World
India approves $3.9 billion plan to boost coal gasification and cut fuel imports
Government targets synthetic gas production to reduce LNG dependence and expand domestic energy use
Coal gasification is also being explored by other major economies, including the United States and China, as part of efforts to lower emissions while maintaining energy security. Picture used for illustrative purpose.
New Delhi: India’s cabinet has approved a 375 billion rupee ($3.92 billion) scheme to promote coal gasification projects aimed at reducing reliance on imported fuels and expanding cleaner industrial use of domestic coal, Information Minister Ashwini Vaishnaw said.
The initiative is designed to convert coal into synthetic gas, which can be used for power generation, fertilisers, petrochemicals, and other industrial applications. The move is expected to cut imports of liquefied natural gas (LNG), urea, ammonia, and methanol, particularly as India’s gas supplies have been affected by the ongoing Middle East crisis.
Coal gasification is also being explored by other major economies, including the United States and China, as part of efforts to lower emissions while maintaining energy security.
India, which holds one of the world’s largest coal reserves — estimated at 401 billion tonnes, along with 47 billion tonnes of lignite — aims to gasify about 75 million metric tonnes of coal annually under the plan. The scheme is expected to attract investments of around 3 trillion rupees.
As part of the programme, the government will provide financial support covering approximately 20 percent of the cost of plant and machinery. Interest in the sector is increasing among power producers, with state-run NTPC planning to enter the coal gasification business and target production of 5 million to 10 million tonnes of synthetic gas annually over the next three to four years.
The new initiative builds on an earlier coal gasification incentive scheme worth 85 billion rupees approved in 2024.