Centre clears ₹8500 cr gasification scheme as window on coal use narrows
₹8,500 crore viability gap funding (VGF) scheme for coal gasification. In another decision, the cabinet committee on economic affairs (CCEA) also approved an equity investment of ₹3,799.64 crore by Coal India Ltd for setting up coal gasification joint ventures with GAIL (India) Ltd and Bharat Heavy Electricals Ltd (BHEL).
The push to leverage coal resources comes at a time when the Indian economy is projected to grow at 7%, becoming the third largest economy by 2030, with a focus on involving the private sector to reduce carbon emissions. This also assumes importance against the backdrop of the global energy landscape undergoing a transition amid growing climate concerns, and a focus on environmental, social and governance (ESG) investing.
Coal gasification, the process by which coal is turned into fuel gas, is considered as a cleaner option than burning coal. The gas produced through the process can be used to produce gaseous fuels such as hydrogen, methane, methanol and ethanol among others.
The high ash content in Indian coal is also a technical barrier to the larger adoption of coal gasification, according to industry experts. India’s green energy commitments involve reducing carbon emission intensity of its GDP by 45% by 2030 and installing 500 GW of renewable energy capacity during the period.
Addressing the media after the cabinet meeting on Wednesday, union minister for coal, mines and parliamentary affairs, Pralhad Joshi said that the incentive will be provided under three categories—public sector undertakings, private sector and public sector companies, and for small scale and demonstration projects. In September, Mint reported that the Cabinet would consider the VGF scheme with a note being finalized for the
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