The scheme will help realize target of gasification of 100 MT of coal by 2030 under the National Coal Gasification Mission, 2021.

• Coal gasification is a thermochemical process that converts coal into a versatile, combustible gaseous mixture known as synthesis gas (or syngas). 
  • Syngas is a mixture of CO and hydrogen and is used to produce downstream products like urea, methanol, synthetic natural gas (SNG), and ammonia.
• Status of Coal/Lignite in India: Coal reserves (401 billion tonnes); Lignite reserves (47 billion tonnes).

Key Features of the Scheme

• Target: To gasify approximately 75 million tonnes (MT) of coal and lignite by incentivizing domestic industries.
• Financial Outlay: Rs. 37,500 crore.
  • Financial Incentives: maximum of 20% of the cost of Plant and Machinery, disbursed in four installments linked to project milestones.
  • Funding Caps: ₹5,000 crore for single project, ₹9,000 crore for single product-centered projects (excluding SNG and urea), and ₹12,000 crore for any single entity group across all projects.
• Policy Support: To provide long-term investment certainty, the government has extended the coal linkage tenure up to 30 years under Non-Regulated Sector (NRS) linkage auction framework.