https://indianmasterminds.com

ADVERTISEMENT
ADVERTISEMENT

What is India’s ₹37,500 Cr Coal Gasification Scheme? Key Benefits Explained

The Union Cabinet has approved a ₹37,500 crore Coal Gasification Scheme to promote clean coal use, reduce imports, improve energy security, and create thousands of jobs across India.
PM-SETU Scheme
Indian Masterminds Stories

New Delhi: India has taken a major step towards clean coal use and energy independence with the approval of the Coal Gasification Scheme worth ₹37,500 crore. The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the new scheme to promote surface coal and lignite gasification projects across the country. The main goal is to reduce India’s dependence on imported fuels and chemicals while increasing domestic production through coal gasification technology.

What is the Coal Gasification Scheme?

The new scheme aims to convert coal and lignite into syngas (synthetic gas). This gas can be used to produce:

  • Methanol
  • Ammonia
  • Urea
  • Synthetic Natural Gas (SNG)
  • Chemicals and fuels

Read also: Ministry Of Coal Alignment with the Idea of Net Zero Carbon Emission – Panchamrit

The government wants to gasify nearly 75 million tonnes of coal/lignite under this scheme. India has also set a national target of gasifying 100 million tonnes of coal by 2030.

Key Highlights of the Coal Gasification Scheme 

Financial Support

  • Total outlay: ₹37,500 crore
  • Incentive up to 20% of plant and machinery cost
  • Funds will be released in 4 stages linked to project progress
  • Maximum incentive per project: ₹5,000 crore
  • Maximum support per entity group: ₹12,000 crore

Long-Term Coal Linkage

The government has extended coal linkage tenure up to 30 years under the Non-Regulated Sector framework. This will provide long-term policy stability for investors and industries.

Why is Coal Gasification Scheme Important?

Reduce Import Dependence

India imports large amounts of:

  • LNG
  • Methanol
  • Ammonia
  • Urea

The government says domestic coal gasification can help reduce these imports and save foreign exchange.

Strengthen Energy Security

Global fuel prices and geopolitical tensions have increased concerns over energy security. The scheme aims to make India more self-reliant under the Atmanirbhar Bharat initiative.

Boost Investment and Jobs

The government expects:

  • Investment worth ₹2.5 lakh crore to ₹3 lakh crore
  • Around 50,000 direct and indirect jobs
  • Growth in coal-bearing regions and industrial areas

India’s Coal Reserves and Future Plans

India has one of the world’s largest coal reserves:

  • Around 401 billion tonnes of coal
  • Around 47 billion tonnes of lignite

Coal currently contributes more than 55% of India’s energy mix. The government believes coal gasification can help use these resources more efficiently and create value-added products domestically.

How Coal Gasification Works

Coal gasification converts coal into a cleaner-burning gas called syngas. This gas can then be used in:

  • Fertilizer production
  • Power generation
  • Petrochemicals
  • Hydrogen production
  • Industrial fuel applications

Compared to traditional coal burning, gasification is considered a cleaner and more efficient use of coal resources.

Government’s Bigger Vision

The new approval builds on earlier efforts under the National Coal Gasification Mission 2021 and the earlier ₹8,500 crore incentive scheme announced in 2024. According to the Ministry of Coal, several projects are already under implementation.

Read also: Ministry of Coal Unveils New Incentives to Supercharge Underground Mining in India


Indian Masterminds Stories
Join our WhatsApp Channel
ADVERTISEMENT
ADVERTISEMENT
Related Stories
ADVERTISEMENT
ADVERTISEMENT
NEWS
Dam
Bihar to Develop 29 Dams and 247 Ponds into Eco-Tourism Destinations with Private Investment
Rail Vikas NIgam Limited RVNL
RVNL Appoints Suyash Trivedi as Executive Director (Civil) to Boost Railway Infrastructure Projects 
HUDCO Odisha
HUDCO Signs MoU with Odisha Govt for ₹1 Lakh Crore Urban Infrastructure and Housing Projects
NTPC Bongaigaon
NTPC Bongaigaon Signs MoA with Zankla Foundation to Launch Project SRIJAN for Artisan Empowerment
Concor
CONCOR Q1 FY27 Throughput Rises 8.89% YoY to 14.04 Lakh TEUs, EXIM Volumes Grow 9.78%
hemant cm
CM Hemant Soren Unveils Major Higher Education Reforms with AI Courses, CBT Centres and Technical Upgrades
BEL Defence Orders BEL
BEL Secures ₹572 Crore New Orders Across Defence Electronics and Strategic Solutions
AI Champions Programme
ITDC, SCOPE and LBSNAA Launch AI Champions Programme to Strengthen Digital Governance Skills
ADVERTISEMENT
ADVERTISEMENT
Videos
Pulkit Khare
How Uttar Pradesh Is Preparing Its Youth for the AI Revolution
Haryana Leads India's First AI-Powered Bird Census
Haryana Leads India's First AI-Powered Bird Census
Divyanshu patel
How A Single-Minded Devotion of Divyanshu Patel Transformed Moradabad
ADVERTISEMENT
UPSC Stories
Tania Mishra IA&AS
Why Tania Mishra Chose IA&AS After Serving as a CISF Assistant Commandant
Tania Mishra cracked UPSC CSE 2023 with AIR 269 after serving as a CISF Assistant Commandant. Read her...
bhoopendra
Bhoopendra Dhakad: Raised in a Farming Family, Educated at IIT, Chosen by UPSC
IIT Kanpur graduate Bhoopendra Dhakad secured UPSC CSE 2025 AIR 494 after four attempts, overcoming setbacks...
ChatGPTImageJul62026at03_08_06P-2
Balancing Job & Dreams: How Jasmeet Kaur Turned Her Father's Dream into Reality with Rank 1 in UK PCS-2024
Jasmeet Kaur secured Rank 1 in the UKPSC-2024 examination after balancing her duties as a District Social...
CSR NEWS
MCL
MCL Invests ₹375.87 Crore in Odisha CSR Projects to Drive Healthcare, Education and Community Growth
Coal India Subsidiary Focuses on Healthcare, Education, Livelihood Support and Sustainable Growth Through...
SECL Ke Sushrut Gazette Notification
SECL’s ‘SECL Ke Sushrut’ Becomes First Coal PSU CSR Scheme to Get Gazette Notification
Ministry of Coal enables Aadhaar authentication for SECL’s flagship NEET coaching initiative, enhancing...
NMDC
NMDC Develops Modern Community Infrastructure in Panna Under CSR Programme for Rural Growth
New Facilities Promote Fitness, Sanitation and Inclusive Public Spaces, Strengthening Sustainable Development...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
Latest
Dam
Bihar to Develop 29 Dams and 247 Ponds into Eco-Tourism Destinations with Private Investment
Rail Vikas NIgam Limited RVNL
RVNL Appoints Suyash Trivedi as Executive Director (Civil) to Boost Railway Infrastructure Projects 
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
Videos
Pulkit Khare
Haryana Leads India's First AI-Powered Bird Census
Divyanshu patel
ADVERTISEMENT
ADVERTISEMENT