Govt to launch ₹8,500 cr scheme, coal block policy for gasification

The government will roll out an Rs 8,500 crore incentive scheme and a dedicated coal block allocation framework to promote gasification, with private and foreign players showing interest

In a major push for the coal gasification industry, the government is planning to launch a special Rs 8,500 crore incentive scheme along with a policy framework dedicated to allocating coal blocks for the sector, coal ministry officials said on Friday.

 

Speaking at an industry event, Additional Secretary in the Ministry of Coal, Sanoj Kumar Jha, said the government would launch a “much larger” incentive scheme in addition to the financial incentive programme for coal gasification announced in January 2024, which had an outlay of Rs 8,500 crore.

 

Jha said industry interest in coal gasification had been encouraging, with joint ventures such as Coal India–Bharat Heavy Electricals Limited (BHEL) and Coal India–Gas Authority of India Limited (GAIL) already in place. “Several foreign companies are showing interest as they see potential in coal gasification,” he said, adding that while the government could create the enabling framework, it would be for the private sector to take it forward.

 

At the same event, Additional Secretary Rupinder Brar said the ministry was preparing a structured framework for allocating coal blocks specifically for gasification and was coordinating with multiple agencies to ensure a robust regulatory environment.

 

“We have crafted a framework for coal blocks dedicated to gasification,” she said in her address at the event on Coal Gasification – Surface and Underground Technologies, organised by the Ministry of Coal and the Federation of Indian Chambers of Commerce and Industry (FICCI).

 

She added that the ministry was working closely with the Directorate General of Hydrocarbons, the Central Ground Water Authority, and the Ministry of Environment, Forest and Climate Change (MoEFCC) to ensure the framework was comprehensive and implemented with integrity.

 

Coal gasification converts coal into synthetic gas, or syngas, which can be used to produce downstream products such as fertilisers, methanol, and synthetic natural gas. It is considered a cleaner use of coal compared to traditional burning.