What is the issue?

• With the increasing emphasis on transition to renewables, India is moving away from coal.
• This calls for a coal commission for India, to devise the needed strategy and protect the livelihood of those in the coal belt.

What is Germany's coal commission for?

• In Germany today, there is an existential tug-of-war between the coal industry and the country’s “coal commission.”
• The Coal commission is formally known as the Committee on Growth, Structural Change and Employment.
• It is slowly but surely setting targets for the phase-out of coal-based power generation from the country’s energy mix.
• The commission, a political settlement mechanism, is made up of 28 members with voting rights.
• It includes trade union leaders, industry associations, academics, and regional representatives.
• The commission will determine how and when coal’s phase-out will occur.
• Besides, one of its key objectives is to prevent massive structural unemployment.

Does India need a similar commission?

• India is at the early stages of a major energy transition.
• Within a few decades, renewable energy (RE) will become an increasing part of India’s energy mix.
• But India’s thermal coal base still provides over 60% of the country’s overall generation and is still growing.
• More importantly, roughly 15-20 million people in the coal belt are dependent on the coal industry for their livelihood.
• The geography of India’s wind and solar resources versus coal makes it clear that RE jobs will not be coming to the coal belt in large numbers.
• So there is a crucial need for a transition strategy for the coal belt, particularly in eastern India.
• It is high time that India works on a commission similar to that in Germany, for devising a strategy.

What were the earlier measures?

• Various central government committees have been set up over the years to look into mining and energy industries.
• In the early 1970s, the Fuel Policy Committee under Sukhomoy Chakrabarty made key recommendations about the direction of Indian energy policy after the oil price shocks.
• In the 1990s, the Chari Committee made recommendations about opening up India’s coal industry to private involvement.
• In the 2000s, the Hoda Committee recommended changes in India’s mineral exploration environment to encourage private mining companies.
• More than a decade later, these ideas are slowly being implemented.
• Finally, the Integrated Energy Policy of 2006 articulated India’s energy security priorities.
• It laid out a roadmap for phasing out capital subsidies and providing early support to RE.\

How does the future look?

• The government should consider a committee to consider the future of India’s coal industry, and the PSUs engaged in this.
• Companies like Coal India face no immediate threat to either coal demand or their market power.
• But in the future, both these concerns will come up.
• Also, the divergence in economic performance and incomes between India’s states has intensified over the last decade.
• So public spending and investment have become increasingly necessary in poorer states.
• Notably, many coal-bearing states are also in the bottom third by income per capita - Jharkhand, MP, Odisha, Chhattisgarh and WB.
• Public investments can go a long way in addressing the challenges of the region.
• Evidently, PSUs have been fairly well and have continued to operate in eastern India for decades.
• With private investment largely evading the coal belt, PSUs like Coal India have built up considerable social and political capital in these regions.
• This is despite the political complexities, adverse business environment, and infrastructural constraints in the region.

What are the alternative solutions?

• Indian “coal commission” can assess the feasibility of alternative mechanisms to capitalise on the potential of companies like Coal India in the coal belt.
• The social and political capital that they have created can be used to lead towards other activities.
• These companies could become diversified national champions as part of a new industrial policy for the coal belt.
• Indian coal could be used for non-combustion purposes and the required technologies for such a transition should be adopted.
• E.g. the Dankuni Coal Complex outside Calcutta
• The goal of the plant was to produce piped gas for Calcutta, and various smokeless fuels and other chemical products derived from coal.