Coal Gasification and Clean Coal Technologies Promotion
UPSC / SSC current affairs note · IR
Why in news
The government has approved a new scheme with an outlay of ₹37,500 crore to promote surface coal/lignite gasification projects, aiming to achieve 100 million tonnes of coal gasification capacity by 2030. This was informed by the Minister of State for Coal and Mines in a Rajya Sabha written reply on 27 July 2026.
Background
India has significant coal reserves and aims to reduce import dependence by promoting cleaner utilization of coal through gasification. The National Coal Gasification Mission targets 100 MT capacity by 2030. Earlier, a scheme of ₹8,500 crore was approved on 24 January 2024 for coal/lignite gasification incentives.
Key facts
National Coal Gasification Mission targets 100 million tonnes (MT) coal gasification capacity by 2030.
As of now, about 22.6 million tonnes per annum (MTPA) coal gasification capacity is operational or under implementation.
Operational/under-implementation projects include Jindal Steel Ltd (8 MTPA, operational), Talcher Fertilizers Ltd (2.6 MTPA, under implementation), and 8 projects under the ₹8,500 crore scheme (about 12 MTPA, under implementation).
A new scheme with ₹37,500 crore outlay was approved on 13 May 2026 to incentivize surface coal/lignite gasification projects, expected to utilize about 75 MT of coal per year.
Under the ₹8,500 crore scheme (24 Jan 2024), 8 projects were approved; JSL project has achieved financial closure and construction is ongoing; five projects have been inaugurated and are in various stages.
Financial incentives: up to 15% of capex under ₹8,500 crore scheme and up to 20% of eligible plant & machinery cost under ₹37,500 crore scheme.
Coal linkage support: new sub-sector 'production of syngas for coal gasification' introduced at floor price equivalent to power sector; linkage period extended to 30 years.
Policy support: 50% concession in revenue share for coal used for gasification; framework for underground coal gasification (UCG) issued; floor price for UCG blocks reduced from 4% to 2%.
On 24 June 2026, Ministry of Coal organized a BRICS engagement on clean coal technology focusing on coal gasification.
Upon commissioning of projects under both schemes and Talcher Fertilizers, import substitution from coal/lignite gasification is expected to be about ₹1.5 lakh crore per year.
Prelims pointers
- National Coal Gasification Mission
- ₹8,500 crore scheme (24 Jan 2024)
- ₹37,500 crore scheme (13 May 2026)
- Talcher Fertilizers Ltd (TFL)
- Jindal Steel Ltd (JSL)
- Underground Coal Gasification (UCG)
- BRICS engagement on clean coal technology (24 June 2026)
- Ministry of Coal
- Synthetic Natural Gas (SNG)
Mains angles
- Discuss the role of coal gasification in India's energy security and import substitution.
- Critically examine the government's initiatives to promote clean coal technologies and their environmental implications.
- Analyze the challenges and opportunities in achieving the 100 MT coal gasification target by 2030.