By Fred Wang

September 1, 2020 - The Indian government granted a concession of 20% on coal revenue share for gasification in a step toward using cleaner sources of fuel, with a target to gasify 100 million mt of coal by 2030, the country's Ministry of Coal said in a statement on Aug. 31.

Coal gasification is the process of producing syngas, a mixture of hydrogen, CO2 and other compounds.

"Coal gasification and liquefaction is no longer an aspiration, but a requirement," said Pralhad Joshi, Indian minister of coal and mines.

Coal gasification is a way to boost the production of synthetic natural gas, energy fuel, urea for fertilizers, and production of other chemicals, the statement said.

"Coal gasification will help to harness the nation's reserves for maximum utilization while heading on the path towards energy sustainability," said the Ministry.

With coal's proportion in the global energy mix to remain at around 20%-25% through the next decade, according to Platts Analytics, the cheapest and most easily available form of fuel still remains an important baseload power supply for many industries.

The Indian government is trying to reduce import dependence on thermal coal in the next few years to save on foreign exchange.

To achieve this objective, it recently started auctioning of coal blocks for commercial mining to increase the domestic output.

Coal India, a state-owned coal mining company, produced 602 million mt of coal in the fiscal year to March 31, down 0.8% from a year ago, marginally missing its 660 million mt output target.

Its target for the current fiscal year is to produce 710 million mt of coal.