India’s Coal Tax Would Generate $650 Million Annually for the Clean Energy Fund

The Indian government has decided to levy the Clean Energy Cess, or coal tax, on all the coal mined in the country or imported from July 1, 2010. The energy cess was announced by the finance minister Mr. Pranab Mukherjee in this year’s union budget which presented in February.

The Indian government announced the coal tax in order to generate funding for the research, development and deployment of cleaner and renewable energy technologies. A tax of Rs. 50 would be levied on every tonne of coal mined in the country as well as that imported from abroad.

As of April 1 2009, India’s coal reserves stood at 267 billion tonnes. There has been a steady increase in the coal production over the years. The government has a target of mining 461 million tonnes in 2007-08 as against the actual production of 430 million tonnes in 2006-07. Thus the domestic coal mining sector would contribute about $500 million annually while the rest $150 million would be contributed through the import of coal in order to fulfill the demand of 600 million tonnes. (more…)

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