Cabinet Clears Rs. 37,500 Cr Coal Gasification Scheme: What It Means for India

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New Delhi, May 14 (APAC Media): India has taken a major step towards cleaner and more efficient use of its coal resources with the Union Cabinet approving a Rs. 37,500 crore scheme to promote surface coal and lignite gasification projects.

The move aims to help India attain energy security by gasifying 100 million tonnes of coal by 2030. It also aims to reduce dependence on imported fuels and chemicals and strengthen domestic manufacturing. The scheme is expected to trigger massive investments, create jobs, and build a stronger indigenous technology ecosystem.

PM Narendra Modi took to X to highlight the significance of the move. He wrote, “The scheme for Promotion of Surface Coal/Lignite Gasification Projects that has been cleared by the Cabinet will further energy security, boost investment and create job opportunities for the youth. It will add strength to our efforts to strengthen the tech and innovation system as well.”

What is coal gasification?

Coal gasification is a process that converts coal or lignite into syngas, a mixture of hydrogen, carbon monoxide, and other gases. This syngas can then be used to produce products such as methanol, ammonia, urea, synthetic natural gas (SNG), and chemicals.

Why has the government launched this scheme?

India imports a large share of critical industrial inputs such as LNG, ammonia, methanol, and urea. The scheme aims to reduce this import dependence by encouraging domestic production using India’s abundant coal reserves. It also supports the goals of Atmanirbhar Bharat and Make in India.

How will companies receive incentives?

Projects will receive financial incentives of up to 20% of the cost of plant and machinery. The support will be released in four equal installments linked to project milestones. Companies will be selected through a transparent competitive bidding process.

What are the expected benefits?

The scheme is expected to mobilise investments worth Rs. 2.5–3 lakh crore and generate nearly 50,000 direct and indirect jobs. It could also help governments earn around Rs. 6,300 crore annually through coal utilisation and related taxes while strengthening India’s indigenous gasification technology capabilities.