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India Coal Tax Has Collected $2.85 Billion

India has managed to generate $2.85 billion in revenue from clean energy cess (taxes) it had introduced in 2010, essentially a coal tax.

India’s plans to significantly boost renewable energy infrastructure over the next few years has got a shot in the arm as the government recently announced that it has about $2.85 billion in the National Clean Energy FundIndia Coal Tax

The fund is replenished by a tax on every tonne of coal mined or imported into the country. Since its introduction in 2010, the tax was ₹50 per tonne for four years, but the new government doubled this tax in its first union budget announcement earlier this year.

The National Clean Energy Fund will be used to finance solar power projects under the National Solar Mission and set up dedicated transmission lines for renewable energy projects across the country. The funds may also be disbursed to government bodies like the Indian Renewable Energy Development Agency (IREDA), which will further grant loans to renewable energy projects at concessional rates.

The government is also expected to provide viability gap funding to ultra mega solar power projects currently being pursued by various public sector companies and the recently announced canal-top solar power program from the National Clean Energy Fund.

India plans to add 100 GW solar power capacity by 2022, an increase by five times over its initial plan announced in 2010. This plan would require a total investment of about $100 billion. Thus, foreign financial assistance in significant amount will be needed in addition to government-led investment. Such international funds have also begun to flow with the World Bank recently announcing debt financing for a 750 MW solar power project.

Image Credit: Nostrifikator | CC-BY-SA 3.0


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Written By

Smiti works as a senior solar engineer at a reputed engineering and management consultancy. She has conducted due diligence of several solar PV projects in India and Southeast Asia. She has keen interest in renewable energy, green buildings, environmental sustainability, and biofuels. She currently resides in New Delhi, India.

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