May 31, 2026 - In a road­show pro­mot­ing sur­face coal gas­i­fic­a­tion, Union Coal and Mines Min­is­ter G. Kishan Reddy said the tech­no­logy, which can also yield a range of down­stream products, has the poten­tial to sub­sti­tute imports worth up to 3 lakh crore. To encour­age coal gas­i­fic­a­tion, the Union Cab­inet approved a 37,500­ crore incent­ive pack­age.

What is coal gas­i­fic­a­tion

Coal gas­i­fic­a­tion entails the con­ver­sion of coal into syn­thetic gas, or syn­gas, which can be fur­ther used to pro­duce down­stream products such as urea, meth­anol, ammonium nitrate, syn­thetic nat­ural gas (SNG), hydro­gen, ether, and dimethyl, among oth­ers.

Accord­ing to gov­ern­ment data, India pos­sesses approx­im­ately 401 bil­lion tonnes of coal and about 47 bil­lion tonnes of lig­nite. The rationale behind coal gas­i­fic­a­tion is greater util­isa­tion of these resources besides put­ting in place a sus­tain­able min­ing method to pro­duce the down­stream products. This, the gov­ern­ment believes, will reduce import depend­ence.

The high­ash con­tent of Indian coal also dif­fer­en­ti­ates the gas­i­fic­a­tion tech­no­logy that could be employed in India from that in other coun­tries such as China, Aus­tralia, or the U.S.

Accord­ing to the Union Coal Min­istry, India imports one­fifth of its urea require­ment, almost its entire ammo­nia require­ment, and approx­im­ately 80­90% of its meth­anol require­ment.

The Min­istry has set itself a tar­get of gas­i­fy­ing 100 mil­lion tonnes of coal by 2030. With the recently announced scheme in place, the gov­ern­ment aims to sup­port the gas­i­fic­a­tion of about 75 mil­lion tonnes of coal and/or lig­nite to reach its 2030 tar­get.

Where does India stand with coal gas­i­fic­a­tion at present

Before the 37,500­crore pack­age was announced this year, the gov­ern­ment had approved an 8,500 crore pack­age in Janu­ary 2024. Of this, 6,233 crore has been dis­bursed to eight projects owned by private sec­tor and pub­lic­sec­tor under­tak­ings. These include projects being executed through sep­ar­ate joint ven­tures of Coal India with Bharat Heavy Elec­tric­als and Gas Author­ity of India Ltd, and as well as Coal India’s own project in West­ern Coalfields. Private­sec­tor par­ti­cipants include com­pan­ies such as Jin­dal Steel and Greta Energy and Metal.

The Tal­cher Coal­based Ammo­nia­urea com­plex is expec­ted to be com­mis­sioned in FY2027­28. The oth­ers that include con­ver­sion of coal to syn­gas, ammonium nitrate, dir­ect reduced iron, eth­anol, and hydro­gen are expec­ted to be com­mis­sioned in FY2029­30. In April this year, in response to a query from The Hindu, the Min­istry had stated that “in the com­ing months, more projects are expec­ted to be sanc­tioned”.

Where does India stand with respect to the tech­no­logy for coal gas­i­fic­a­tion

Large­scale com­mer­cial deploy­ment of gas­i­fic­a­tion in India hinges on nav­ig­at­ing issues such as the high ash con­tent of coal, vari­ab­il­ity in its gross cal­or­ific value, and the pres­ence of com­plex min­eral mat­ter, all of which can impede the gas­i­fic­a­tion pro­cess. This is why flu­id­ised­bed gas­i­fic­a­tion is con­sidered par­tic­u­larly suit­able for Indian coal. The tech­no­logy util­ises a gas stream that lifts the coal out of ash, there­after gas­i­fy­ing it with heat.

The high­ash con­tent of Indian coal also dif­fer­en­ti­ates the gas­i­fic­a­tion tech­no­logy that could be employed in India from that in other coun­tries such as China, which is the world leader in gas­i­fic­a­tion, Aus­tralia, or the U.S.

Another aspect relates to the adequate pres­ence of indi­gen­ous tech­no­logy. By their very nature, coal gas­i­fic­a­tion projects are highly cap­ital­intens­ive and involve long gest­a­tion peri­ods. Accord­ing to inde­pend­ent research by the Chintan Research Found­a­tion (pub­lished March 2026), “Recent techno­eco­nomic assess­ments of cir­cu­lat­ing flu­id­ised bed gas­i­fi­ers in the Indian con­text indic­ate that cap­ital costs con­sti­tute the largest share of syn­gas pro­duc­tion costs, account­ing for nearly 30% of the total pro­duc­tion costs.” Thus, fin­an­cial viab­il­ity becomes par­tic­u­larly imper­at­ive. It is for this reason that the latest pack­age, which provides fin­an­cial incent­ives amount­ing to one­fifth of plant and machinery costs, is essen­tial.

For per­spect­ive, state­owned Bharat Heavy Elec­tric­als Ltd has developed their pres­sured flu­id­ised bed gas­i­fier tech­no­logy tailored spe­cific­ally to handle the high ash con­tent and vari­ab­il­ity of Indian coal. Addi­tion­ally, accord­ing to Niti Aayog, its 16 facil­it­ies are cap­able of pro­du­cing all the crit­ical com­pon­ents required for gas­i­fic­a­tion. In the private sec­tor, Jin­dal Steel Ltd and Greta Energy and Metal have been able to indi­gen­ise about 80–90% of their pro­duc­tion. Naveen Ahlawat, Head of Sus­tain­ab­il­ity and Decar­bon­isa­tion at Jin­dal Steel, said: “It (indi­gen­ising tech­no­logy) will save costs; your project cost will come down by 30­40%.”

At its matur­ing stages, coal gas­i­fic­a­tion may still require tech­no­lo­gical imports. It for this reason that industry has also sought the gov­ern­ment’s con­sid­er­a­tion of exemp­tions from pro­vi­sions of the Depart­ment for Pro­mo­tion of Industry and Internal Trade for acquir­ing neces­sary tech­no­lo­gies, espe­cially from China. Offi­cials said that the Min­istry would sup­port par­ti­cipants in secur­ing clear­ances for tech­no­logy imports, though the reg­u­lat­ory require­ment will con­tinue.