The effective rate of Clean Energy Cess (now renamed as Clean Environment Cess) levied on coal, lignite and peat was increased from ₹ 200 per tonne to ₹ 400 per tonne in Budget 2016-17 with effect from 01.03.2016, for financing and promoting clean environment or clean energy initiatives and funding research in the area of clean environment or clean energy. Clean Environment Cess also acts as green tax, on the lines of polluter pays principle.

Government has no such proposal under consideration at present to lower down the cost for aforesaid purposes

This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Rajya Sabha today.

Clean Environment Cess change expands levy on coal and lignite to fund clean energy initiatives, maintaining polluter-pays principle. Increase in Clean Environment Cess imposes a levy on coal, lignite and peat to finance clean environment and clean energy initiatives and fund related research, functioning as a green tax aligned with the polluter pays principle; the government stated no proposal to reduce the levy.