Govt plans 100 mt coal gasification by 2030 with ₹6,000 crore scheme
₹6,000 crore is under consideration to promote coal and lignite gasification projects for both government Public Sector Undertakings (PSUs) and the private sector, as per a recent ministry announcement. Mint first wrote about the government’s plan for a ₹6,000 crore viability gap funding for coal gasification. The ministry believes that adopting gasification technology will transform India's coal sector and decrease its dependence on imported natural gas, methanol, ammonia and other key products.
As it stands, India imports about 50% of its Natural Gas, over 90% of its Methanol consumption and roughly 13-15% of its total Ammonia consumption to meet domestic demand. The deployment of coal gasification will support India's 'Aatmanirbhar' vision, stimulate job creation and significantly reduce imports by 2030.
Moreover, it presents a solution for environmental concerns, promising to lower carbon emissions and promote sustainable practices, aligning with worldwide commitments towards a greener future. The government is also planning to extend budgetary support to eligible Government PSUs and the Private Sector, enabling them to undertake coal gasification projects.
A tariff-based competitive bidding process, devised in conjunction with NITI Aayog, will determine the selection of at least one project in each segment. Support is also being considered for pilot projects using indigenous technology or small-scale product-based gasification plants.
Moreover, the ministry is contemplating a plan to reimburse the Goods and Services Tax (GST) compensation cess on coal used in gasification projects for a decade after their commercial operational date (COD), assuming that the GST compensation cess is extended beyond FY27. In its
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