utilisation of domestic coal resources.
• To promote ease of doing business and reduce dependence on coal imports.
• To boost availability of washed coal and support export opportunities.
Key Features:
• New CoalSETU Window in NRS Policy (2016): Allows any industrial consumer to participate in coal linkage auctions. Existing NRS auctions for cement, sponge iron, steel, aluminium, CPPs will continue. These users may also bid in the CoalSETU window.
• Allows any industrial consumer to participate in coal linkage auctions.
• Existing NRS auctions for cement, sponge iron, steel, aluminium, CPPs will continue.
• These users may also bid in the CoalSETU window.
• No End-Use Restrictions: Coal can be used for own consumption, washing, or export (up to 50%). Coking coal excluded from this window. Traders barred from bidding to prevent speculative hoarding.
• Coal can be used for own consumption, washing, or export (up to 50%).
• Coking coal excluded from this window.
• Traders barred from bidding to prevent speculative hoarding.
• Export Flexibility: Companies may export up to 50% of allotted coal. Washed coal allowed for export. Coal can be shared across group companies as per operational needs.
• Companies may export up to 50% of allotted coal.
• Washed coal allowed for export.
• Coal can be shared across group companies as per operational needs.
• Boost to Washery Operators: Encourages growth of private washeries. Improves domestic supply of washed, cleaner coal. May reduce import dependence and improve export viability.
• Encourages growth of private washeries.
• Improves domestic supply of washed, cleaner coal.
• May reduce import dependence and improve export viability.
• Alignment with Coal Sector Reforms: Complements the 2020 reform allowing commercial mining without end-use restrictions. Strengthens fair, market-driven allocation of mineral resources.
• Complements the 2020 reform allowing commercial mining without end-use restrictions.
• Strengthens fair, market-driven allocation of mineral resources.
Significance of the Policy:
• Promotes Transparent & Competitive Allocation: Auction-based linkages ensure fair market access and remove closed-door allocations.
• Reduces Import Dependence: By expanding domestic access and improving washed coal availability, industries can reduce reliance on costly imports.
• Supports Industrial Growth: Provides long-term assured coal supply to small, medium and new industries previously excluded.