India Sparks Coal Export Drive Amid Surplus Power Plant Stocks

India's cabinet has approved the export of coal due to surplus stock in power plants. The policy also includes auctioning coal for industrial use, except coking coal. This initiative aims to boost coal utilization, cut down on imports, and enhance business processes across group companies.

In a significant policy shift, India's cabinet has greenlit coal exports from surplus-stashed power plants, as revealed by information minister Ashwini Vaishnaw on Friday. The measure allows power plants with coal supply access to export up to 50% of their allocation, thereby optimizing coal resource utilization across group companies.

This initiative emerges as India, the world's second-largest coal producer, seeks to meet escalating energy demands while reducing dependency on imports. Amidst a downturn in coal-fired power generation—which comprises roughly 75% of the nation's electricity output—exports offer a strategic alternative. With production levels robust and a deceleration in power demand, top producer Coal India looks set to benefit from the new export policy.

Added to these measures, the cabinet sanctioned auctions for coal intended for various industrial uses, excluding coking coal. This adjustment facilitates long-term domestic coal procurement without usage constraints, crucially banning traders in order to streamline coal reserve utilization. The government maintains that the policy changes aim to bolster business processes and minimize the country's reliance on external coal sources.

(With inputs from agencies.)