Parliamentary panel bats for structured timeline for coal gasification

A Parliamentary panel has recommended a host of measures, including chalking out a detailed and structured timeline, to achieve the ambitious 100 million tonnes (MT) of coal gasification target by 2030. 

 

Coal gasification involves extracting methane from coal during the mining process and utilising it for commercial purposes.

 

The Parliamentary Standing Committee on Coal, Mines and Steel, in its fourth report on demands for grants for financial year 2026 (FY26) on Wednesday, recommended establishing a detailed, structured timeline for the Coal Gasification Scheme by defining clear, time-bound milestones to achieve the 2030 target. 

 

This plan should incorporate specific targets for incremental capacity additions over 1 to 2-year intervals and mandate regular performance audits and environmental impact assessments on a quarterly or biannual basis, it said.  

 

Last year, the Union Cabinet approved financial incentives for the long-awaited scheme. The Cabinet approved ~8,500 crore financial incentive for gasification projects in three categories. 

 

An overarching scheme for coal gasification has been in the works for more than 15 years but was embroiled in revenue share tussle between the ministry of coal and petroleum and natural gas.

 

However, with the ambit now clearly marked and coal PSUs planning coal gasification projects, the Centre has received requests for viability gap funding.

 

National miner Coal India Ltd has already formed joint ventures with manufacturing major Bharat Heavy Electronics Ltd (BHEL) and state-owned gas utility GAIL Ltd to tap into potential of coal gasification and its supply. 

 

Since Coal Gasification is considered as an ideal process to pair with carbon capture, utilisation and storage (CCUS) technologies, it is also recommended to strengthen links between coal gasification, green hydrogen and carbon capture initiatives. 

 

Monitoring expenditure 

 

The committee also recommended strengthening of quarterly expenditure plan (QEP) monitoring. 

 

The panel said that despite the structured quarterly utilisation of the central sector for FY25, some schemes like Conservation Safety and Infrastructure Development in coal mines faced budget reductions at the Revised Estimate (RE) stage due to slower spending in initial quarters. 

 

The total allocation for Central Sector Schemes in RE 2024-25 was ~800 crore, of which around ~606 crore had been utilised as of February 12. The ministry re-appropriated a total of ~120.55 crore, out of which ~56.36 crore has been re-appropriated to meet additional demand. Further, ~64.19 crore has been re-appropriated from non-functional head to functional head for utilisation in north-eastern region Sikkim. 

 

“The committee, thus, recommends strengthening of quarterly monitoring and financial tracking to discourage re-appropriation of funds and ensure more consistent fund utilisation. Project planning and execution timelines may also be improved in order to ensure uniform distribution of funds for each quarter. At the same time, re-appropriation of funds within different heads should be avoided for expenditures that are foreseeable and to meet day-to-day expenditure,” the report read.

 

As the R&D projects of the Ministry of Coal cover thematic areas like productivity, safety in coal mines, coal beneficiation, protection of environment, clean coal technology etc., the committee suggested that those should also be linked to the coal gasification scheme, which is at its nascent stage at present and focus on research areas that improve the cost-effectiveness and efficiency of coal gasification technology, researching improved gasification technologies, studying methods to enhance the quality of coal by removing impurities and conducting pilot projects on smaller scales to test and validate new coal gasification technologies. 

 

The Committee, therefore, recommended the ministry to explore the feasibility of giving priority and certain benefits or incentives to R&D projects that focus on the coal gasification scheme so as to yield desired results.