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Odisha to seek Rs 250 a ton cess on coal exported to other states

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Reported by Chinmaya Dehury
Bhubaneswar, Sep 7:

In an effort to compensate coal bearing states, which face numerous problems, including environmental degradation and heavy pollution, in the process of producing coal, the Odisha government has decided to propose to the Union Power Ministry to impose a cess of Rs 250 per metric ton on coal exported to other states by way of an equitable distribution of cost and benefits between coal consuming states and coal bearing states.

File Pic
File Pic

The Energy minister of Odisha would raise the demand in the energy ministers’ conference scheduled to be held in New Delhi on Tuesday.

“The concern of Odisha is that while other states enjoy cleaner power, the state bears the brunt of countless disadvantages – problems associated with land acquisition, decline in forest area, environmental degradation and loss of flora and fauna. Col mining also results in heavy pollution of air, water and land,” said a senior official of the Energy department.

Notably, with coal bearing states demanding compensation for negative externalities arising out of coal mining, The Energy Resources Institute (Teri) has recommended a cess at the rate of Rs 119 per tonne of coal produced.

The cess has been proposed by Teri keeping in view the environmental and social impact of coal mining.

While Odisha had demanded free power of up to 25 per cent from thermal plants and 33 per cent from projects based on coal washery rejects, other states either pitched for free power or compensation due to pollution load from coal mining and power generation.

The proceeds of the cess are to be credited into a Coal Environment and Social Impact Mitigation Fund. The amount collected in this fund would go back to the coal bearing states for addressing the externalities.

Teri has also suggested an environment and social cess on coal based power generation factoring in the effects like ash disposal, health damages and displacement.

Apart from this, the Energy minister would also reiterate the demand for free power from the IPPs and CGPs  setting up plants in the state, to meet the negative externalities.

“Considering the magnitude of negative fall outs, the central government should agree for provisioning of 25% to 33% of free power to host states from IPPs and CGPs,” said the official.

It is estimated that about 60,000 MW of power would be generated by the existing and upcoming power plants in the state by the end of 13th plan period. While Odisha’s demand is estimated to rise to 8500 MW from its present demand of 3500 MW by that period, there would be a surplus of 40,000 MW power, which may be supplied to other power deficit states to get clean energy.