New Delhi: The Ministry of Coal has announced the second round of financial incentives to promote Coal and Lignite Gasification projects across India. This initiative forms a key component of the National Coal Gasification Mission, which aims to gasify 100 million tonnes of coal by 2030, strengthening India’s energy security and industrial self-reliance.
With a remaining budget of ₹2,366.94 crore from the total sanctioned ₹8,500 crore, the Ministry seeks to support projects that convert domestic coal into high-value chemical products, while promoting innovation in clean energy technologies.
Key Project Categories for Incentives
The second round of incentives has been structured under two main categories:
- Category II (Private Sector & PSUs): Targeted at large-scale, commercially viable gasification plants. Both private companies and Public Sector Undertakings (PSUs) are eligible to apply.
- Category III (Demonstration / Small-Scale Plants): Focused on small-scale and demonstration projects that test indigenous technologies or specialized chemical outputs before scaling to commercial levels.
Strategic Objectives of Gasification
The Ministry’s push for coal and lignite gasification aims to achieve multiple strategic goals:
- Import Substitution: Gasification enables the domestic production of chemicals such as Methanol, Ammonia, and Urea, significantly reducing India’s reliance on imports.
- Clean Energy Transition: Gasification is a cleaner alternative to conventional coal combustion, as it allows pollutants like sulfur and mercury to be removed before the gas is utilized.
- Hydrogen Production: The projects have potential for producing “Blue Hydrogen,” supporting India’s shift toward a hydrogen-based economy and meeting global low-carbon energy goals.
Application and Bid Timeline
Interested entities must submit their proposals online via the MSTC e-commerce portal, adhering to the Request for Proposal (RFP) guidelines.
- Bid Submission Deadline: January 28, 2026
- Documentation: RFP documents are available on the Ministry of Coal’s official website and the MSTC portal
- Submission Mode: Online submission through MSTC portal only
The Ministry of Coal has emphasized that the process will be transparent and competitive to ensure selection of high-impact projects that contribute to India’s energy transition and industrial self-reliance.
