ISTANBUL: The Turkish government has more than quadrupled a tax to $70 a tonne on thermal coal imports used in power generation from Colombia, Russia, South Africa and other major coal producers, in a bid to support domestic coal production.
“An additional fiscal obligation of $70 a tonne has been imposed on imported coal for use in power generation,” the Turkish Cabinet said in Turkey’s Official Gazette on Monday. In July, the cabinet imposed a tax on imported coal of $15 a tonne on a gross as received (GAR) basis. Over 90 percent of the coal used in its power plants comes from countries such as Colombia, Russia, South Africa and the United States. South African Richard’s Bay coal is currently trading between around $70 and $78 a tonne.
The tax does not apply to imports from EU countries, Israel, Macedonia, Bosnia Herzegovina, West Bank and Gaza, Tunisia, Egypt, Georgia, Albania, Jordan, Chile, Serbia, Montenegro, Kosovo, South Korea, Mauritius and Malaysia. Some coal traders said the move was to try and discourage new investment in power plants using imported coal.
Turkey’s domestic coal production focuses on lignite, which can be of poor quality, and some hard coal. Turkey has around 22 coal-fired power stations in operation and plans to build up to 80 more over the next few years. Turkey also relies on gas and oil imports from abroad. This, coupled with rapid economic growth and the rise in domestic energy demand, has made the government put in place a strategy to increase the country’s own lignite production.
