COAL GASIFICATION TARGETS

Key Highlights:

• India has set an ambitious target to achieve 100 Million Tonnes (MT) of coal gasification capacity by 2030.
• Currently, approximately 22.6 Million Tonnes Per Annum (MTPA) of coal gasification capacity is operational or under implementation.
• A new scheme with a financial outlay of ₹37,500 crore was approved on May 13, 2026, to promote surface coal/lignite gasification projects.
• This new scheme is expected to utilize approximately 75 MTPA of coal, significantly contributing to the national target.
• It offers financial incentives of up to 20% of the eligible Plant and Machinery cost, an increase from the previous ₹8,500 crore scheme's 15% capex incentive.

Detailed Insights:

• The National Coal Gasification Mission aims to enhance India's energy security and reduce reliance on imported fuels.
• Operational capacity includes Jindal Steel Limited (JSL), while Talcher Fertilisers Limited (TFL) is under implementation.
• The government is strengthening the incentive framework to attract greater private and public sector investment in this sector.
• Coal gasification facilitates the production of valuable products like coal-to-chemical, methanol, and Synthetic Natural Gas (SNG).
• This initiative is supported by measures such as facilitating coal availability, strengthening regulatory support, and promoting indigenous technologies.
• The increased financial incentive under the new scheme is designed to accelerate the establishment of new gasification projects.

Key Concepts Involved:

• Coal Gasification: A process that converts coal into a synthetic gas (syngas) containing hydrogen, carbon monoxide, and carbon dioxide.
• Synthetic Natural Gas (SNG): A fuel gas primarily composed of methane, produced from coal gasification, serving as a substitute for natural gas.
• Financial Incentive Scheme: Government programs offering monetary benefits to encourage investment and development in specific sectors.