India to double tax on coal

India is planning to double the tax on coal production as part of an effort to reduce the country’s greenhouse gas emissions.

Starting in April, the tax will be 200 rupees ($3.20) per ton, Finance Minister Arun Jaitley said in a speed on the country’s budget, according to Bloomberg Business.

“With regard to coal, there’s a need to find a balance between taxing pollution and the price of power,” he said. “I intend to start on that journey too.”

The money raised from the tax will be used to promote clean energy, the country said. India will also ramp up its effort to get more electric vehicles on the roads and deploy more renewable energy, it said.

Coal represents about 60 percent of the fuel used for electricity in India, so it will increase the cost of coal-fired electricity by about 0.06 rupees (0.001 cent) per kilowatt-hour, Bloomberg said.

Debasish Mishra, a senior director at Deloitte Touche Tohmatsu India Private Ltd., told Bloomberg that the coal tax effort will show that India is serious about fighting climate change in the run-up to an expected international agreement on climate this December in Paris.

But India has thus far avoided making any public commitments to contribute to the pact, unlike major economies like Europe, the United States and China.

Other recent environmental efforts from India have included reducing fuel subsidies and increasing gasoline and diesel taxes.