Centre Clears Rs 37,500 Crore Coal Gasification Push
Centre targets 100 million tonne coal gasification by 2030 to boost energy security and cut imports
- Cabinet clears Rs 37,500 crore coal gasification scheme
- India targets 100 MT coal gasification by 2030
- Scheme aims to reduce LNG, urea and methanol imports
- Government expects investments worth up to Rs 3 lakh crore
GG News Bureau
New Delhi, 13th May: The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved a Rs 37,500 crore scheme to promote surface coal and lignite gasification projects across the country.
The scheme aims to accelerate India’s coal gasification programme and support the national target of gasifying 100 million tonnes of coal by 2030.
Officials said the initiative would strengthen India’s energy security and reduce dependence on imports of products such as LNG, urea, ammonia and methanol.
Incentives for New Coal Gasification Projects
According to the government, the scheme will incentivise new surface coal and lignite gasification projects for production of syngas and downstream products.
The programme targets gasification of around 75 million tonnes of coal and lignite.
Financial incentives of up to 20 per cent of plant and machinery costs will be provided through a competitive bidding process.
The government said incentives for a single project would be capped at Rs 5,000 crore, while total incentives for a single entity group would not exceed Rs 12,000 crore.
Officials added that the scheme was technology-agnostic, although indigenous technologies would be encouraged.
Government Extends Coal Linkage Tenure
In a major policy reform, the Centre also extended coal linkage tenure up to 30 years under the “Production of Syngas leading to Coal Gasification” category in the non-regulated sector linkage framework.
The move is expected to provide long-term investment certainty for companies entering the coal gasification sector.
The government said the new scheme would complement earlier initiatives under the National Coal Gasification Mission launched in 2021.
Focus on Energy Security and Jobs
Officials said the scheme could mobilise investments worth Rs 2.5 lakh crore to Rs 3 lakh crore.
The government expects the programme to create around 50,000 direct and indirect jobs across 25 projects, especially in coal-bearing regions.
Authorities said India’s import bill for products such as LNG, ammonia, methanol and coking coal stood at nearly Rs 2.77 lakh crore in FY2025.
The Centre said expanding domestic coal gasification capacity would help India reduce exposure to global price volatility and geopolitical supply disruptions.
The government also expects annual revenue generation of around Rs 6,300 crore from utilisation of 75 million tonnes of coal under the scheme.
