National Coal Logistics Policy 2022 – An Overview

Recently the Government of India released the Draft Coal Logistics Policy, with the aim of creating an cost-efficient, sustainable and resilient logistics ecosystem for the movement of coal from mines to power plants and other destinations.

India’s power sector is largely reliant on the availability of coal throughout the year – coal which moves mostly by rail, road, and merry-go-round (MGR) & conveyer belt systems. The latter two are closed-circuit dedicated rail transportation systems between the production and consumption points. The volume of coal handled by Rail, Road, MGR & Conveyor belt in 2021-22 is 415.658 Mt, 235.826 Mt,
116.602 Mt, and 50.911 Mt respectively.

According to estimates, the domestic coal production capacity is expected to reach 1,500 MTPA by 2030, which may continue up to 2040 or beyond. For transportation of more than triple the current volume in less than a decade, it is imperative for the authorities to create appropriate infrastructure and connectivity ecosystem. However, these are currently the major challenges for the sustainable development of coal in the country.

Transportation of such high volume and creating necessary evacuation capacity are lacking due to the following:
a. Lack of investments in logistics infrastructure
b. Higher coal logistics costs owing to inherent characteristics
c. Non-availability of wagons and congestion on the rail network
d. Limited coal transportation by alternate transportation models
e. Limited logistics planning in multi-modal transport

The coal logistics chain involves the movement of coal from the mine to a nearby washery or coal handling plant for value addition. Subsequent to that coal is moved to a dispatch point which can be a railway siding, port, or inland waterways terminal using the road, conveyor, merry-go-round (MGR) train, or rail. Similarly, trunk line movement and last-mile connectivity happen using a different mode of transportation for various origins and destinations (O-D) of Coal.

A recent change in the Government’s approach towards infrastructure development has been of ‘divide and develop’ i.e. each region is individually evaluated to reach at observations related to challenges and gaps in the transport ecosystem. Basis the observations, each region gets its own development policy framework. The National Coal Logistics Policy will follow the same approach.

The Coal Logistics Policy has been created to target the following pain points of the coal logistics sector-

  • Create the optimal infrastructure for coal transportation at the origin & destination point
  • Optimize the total coal transportation in the country
  • Promote common-use coal evacuation infrastructure & investments by the user
  • Develop efficient, eco-friendly multi-modal integrated National Coal Evacuation Infrastructure
  • Establish Smart Coal Logistics corridors for ensuring complete oversight on every tonne of coal from the mine to the consumption point, to ensure online and real-time analysis for market actions.

For this purpose, the Policy proposes a multi-modal integrated National Coal Evacuation Plan and Smart Coal Logistics Corridor Plan. Along with it, a Technical Support Unit and Inter-Ministerial Committee (IMC) will also be established for the identification, formulation & support of the Multi-modal integrated National Coal Evacuation Plan. Issues will be taken up with the appropriate concerned organizations.

Leave a Reply

Your email address will not be published. Required fields are marked *