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Adani Group Accused of Mislabeling Coal Quality in 2014

Context:

A recent report by the Organized Crime and Corruption Reporting Project alleges that in 2014, the Adani Group falsely labeled low-grade Indonesian coal as high-quality, inflating its value before selling it to Tamil Nadu’s power generation company, TANGEDCO. The reporting project is backed by billionaire hedge fund manager and philanthropist, George Soros.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

  1. Status of the Coal Sector in India
  2. Coal Quality and Gradation
  3. What is Clean Coal?
  4. Challenges Related to Coal for India

Status of the Coal Sector in India:

  • Coal, a naturally occurring combustible sedimentary rock, holds significant importance in India’s energy landscape.

Geographic Distribution:

  • India’s coal reserves are concentrated in the eastern and central regions, with major coal-producing states being Odisha, Chhattisgarh, Jharkhand, and parts of Madhya Pradesh.
Types of Coal and Clusters:

Anthracite:

  • Carbon content: 80% to 95%
  • Limited quantities, primarily found in Jammu and Kashmir.

Bituminous Coal:

  • Carbon content: 60% to 80%
  • Predominantly found in Jharkhand, West Bengal, Odisha, Chhattisgarh, and Madhya Pradesh.

Lignite:

  • Carbon content: 40% to 55%
  • High moisture levels
  • Found in Tamil Nadu, Puducherry, Gujarat, Rajasthan, and Jammu & Kashmir.

Peat:

  • Carbon content below 40%
  • Represents the earliest stage of the transformation from organic matter into coal.
Characteristics of Indian Coal

Ash Content and Calorific Value:

  • Indian coal typically has a high ash content and a lower calorific value compared to imported coal.
  • The Gross Calorific Value (GCV) of domestic thermal coal ranges from 3,500 to 4,000 kcal/kg, whereas imported thermal coal has a GCV of over 6,000 kcal/kg.

Environmental Impact:

  • The average ash content in Indian coal exceeds 40%, while imported coal has less than 10% ash content.
  • Burning high-ash coal leads to higher emissions of particulate matter, nitrogen oxides, and sulfur dioxide.

Government Policies:

  • Since 1954, the Indian government has regulated coal prices to limit the use of high-grade coking coal for power generation.
  • To manage coal production, power needs, and pollution, the government advises using imported coal with lower ash and moisture content.
  • The Central Electricity Authority (CEA) in 2012 suggested blending 10-15% imported coal with Indian coal for power boilers designed for low-quality domestic coal.

Coal Quality and Gradation

Determining Quality:

  • Coal quality is measured by its Gross Calorific Value (GCV), which indicates the heat or energy released upon combustion.
  • As a fossil fuel, coal is composed of carbon, ash, moisture, and various impurities. Higher carbon content signifies superior quality or grade of coal.
Categories:
  • Non-coking coal: Graded by Gross Heat content.
  • Coking coal: Graded based on ash percentage.
  • Semi-coking coal: Graded based on ash and moisture percentages.
Grades:
  • Coal quality varies with 17 different grades from grade 1 (highest quality) yielding over 7,000 kcal/kg to the lowest grades yielding 2,200-2,500 kcal/kg.
Applications:
  • Non-coking coal: Utilized in thermal power plants, capable of providing adequate heat despite higher ash content.
  • Coking coal: Crucial for steel production, necessitates minimal ash content.

What is Clean Coal?

Definition:

  • Clean coal technologies aim to mitigate the environmental impact of coal energy production by increasing carbon content and reducing ash content.
Technologies:
  • Carbon Capture and Storage (CCS): Captures CO2 emissions from coal-fired power plants and stores them underground.
  • Coal Washing: Removes impurities before combustion, reducing emissions of ash, sulfur, and other pollutants.
  • Flue Gas Desulfurization (FGD): Scrubs sulfur dioxide from exhaust gases.
  • Gasification: Converts coal into synthetic gas (syngas) that burns cleaner than coal.
  • Advanced Combustion Techniques: Enhances combustion efficiency to reduce emissions and boost energy output.
  • Challenges:
  • Coal Washing: Although it removes ash and moisture, the process is expensive and increases production costs.
  • Coal Gasification: Converts coal into gas using IGCC systems, which improve efficiency by generating both steam and syngas.

Coal Imports in India:

  • Import Policy:
    • The current import policy allows unrestricted coal imports under an Open General License.
  • Consumer Categories:
    • Steel, power, and cement sectors, along with coal traders, can import coal based on their commercial requirements.
  • Coking Coal in Steel Sector:
    • The steel sector primarily imports coking coal to supplement domestic availability and improve quality.
  • Non-Coking Coal Imports:
    • Other sectors like power and cement, as well as coal traders, import non-coking coal to meet their respective needs.

Significance of Coal for India:

  • Energy Source:
    • Accounts for 55% of the country’s energy needs, making it the most important and abundant fossil fuel.
  • Power Generation:
    • 70% of India’s power demand is met by thermal power plants, mostly powered by coal.
  • Energy Consumption Trends:
    • Over the past four decades, commercial primary energy consumption in India has increased by approximately 700%.
  • Per Capita Consumption:
    • Current per capita consumption is around 350 kilograms of oil equivalent per year, still lower than developed countries.

Challenges Related to Coal for India:

Environmental Impact:
  • Pollution and Greenhouse Gas Emissions:
    • Coal mining and combustion contribute to air and water pollution, greenhouse gas emissions, deforestation, and habitat destruction, necessitating the management of environmental impacts.
  • Addressing Environmental Impacts:
    • Balancing the need for energy security with addressing environmental impacts remains a significant challenge.
Health Risks:
  • Community Health Hazards:
    • Exposure to coal dust, particulate matter, and emissions from coal-fired power plants poses health risks to communities, leading to respiratory diseases and other health issues.
Social Challenges:
  • Land Acquisition and Displacement:
    • Acquiring land for coal mining often displaces communities, disrupting livelihoods and posing challenges for proper rehabilitation and resettlement.
  • Socio-economic Hardships:
    • Rehabilitation and resettlement efforts encounter challenges, with affected populations facing social and economic hardships.
Technology Adoption:
  • Limited Adoption of Clean Coal Technologies:
    • Despite advancements in technologies like carbon capture and storage (CCS), their widespread adoption in India is limited due to high costs and technical challenges.
Transition to Renewable Energy:
  • Balancing Energy Security and Renewable Transition:
    • India’s commitment to transitioning to renewable energy sources and reducing greenhouse gas emissions presents challenges for the coal sector.

Finding a Balance:

  • Striking a balance between ensuring energy security and meeting climate change mitigation objectives remains a significant hurdle.

-Source: The Hindu


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