In what could be a major setback to Gautam Adani-promoted Adani Group, coal from its Carmichael project in Australia may not fire any ultra mega power projects (UMPPs) in India.

This is because the ash content expected in the coal from that mine is much higher than the stipulated maximum set by India’s Ministry of Environment and Forests (MoEF) for such projects.

The coal to be mined from the Carmichael project in Queensland is targeted to produce fuel with ash of 25 per cent that would require minimal washing, according to Adani Mining Pty Ltd, the subsidiary of Adani Group.

On February 5, the Ministry laid down few parameters that are mandatory to get environmental go-ahead for operating imported-coal-based UMPPs. The Ministry notified that a maximum ash content of 12 per cent would be allowed to be used in coal-fired UMPPs.

“The validity of environmental clearance granted is subject to compliance with the coal quality parameters indicated,” the Minstry said in its memorandum available on its Web site. However, this coal can be used for non-UMPP power stations.

India targets to set up 16 projects with 4,000 MW or more capacity. Four of them have been awarded, of which two are based on imported coal.

Adani Group did not respond to queries sent by Business Line .

According to the Adani Web site, the Carmichael project requires an investment of nearly $10 billion for the entire mine, rail and port project.

“The primary objective of the project is to produce 60 million tonne a year of thermal coal for export to meet demand in India. Adani Enterprises Ltd sees supply from Queensland coal resources as key to meeting its target of generating 20,000 MW from its power plants by 2020,” said the Department of State Development, Infrastructure and Planning, Queensland Government.

With coal demand dipping across Europe, the US and China, there remains less opportunity for coal miners if they are not able to sell to India.

“The demand for thermal coal globally may be challenging to predict in view of uncertainties regarding nuclear power, potential of gas based power and renewable and the climate change concerns of coal fired power,” said Dipesh Dipu, Partner at Jenissi Management Consultants, which is a Hyderabad-based energy consultant.

Australia-based Market Forces has written to Securities and Exchange Board of India (SEBI) to register a complaint regarding the failure of the Adani Group to disclose the material risk to the company. Market Forces is a non-Governmental body working to prevent environmentally destructive projects.