Union Cabinet approved a ₹37,500 crore
scheme to promote surface coal/lignite gasification projects
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Union Cabinet approved a
₹37,500 crore scheme on 13 May 2026 to promote surface coal/lignite
gasification projects.
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The scheme covers coal
and lignite gasification projects.
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It includes financial
incentives, project selection through competitive bidding, and a
milestone-based disbursement mechanism.
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Coal gasification is a
process in which coal or lignite is converted into synthesis gas (syngas).
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Syngas mainly contains
carbon monoxide, hydrogen, carbon dioxide, methane, and water vapour.
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Syngas is used as an
intermediate raw material for the production of chemicals, fertilizers, fuels,
and industrial gases.
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The scheme aims to
promote the gasification of around 75 million tonnes of coal and lignite.
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It targets investments
worth ₹2.5–3 lakh crore.
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The scheme is expected to
generate around 50,000 jobs.
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India’s national target
for coal gasification is 100 million tonnes by 2030.
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Financial incentives will
be limited to a maximum of 20% of plant and machinery costs.
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The maximum incentive
limit per project has been fixed at ₹5,000 crore.
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Except for synthetic
natural gas and urea, the incentive ceiling per product is ₹9,000 crore.
The incentive limit for each group of entities has been fixed at ₹12,000 crore
