Promotion of coal gasification and clean coal technologies

Key Highlights:

• The National Coal Gasification Mission targets achieving 100 Million Tonnes (MT) of coal gasification capacity by 2030.
• Approximately 22.6 Million Tonnes Per Annum (MTPA) of coal gasification capacity is currently operational or under implementation.
• A new scheme for Promotion of Surface Coal/Lignite Gasification Projects, approved on 13.05.2026, has a financial outlay of ₹37,500 crore.
• This new scheme is expected to utilize approximately 75 MTPA of coal, significantly contributing to the 2030 target.
• An earlier ₹8,500 crore Financial Incentive Scheme, approved on 24.01.2024, supports eight coal gasification projects.

Detailed Insights:

• The government provides financial incentives, coal linkage support, and policy support to promote coal gasification projects.
• Financial incentives include 15% of capex under the ₹8,500 crore scheme and up to 20% of eligible Plant and Machinery cost under the ₹37,500 crore scheme.
• Coal linkage support facilitates availability through auction for "production of Syngas leading to coal gasification" at power sector floor price, with a 30-year tenure.
• Policy support includes a 50% rebate in revenue share for coal used for gasification and a framework for Underground Coal Gasification (UCG).
• For UCG, the floor price for coal block auction has been reduced to 2% from 4%, with waiver of upfront payment and 50% rebate on Performance Bank Guarantee.
• Coal gasification enables cleaner, value-added utilization of domestic coal for products like synthetic natural gas, chemicals, and fertilizers.
• These initiatives aim to strengthen energy security, promote import substitution, attract investments, and generate employment.
• Upon commissioning, projects under these schemes are expected to achieve import substitution of about ₹1.5 lakh crore annually.
• India, during its BRICS Chairmanship, organized an event on Clean Coal Technologies focusing on coal gasification to exchange knowledge.

Key Concepts Involved:

• Coal Gasification: A process that converts coal into a gaseous mixture called Syngas, which can be used as fuel or a chemical feedstock.
• Syngas: A mixture primarily consisting of carbon monoxide and hydrogen, produced from coal gasification, used for energy or chemical synthesis.
• Underground Coal Gasification (UCG): An in-situ process to convert unmined coal into Syngas by injecting oxidants and extracting the gas from boreholes.