Union Cabinet approved a ₹37,500 crore
scheme promote surface coal and lignite gasification projects in India
¨
Union Cabinet approved a
₹37,500 crore scheme on 13 May 2026 to promote surface coal and lignite
gasification projects in India.
¨
The scheme aims to gasify
100 million tonnes of coal by 2030.
¨
Coal gasification is a
thermochemical process that converts coal into synthesis gas (syngas) by
reacting it with oxygen, steam, or air at high temperatures.
¨
Syngas is a mixture of
carbon monoxide, hydrogen, carbon dioxide, methane, and other gases.
¨
Syngas can be used to
produce methanol, ammonia, synthetic natural gas (SNG), and power.
¨
The scheme provides
financial support of up to 20% of plant and machinery cost for eligible
projects.
¨
Financial assistance is
capped at ₹5,000 crore per project.
¨
Coal linkage tenure for
the gasification sub-sector has been extended to 30 years.
¨
The initiative is
expected to mobilize investments of about ₹4 lakh crore.
¨
It is projected to
generate foreign exchange savings of around ₹3 lakh crore.
¨
The scheme is expected to
create nearly 1 lakh jobs.
¨
Other estimates suggest
investments of ₹2.5–3 lakh crore across about 25 projects.
¨
Coal India Limited is
developing three coal gasification projects.
¨
One major project is
being developed at Lakhanpur, Odisha, with an estimated cost of about ₹20,000
crore.
¨
A separate project in
Bardhaman district, West Bengal, is being developed with GAIL for the
production of Synthetic Natural Gas (SNG).
¨
India’s first underground
coal gasification facility is located at the Kasta West coal block in West
Burdwan district, West Bengal.
¨
The facility is operated
by Eastern Coalfields Limited.
¨
Commercial production
from the underground coal gasification facility is expected to begin around September
2026.
.jpg)