Govt aims 100 mt coal gasification

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₹6,000 crore, to promote coal and lignite gasification projects for both public sector undertakings (PSUs) and the private sector. Mint first wrote about the government’s plan for a ₹6,000 crore VGF (viability gap funding) for coal gasification. “The adoption of gasification technology in India will revolutionize the coal sector, reducing reliance on imports of natural gas, methanol, ammonia and other essential product," the ministry said.

Currently, India imports around half of its natural gas, most of its methanol and 13-15% of its total ammonia requirement. Coal gasification will contribute to India’s vision of becoming self-reliant and create a surge in job opportunities, the statement said. Coal gasification is expected to make significant contribution to India’s development by reducing imports by 2030.

This initiative holds the potential to alleviate the environmental burden by reducing carbon emissions and fostering sustainable practices, contributing to India’s global commitments towards a greener future, the statement added. The selection of entities for the gasification scheme will be carried out through a competitive and transparent bidding process. The selection PSUs and private sector companies for budgetary support for gasification projects will be done through a tariff-based bidding process, with criteria formulated in consultation with NITI Aayog, the government think-tank.

The ministry is also considering an incentive to reimburse GST compensation cess on coal utilized in gasification projects. Furthermore, the Ministry highlighted collaborative efforts in advancing Surface Coal Gasification (SCG) projects across Coal India Limited (CIL) coalfields. In October 2022, strategic bilateral agreements were