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National Clean Energy and Environment Fund (NCEEF)

National Clean Energy and Environment Fund

National Clean Energy and Environment Fund (NCEEF)

To promote clean energy and to take initiatives for clean energy, a finance bill has been passed, which is called the National Clean Energy Fund (NCEF). This was extended to promote a clean environment as well and renamed as National Clean Energy and Environment Fund (NCEEF). The National Clean Energy Fund was originally set up to take action with the climatic change that is taking place in India. In India, there is an unhealthy way of collecting & usage of coal. In the year 2017, coal production in India was 600 million tonnes, and imports brought an addition of about 200 million tonnes. To focus on the clean environment, the Clean Energy Cess on Coal has been renamed to Clean Environment Cess in 2017. In the same way, the National Clean Energy Fund is renamed to the National Clean Energy and Environment Fund.

Fund for Clean Energy

The Ministry of Finance made it clear that the Fund was created mainly for funding research purposes and taking up the innovative projects that come under the clean energy technologies. The fund includes projects like clean fossil energy, environment management and geographical areas projects and projects that come under the National Action plan on climatic changes and National mission on the knowledge for climatic changes taking place frequently.

Coal Production

The cess collected is Rs.50 per tonne towards the clean energy project of coal that is produced and also imported for other Countries. The cess collected by the Central Government was increased to Rs.100 per tonne of coal in 2014 and which further increased to Rs.400 per tonne in 2016.

With this increase in the price of coal production, the funding has also increased. The utilisation of the funds for clean energy is remaining very low. Since 2010, the coal cess collected was Rs.54,336 crore from which half has been given to National Clean Energy Fund. But, only 16% of the fund has gone for financing the projects.

Coal Cost

Coal miners should pay about 30% of the obtained royalty on minerals. This royalty will be given to the District mineral foundation. Rs.5800 crores have been realised under the District Mineral Foundation in the past three years. The major amount mainly comes from the coal-mining districts of the Country. Since 2017, most of the budget that is allocated to the District Mineral Foundation is used for constructing roads and bridges.

Pattern of Fund usage so far

The fund was initially designed for clean energy initiatives. In these initiatives, the water-intensive ways are adopted to transfer coal into natural gas, which will come under the National Action plan on climatic changes.

  • Rs.8,447 crores were allotted to the National Clean Energy Fund
  • Rs.2,250 crores were allotted to the Namame Ganga plan for cleaning the river Ganga project
  • Rs.1,000 crores have been allotted to the Ministry of Water Resources, River Development projects, and the Ganga Rejuvenation project
  • Rs.400 crores have been allotted to the Support Project Tiger and Project Elephant this is because coal mining continues in some of the critical wildlife areas

The coal cess will be used to repay the State Government’s loss in their revenue generation, which happens as a result of Goods and Service Tax.


The NCEEF would be allocated for projects relating to Innovative methods evolved to adopt to Clean Energy Technology and Research & Development. The following explains the basic criteria to avail the fund from the Government of India:

  • Project should be sponsored by a Ministry or any of the Department of Government of India
  • Project should be submitted by Individual or by the association of organisations in the Government/public sector/private sector in the form of loan or viability gap funding
  • The participating organisations should fund themselves with a minimum of 40% of the total project cost. The fund from the Government under the NCEF will also not exceed 40% of the project cost.
  • The project proposals for loan or viability gap funding by Individuals/associations should be submitted to the concerned Ministry which will forward to the NCEEF after further scrutiny
  • The same projects should not avail any other funding from the Government of India or grants from any funding bodies
  • The proposed project should follow Intellectual property right (IPR) issues before funding is approved for any project
  • For accountability of the funds, the project management should employ suitable mechanism as per guidelines

Project Approval

The Project to be a part of the National Clean Energy Fund the project should take care of 40% of its funding and rest will be funded by the National Clean Energy. Such projects can send their proposals. Only personal money should be raised as a fund for the project.

Following approval mechanism will be adopted to approve the projects under NCEF on recommendations of Inter-ministerial Group:

Limit Approval forum
<150 crore The Minister-in-charge of Ministry/Department
>=150 crore and <300 crore The Minister-in-charge of Ministry/Department and Minister of Finance
>=300 crore Cabinet Committee on Economic Affairs 

Environmental Changes

The large climatic change that happens in the Country risks the land, water and forest areas of Indian districts and cities. The information should be made available to the affected communities, civil and private sectors. Projects that are funded should be known, and the way to apply for the grants should be made clear.

India is a developing country, and it deserves all the climatic and environment cleaning funding. India must take steps in effectively using the funds to save the environment free from pollution. With recent changes in climate, the Government of India is likely to propose fundamental norms in taking care of environment and pollution.