Coal Logistics Policy to result in cost savings of up to Rs 21,000 crore annually: Pralhad Joshi

Union minister for coal and mines launching India's Coal Logistics Policy.

Union minister for Coal, Mines and Parliamentary Affairs Pralhad Joshi on February 29 released the national Coal Logistics Plan and Policy, 2023 which aims to boost the share of railways in coal transportation to over 87 percent by FY 2029-30.

As per the policy, with energy demand set to soar, coal consumption in India is projected to rise from 980 million tons (MT) to 1.5 billion tons (BT) by 2030, necessitating efficient logistics. The Coal Logistics Plan proposes a shift towards a railway-based system in first mile connectivity (FMC) projects, aiming for a 14 percent reduction in rail logistic costs and an annual cost saving of Rs 21,000 crore.

"This transformative approach is expected to minimise air pollution, alleviate traffic congestion, and reduce carbon emissions by approximately 100,000 tonnes per annum. Moreover, a 10 percent saving in average turnaround time of wagons nationwide is expected," Joshi said at the launch event in New Delhi.

Through the policy, the government aims to shift from traditional road-based coal evacuation system to railway-based systems in FMC projects. The policy also talks about using waterways for coal transportation. Focusing more on such routes instead of roadways would help minimise air pollution, ease traffic congestion, and prevent road damage.

"My Ministry has launched 15 railway projects to address multimodal connectivity gaps. Among these, five projects have already been commissioned, showcasing the government's dedication to harmonising coal production growth with sustainable practices," he said.

Joshi emphasised the Coal Ministry's initiative to integrate Rail-Sea-Rail (RSR) transportation, which he said has witnessed a remarkable growth of around 50 percent over the past five years, with plans for further expansion to 120 MT by FY 2030.

Across India’s major coal producing triangle of Odisha-Chhattisgarh-Jharkhand, the government is executing a total of eight railway projects that are being funded by coal companies. Currently, four of these projects have been commissioned and one project (Tori-Shivpur) will soon be inaugurated. Besides, coal companies have taken up a total of 103 FMC projects of 1051 MT capacity, incurring a cost of Rs 24000 crore. Out of this, 31 FMCs of 291 MT have been completed till now.

Amrit Lal Meena, Secretary, Ministry of Coal, highlighted proposals for extensive energy corridor projects, including construction of new railway lines and capacity augmentation of existing lines. He stressed on the importance of maintaining momentum to ensure coal's integral role in India's energy security and economic growth while upholding sustainability and social responsibility standards.

Additionally, aligned with PM Gati Shakti, 37 critical railway projects have been identified to meet future coal evacuation demand.

A draft of the Coal Logisitics Plan and Policy was first revealed in 2022, which was tweaked based on suggestions from stakeholders. With the launch on February 29, 2024, the Coal Ministry became the first Ministry of the Government of India to come up with a sector specific logistics policy, Joshi said.