Coal Gasification Scheme
The Union Cabinet has approved a ₹37,500 crore package to promote sustainable coal gasification methods in India. The initiative is aimed at reducing dependency on imports for various products and boosting the production of synthetic gas, also known as syngas.
Objectives and Benefits
- Conversion of coal into syngas for producing downstream products like:
- Urea: Currently, about one-fifth of India's requirement is met through imports.
- Methanol: Approximately 80-90% is imported.
- Ammonia: India is completely import-dependent.
- Synthetic Natural Gas (SNG) and fertilisers.
- Addressing India's import bill, which stood at approximately ₹2.77 lakh crore in FY2025 for substitutable products like LNG, urea, ammonium nitrate, ammonia, coking coal, methanol, and DME.
- Targeting the gasification of approximately 75 million tonnes of coal and lignite, contributing to the 100 MT target set for 2030.
Incentives and Financial Details
- Financial incentive of up to one-fifth of the cost of plant and machinery.
- Project size:
- Cap of ₹5,000 crore for a single project.
- Cap of ₹9,000 crore for SNG and urea projects.
- A single entity can avail a maximum of ₹12,000 crore across all projects.
Background and Previous Initiatives
The scheme builds on the National Coal Gasification Mission and an earlier ₹8,500 crore incentive scheme approved in January 2024. Eight projects worth ₹6,233 crore are currently under implementation.
Overall, the initiative aims to stimulate long-term investment in coal gasification in India, providing more certainty and incentives for sustained development.
