Existing energy norms to continue for 2 years for 14 urea units: Govt

Shree Pushkar Chemicals & Fertilisers Q1 | Profit at Rs 1.01 crore versus Rs 6.35 crore, revenue at Rs 63.8 crore versus Rs 92.1 crore YoY. (Image: Reuters)

The government today allowed 14 urea units, which could not meet the new energy norms under the 2015 policy, to continue with the existing norms for a period of two years with token penalties.

Under the new urea policy 2015, 27 urea units were to meet the energy efficiency norms by the end of this fiscal. Out of which, only 11 urea units have mostly achieved the target.

In a meeting held today, the Cabinet Committee on Economic Affairs (CCEA) approved the fertiliser ministry's proposal to extend the present energy norms for two years with token penalties for 14 urea units, an official statement said.

Three Naphtha based urea units are also allowed the existing energy norms for another two years/till gas pipeline connectivity.

The CCEA also approved implementation of new energy norms under the new urea policy 2015 for 11 urea units with effect from April, 2018, which the fertiliser ministry official said would help the government save subsidy of about Rs 268 crore.

The cabinet also approved continuation of the new energy norms for five years with effect from 2020.

"The extension of present energy norms for further period of 2 years will ensure easy availability of urea to farmers throughout the country. It will also help to maximise the indigenous urea production and will lessen the import of urea," the government said.

The approval will also help to recover some part of the CAPEX invested by urea manufacturing units for making their units more energy efficient. Energy efficient urea manufacturing units will reduce the carbon footprint and it will be more environment friendly.

The energy efficiency norms notified by the department for the year 2018-19 are capital intensive. The cost economics of the companies does not support the implementation of energy saving schemes as the simple pay back on investment is very long, it added.