India tightens environment clearance norms for coal based projects

Making clearance norms tougher, the environment ministry decided to consider only those coal related projects such as thermal, sponge and steel which have approved supply of the raw material. A circular issued by the Ministry has said that "It has been decided that all the proposals relating to thermal power projects, steel, sponge iron and any other such projects which are largely dependent on availability of coal as a raw material, shall be considered only after the firm coal linkage is available."

Besides availability of firm coal linkages, the project proponents while seeking project clearance from the environment ministry also have to give details of the status of environment and forestry clearance of the coal sourced i.e. the linked coal mine or coal block known.The circular added that "In case of projects which are based on imported coal, a copy of the firm agreement signed between the coal supplier and the project proponent shall be required.”

The ministry's latest move has come following an observation that in various cases substantial progress and investment were made by the project proponent for setting up a power or steel plant without requisite environmental and forestry clearance in place for captive coal mines or blocks from the mines of Coal India Ltd. 

The ministry said that "It is, therefore, necessary that the status of environment and forestry clearance of the linked coal source is ascertained well in advance to avoid a fait accompli situation arising there from as also the public interest involved in preventing blockage of financial resources due to the absence of the raw material, coal.”

Besides, the ministry has also decided that all such proposals pending with it for environment clearance shall be deferred and delisted till the status of environment and forestry clearance of the coal supply source is established. All the new or expansion plans, including thermal power projects and metallurgical projects, have to obtain prior environmental clearance from the Environment Ministry as per the Environment Impact Assessment notification, 2006.