The Centre is keen to use coastal shipping to transport coal and is working on an approach that involves carrying coal from the mines via rail to a port, shipping it along the coast to another port and again carrying the coal from the port to the plant site.

The government will come out with norms to boost this rail-sea-rail (RSR) route in a move to reduce the logistics cost for coal transportation and reduce power cost.

An inter-ministerial panel said a shift to RSR could potentially save around Rs 760-1,300 per tonne in logistics costs for end users.

The coal ministry is drawing up plans to develop coastal shipping as a cost-effective alternative aiming to supply 112 million tonnes (mt) of the key commodity by 2030 from 40mt at present.

According to a Crisil report, transportation accounts for 25-35 per cent of the cost of power produced by a plant located around 1,000km from a coal mine.

Besides, coal accounts for nearly half of the railway’s total freight basket.

At present, railways account for about 55 per cent of coal evacuation, with a target to increase this share to 75 per cent by 2029-30.

The coal ministry is emphasising alternative routes of evacuation to avoid congestion by 2029-30.

Crisil said coastal shipping is likely to reduce congestion on the rail network by providing an additional alternative mode for evacuation.

Officials said the coastal shipping mode of transportation is an economical and eco-friendly system for moving goods.