Coal Gasification Project Encourages Investment

Summary of Coal Gasification Incentive Scheme

Overview: The first phase of the Coal and Lignite Gasification Incentive Scheme has concluded with significant industry response, receiving seven applications from major corporations and public sector enterprises. The scheme, with a budget of ₹37,500 crore, aims to promote coal gasification as a key element of India's energy security and industrial development strategy.

Key Facts:

• Total Budget: ₹37,500 crore for the scheme.
• Applications Received: 7 from leading companies including:
  • Adani Enterprises (3 projects for Urea)
  • Galent Steel (Direct Reduced Iron and Syngas)
  • NTPC Limited (Synthetic Natural Gas)
  • Shyam Steel and Power Limited (Syngas)
  • Talcher Fertilizers Limited (Urea)

Government Initiatives:

• Cabinet Approval: The scheme was approved on May 13, 2026, under the leadership of Prime Minister Narendra Modi.
• National Goals: Aiming for 100 million tons of coal gasification capacity by 2030, with 75 million tons targeted through this scheme.
• Investment Potential: Estimated investment of ₹2.5-3 lakh crore and creation of significant direct and indirect employment opportunities.

Context and Importance:

• The scheme is part of a broader National Coal Gasification Mission, which includes an ongoing ₹8,500 crore financial incentive plan for eight existing projects.
• The initiative seeks to reduce India's dependency on imports of LNG, urea, ammonia, and methanol, which amounted to approximately ₹2.77 lakh crore in the fiscal year 2024-25.
• The coal gasification projects are capital-intensive and require comprehensive pre-feasibility studies, technology assessments, and environmental considerations.

Next Steps:

• The applications received will undergo detailed evaluation based on the scheme's guidelines and Request for Proposals (RFP).
• The second phase of the scheme is set to commence on September 8, 2026, with a regular application process every two months to allow continued industry participation.

Commitment to Technology and Environment:

• The Ministry is committed to accelerating the development of coal gasification technologies, enhancing energy security, promoting import substitution, and positioning India as a global leader in clean coal technologies.

This summary encapsulates the critical aspects of the coal gasification initiative, highlighting its significance for India's energy strategy and industrial growth.