With the aim of reducing air pollution, the Government of Mongolia imposed a ban on the consumption of raw coal, with refined coal briquette as replacement. Thus, the ‘Tavan Tolgoi Fuel’ Company was established for the manufacturing of the refined coal briquette and has been providing briquettes to Ger dwelling area residents in Ulaanbaatar city since last year. Work is underway to increase the company’s current manufacturing capacity of about 3,000 tons per day to 3,500 tons.

The National Committee on Environmental Pollution Reduction has set the price for the coal briquette at MNT 150,000 per ton in an effort to keep its price lower than raw coal and provide balance between its supply and demand.

However, the value-added tax imposed on each ton of the product was estimated to bring its price to MNT 165,000, which is expected to negatively affect the household purchasing power and livelihood. For this reason, the bill for the Law on the Exemption of Value-added Tax was developed by the Government. As this type of VAT has not been previously collected from the Tavan Tolgoi Fuel company yet, the change would not affect budget revenue, as introduced at the plenary session of the parliament.