Aluminium Association seeks elimination of coal cess in upcoming Union Budget

High cess on coal Rs 400 per MT...be eliminated to support power-intensive industries and retain competitiveness of the domestic industry.The government created the National Clean Energy Fund NCEF with contributions from the clean energy cess imposed on coal mined in India or imported.

The Aluminium Association of India (AAI) has sought the elimination of coal cess in the upcoming Union Budget and said the steep hike of the same has adversely affected the sustainability of the sector.

Finance minister Nirmala Sitharaman will present the Union Budget for 2022-23 on February 1.

The AAI said it is a highly power-intensive industry where coal contributes to 40 percent of aluminum production cost The Association said the ''Indian aluminum industry requests...support in the upcoming Union Budget 2022-23. High cess on coal (Rs 400 per MT)...be eliminated to support power-intensive industries and retain competitiveness of the domestic industry''.

The government created the National Clean Energy Fund (NCEF) with contributions from the clean energy cess imposed on coal mined in India or imported. The cess, which came into effect in 2010, was initially Rs 50 per tonne in 2010 and increased to Rs 400 in 2016.

The cost of aluminum production in India has substantially increased primarily due to the increased power cost in the past few years with increasing coal prices, cess and logistics cost, among others.

In India, the industrial power cost is very high despite having the fifth-largest coal reserves.

Globally, major aluminum-producing countries are extending support to cut power and production costs and rendering competitiveness to the domestic aluminum industry, the AAI said.

The NITI Aayog in a report also highlighted the challenges of high power costs for Indian aluminum producers resulting in competitive disadvantage viz-a-viz global players.

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