Govt permits import of coal with higher ash content up to 25 percent

Relaxing earlier restrictions, the government has permitted power plants to use imported coal for ultra mega power projects (UMPPs) with higher ash content of up to 25 percent. This move will help to cut the generation cost and allow power producers to source the dry fuel from more countries. The Environment Ministry has said that the latest decision has been taken based on the recommendation of the ministry's Expert Appraisal Committee (EAC). Power producers were demanding review of the ash-content restriction for efficient utilisation of high grade, low-moisture coal imported from Australia, South Africa and Russia.

The committee had observed that bulk of the imported coal having ash content lower than 12 percent are typically of Indonesian origin having high moisture content of about 30-40 percent, while imported coal from Australia, Russia, the USA and Columbia have ash content of about 25 percent with moisture content up to 15 percent. It further noted that the lesser the ash generation, the lesser would be its environmental impact. However, by restricting the ash content up to 12 percent, the source of coal gets restricted to a particular origin and thus the price competitiveness may have to be compromised.

Besides, the order stated that the imported coal-based UMPPs using coal with ash content 12 percent should conduct annual study to analyse the actual ash content and assess pollution load and the study report in this regard should be submitted to the ministry. Earlier in February 2013, the Environment Ministry, had reserved ash content in imported coal up to 12 percent, which forced power plants in the coastal region to use only Indonesian coal.