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GOVERNMENT OF INDIA
MINISTRY OF COAL
LOK SABHA
UNSTARRED QUESTION NO. 649
ANSWERED ON 22.07.2026
USE OF DOMESTIC COAL IN THERMAL POWER PLANTS
†649. SHRI KANWAR SINGH TANWAR:
Will the Minister of COAL be pleased to state:
(a) the strategy formulated to increase the use of domestic coal in thermal power plants based
on imported coal with a view to strengthen energy security, reduce import dependence and
better utilisation of indigenous coal resources;
(b) the policy measures adopted in coordination with the Ministry of Power, Ministry of
Railways, Coal India Limited and other agencies to ensure timely supply of quality domestic
coal, strengthen coal evacuation infrastructure and facilitate necessary technical modifications
for increased use of domestic coal;
(c) the progress made in increasing the share of domestic coal in thermal power plants based
on imported coal and reducing thermal coal imports;
(d) the measures taken by the Government to improve coal washing, quality management and
logistics efficiency; and
(e) the long term action plan prepared to achieve self-sufficiency in thermal coal while ensuring
reliable, economical and sustainable power generation?
ANSWER
MINISTER OF STATE FOR COAL AND MINES
(SHRI SATISH CHANDRA DUBEY)
(a): The Government has taken various policy initiatives as under to increase use of
domestically produced coal and to reduce coal import dependency:
i. The Annual Contracted Quantity (ACQ) has been increased upto 100% of the
normative requirement, in the cases where the ACQ was either reduced to 90% of
normative requirement (non-coastal power plants) or where the ACQ was reduced to
70% of normative requirement (coastal power plants). Increase in the ACQ would result
in more domestic coal supplies, thereby, reducing the import dependency.
ii. Vide amendment to the Non-Regulated Sector (NRS) linkage auction policy introduced
in 2020, the tenure of coking coal linkages in the NRS linkage auction has been revised
for a period upto 30 years. Increase in tenure of coking coal linkages in the NRS linkage
auction for a period upto 30 years shall have a positive impact towards coal imports
substitution.
iii. Government has decided in 2022 that coal to meet the full Power Purchase Agreement
(PPA) requirement of all the existing linkage holders of Power Sector shall be madeavailable by the coal companies irrespective of the trigger level and ACQ levels. This
decision of the Government of meeting the full PPA requirement of the linkage holders
of the Power Sector shall reduce dependence on imports.
iv. A new sub-sector ‘Steel using Coking coal through WDO route’ has been created in
March, 2024 under the NRS linkage auctions which will lead to increase in the domestic
coking coal consumption and also increase availability of washed coking coal in the
country, thereby, reducing coking coal imports.
v. Coking Coal Mission has been launched to enhance coking coal supply to the Steel
Sector to reduce imports of coking coal. Initiatives have been taken to enhance coking
coal production.
vi. Imported Coal Based (ICB) Plants have been allowed to secure coal under the Revised
SHAKTI Policy, 2025. The coal availability for ICB Plants under this Policy shall
reduce dependence of these ICB plants on imported coal.
vii. Existing Fuel Supply Agreement (FSA) holders have been allowed to secure coal under
the Revised SHAKTI Policy, 2025 after procuring 100% of the ACQ coal under
existing FSA. Coal availability beyond the ACQ to existing FSA holders will benefit
the power producers to meet the full requirement of the power plants.
viii. Coal linkages under the recently created CoalSETU window under the Non-Regulated
Sector linkage auctions shall increase the availability of washed coal in the country and
consequently lead to reduction in coal imports.
(b): The Ministry of Coal launched a Coal Logistics Plan in coordination with concerned
Ministries and stakeholders to assess and address issues in the coal logistics chain, including
constraints related to availability of railway rakes and transportation. The plan covers the entire
coal supply chain from mines to end-use plants and identifies measures to improve coal
evacuation efficiency. Various key measures strengthen coal evacuation infrastructure
undertaken by the Government are as under:-
i. 33 critical railway infrastructure projects have been identified to address gaps in rail
connectivity and strength coal evacuation from the coal bearing States by FY 2030.
ii. To enhance the rail evacuation with the objective of increasing the share of rail transport
in coal movement to around 75% by FY 2030.
iii. 139 first-mile connectivity (FMCs) projects having 1319 MTY (million tons per
annum) capacity are planned to set up by FY 2029-30.
iv. Development of alternative evacuation modes, including Rail-Sea-Rail (RSR) logistics,
to optimize long-distance coal transportation.
As per section 7 of electricity Act 2003, thermal generation is delicensed activity and any
Thermal Power Plant (including ICB Plants) may carry out technical modifications as per the
requirements, including those required for increased use of domestic coal.
(c): At present, five Imported Coal based (ICB) plants, having total installed capacity of 3.7
GW, have secured domestic coal linkage.
(d): The measures taken by the Government to improve coal washing, quality management and
logistics efficiency are as under:i. Implementation of Mission Coking Coal to enhance domestic production of coking coal
to 140 MT, coal washery capacity to 58 MT by FY2030 and increase domestic coking
coal blending to 30% from 10% with implementation of stamp-charging technology for
steel-making.
ii. Modernization and capacity augmentation of existing washeries and establishment of
07 new coking (19.5 MTY) and 07 non-coking (58 MTY) washeries by Coal India
Limited (CIL).
iii. To address the concerns of coal consumers regarding the quality of coal supplied by the
coal companies, the sampling of coal at the loading end is conducted through
Independent Third-Party Sampling Agencies (TPSAs) and the consumers are free to
engage any of the empaneled agencies.
iv. Higher utilisation of First Mile Connectivity (FMC) Projects, equipped with rapid
loading systems for improved coal blending, dispatch of less than 100 mm coal and to
maintain coal quality consistency.
v. Sample collection through Auto Mechanical Sampler (AMS) and Mechanical Augers.
vi. Live streaming of sampling process to the consumers.
vii. 139 first-mile connectivity (FMCs) projects having 1319 MTY (million tons per
annum) capacity are planned to set up by FY 2029-30.
viii. 33 critical railway infrastructure projects have been identified to address gaps in rail
connectivity and strength coal evacuation from major coalfields by FY 2030.
(e): The steps taken by the Government to achieve self-sufficiency in thermal coal and sustain
growth in production of coal are as under:
i. Regular reviews by Ministry of Coal to expedite the development of coal blocks.
ii. Enactment of Mines and Minerals (Development and Regulation) Amendment Act,
2021 [MMDR Act] for enabling captive mine owners (other than atomic minerals) to
sell up to 50% of their annual mineral (including coal) production in the open market
after meeting the requirement of the end use plant linked with the mine.
iii. Single Window Clearance portal for the coal sector to speed up operationalization of
coal mines.
iv. Project Management Unit (PMU) for handholding of coal block allottees for obtaining
various approvals/ clearances for early operationalization of coal mines.
v. Auction of commercial mining on revenue sharing basis was launched in 2020. Under
commercial mining scheme, rebate of 50% on final offer has been allowed for the
quantity of coal that is produced earlier than scheduled date of production. Further,
incentives on coal gasification or liquefaction (rebate of 50% on final offer) have been
granted.
vi. Terms and conditions of commercial coal mining are very liberal with no restriction on
utilization of coal, allowing new companies to participate in the bidding process,
reduced upfront amount, adjustment of upfront amount against monthly payment,liberal efficiency parameters to encourage flexibility to operationalize the coal mines,
transparent bidding process, 100% Foreign Direct Investment (FDI) through automatic
route and revenue sharing model based on the National Coal Index.
vii. For speedier operationalization of mines, the timelines prescribed in the Coal Block
Development and Production Agreement (CBDPA) have been reduced from existing
51 months to 40 months for fully explored coal blocks. Further, for the partially
explored blocks, similar downward revision from 66 months to 52 months has been
done.
viii. The Government has also undertaken the following regulatory reforms and policy
initiatives to simplify procedures and facilitate higher domestic coal production:
o Dispensed with the requirement of Prospecting License (PL) for accredited
prospecting agencies, mine and seam opening permissions, and approval of
Geological Reports (GRs) by Government;
o Declared Coking Coal as a Critical Mineral; and
o Introduction of incentives for underground coal mining.
In addition to the above, coal companies have also taken the following steps to
increase domestic coal production:
i. Coal India Limited (CIL), in its Underground (UG) mines, is adopting new and modern
technologies like Mass Production Technologies (MPT) with the deployment of
Continuous Miners (CMs), Longwall (LW) and Highwall (HW), wherever feasible. In
its Opencast (OC) mines, CIL already has State-of-the-Art technology in its high-
capacity Excavators and Dumpers. Standardization of Heavy Earth Moving Machinery
(HEMM) has been done in opencast mines. Surface Miners have also been deployed in
opencast mines for efficient and eco-friendly mining.
ii. Regular liaison is being undertaken by Singareni Collieries Company Limited (SCCL)
for grounding of new projects and operation of existing projects. SCCL has initiated
action for developing infrastructure for evacuation of coal like Coal Handling
Plants (CHPs), Crushers, Mobile Crushers, Pre-weigh-bins etc.
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