Govt to soon auction blocks with coal gasification potential: Official

The government will soon put up for sale coal blocks that have potential for coal gasification, a senior official said on Friday.

The development assumes significance in the wake of the government's plan to gasify 100 million tonnes of coal in the next five years.

"Very soon we would auction the coal blocks that have potential for coal gasification," Coal Additional Secretary Rupinder Brar said on the sidelines of the roadshow on coal gasification jointly organised by the coal ministry and Ficci.

Coal gasification is a process that converts coal into a synthetic gas (syngas), a mixture of gases like carbon monoxide and hydrogen, by reacting it with oxygen and steam at high temperatures.

This syngas can then be used to produce various downstream products, including fertilizers, methanol, and synthetic natural gas, offering a cleaner and more diversified use of coal compared to traditional burning.

These coal blocks would be put up for sale under the commercial coal mining auction, a ministry official said.

Brar also said that the government would soon float a request for proposal for allocating the remaining Rs 2,500 crore under the financial incentive scheme for the coal gasification project.

Under the scheme, around Rs 6,000 crore has already been allocated.

The government last year approved an Rs 8,500 crore financial incentive scheme to promote coal and lignite gasification projects by both government PSUs and private companies, aiming to convert coal into valuable products like synthetic natural gas and chemicals, and reduce reliance on imported products.

The scheme is divided into three categories, with Letters of Award (LOAs) being issued to selected applicants, including joint ventures for coal-to-SNG and coal-to-ammonium nitrate projects.