Assocham Advocates for Coal Cess Removal to Boost Aluminium Competitiveness

Assocham urges the removal of coal cess to help power-intensive industries like aluminium. The proposal is part of their pre-budget memorandum for 2025-26. The current cess, increased over the years, has raised aluminium production costs, impacting its competitiveness. Global counterparts support lowering power costs to aid their industries.

Assocham, an industry body, has called for the elimination of the coal cess to aid power-intensive sectors such as aluminium. This proposal has been placed ahead of the Union Budget for 2025-26, potentially to be presented by Finance Minister Nirmala Sitharaman on February 1, 2025.

Initially introduced as the Clean Energy Cess in 2010 at Rs 50 per metric tonne, the levy on coal has since grown progressively to Rs 400 per metric tonne as per the Union Budget 2016-17. This increase has significantly amplified the production costs of aluminium, a sector critically dependent on energy, according to Assocham.

India faces high industrial power costs despite having abundant coal reserves, which has reduced its global competitiveness in the aluminium sector. Other major aluminium-producing nations have taken steps to cut power and production expenses to enhance their global market position.

(With inputs from agencies.)