<p>New Delhi: The Union Cabinet, chaired by Prime Minister <a href="https://www.deccanherald.com/tags/narendra-modi">Narendra Modi</a>, on Wednesday approved a Rs 37,500 crore incentive scheme to promote surface coal and lignite gasification projects, aiming to reduce India’s heavy dependence on imported LNG, urea, methanol and other key products while bolstering the country’s energy security.</p><p>The scheme will support the gasification of 75 million tonnes of coal and is expected to attract investments of around Rs 2.5 to 3 lakh crore.</p><p>“An outlay of Rs 37,500 crore has been kept for this scheme… projects will be put up for gasifying 75 million tonnes of coal,” Union Minister for Information and Broadcasting Ashwini Vaishnaw told the media.</p><p>Vaishnaw highlighted India’s vast coal reserves of 401 million tonnes, sufficient for the next 200 years, and stressed the need for self-reliance amid the current geopolitical situation.</p><p>“We have to take all decisions to become Atma Nirbhar,” the minister said.</p><p>Coal gasification involves converting coal into synthesis gas (syngas), which can be used to produce methanol, fertilizers, hydrogen, chemicals, and other value-added products. </p><p>The initiative is expected to significantly cut imports — currently, over 50 per cent of LNG, 100 per cent of ammonia, and 80-90 per cent of methanol are imported — and shield the country from global price volatility.</p>.Centre allows for exporting coal up to 50% of received allocation.<p>The scheme will provide a financial incentive of up to 20 per cent of the cost of plant and machinery. Incentives will be disbursed in four equal instalments linked to project milestones. Selection will be done through transparent competitive bidding.</p><p>Key caps under the scheme include: Rs 5,000 crore for any single project, Rs 9,000 crore for any single product (except synthetic natural gas and urea). Rs 12,000 crore for any single entity/group across all projects.</p><p>The government aims to accelerate the national target of gasifying 100 million tonnes of coal by 2030. This builds on the National Coal Gasification Mission (2021) and an earlier Rs 8,500 crore scheme approved in January 2024.</p><p>As part of accompanying reforms, the Centre has extended coal linkage tenure up to 30 years for syngas production projects, providing long-term policy certainty to investors.</p><p>India holds some of the world’s largest coal reserves (401 billion tonnes) and lignite reserves (47 billion tonnes). Coal currently accounts for over 55 per cent of the country’s energy mix. </p><p>The import bill for substitutable products such as LNG, urea, ammonia, methanol and others stood at approximately Rs 2.77 lakh crore in FY25.</p><p>Officials expect the gasification of 75 million tonnes of coal to generate Rs 6,300 crore in annual revenue, in addition to downstream taxes and levies.</p>
<p>New Delhi: The Union Cabinet, chaired by Prime Minister <a href="https://www.deccanherald.com/tags/narendra-modi">Narendra Modi</a>, on Wednesday approved a Rs 37,500 crore incentive scheme to promote surface coal and lignite gasification projects, aiming to reduce India’s heavy dependence on imported LNG, urea, methanol and other key products while bolstering the country’s energy security.</p><p>The scheme will support the gasification of 75 million tonnes of coal and is expected to attract investments of around Rs 2.5 to 3 lakh crore.</p><p>“An outlay of Rs 37,500 crore has been kept for this scheme… projects will be put up for gasifying 75 million tonnes of coal,” Union Minister for Information and Broadcasting Ashwini Vaishnaw told the media.</p><p>Vaishnaw highlighted India’s vast coal reserves of 401 million tonnes, sufficient for the next 200 years, and stressed the need for self-reliance amid the current geopolitical situation.</p><p>“We have to take all decisions to become Atma Nirbhar,” the minister said.</p><p>Coal gasification involves converting coal into synthesis gas (syngas), which can be used to produce methanol, fertilizers, hydrogen, chemicals, and other value-added products. </p><p>The initiative is expected to significantly cut imports — currently, over 50 per cent of LNG, 100 per cent of ammonia, and 80-90 per cent of methanol are imported — and shield the country from global price volatility.</p>.Centre allows for exporting coal up to 50% of received allocation.<p>The scheme will provide a financial incentive of up to 20 per cent of the cost of plant and machinery. Incentives will be disbursed in four equal instalments linked to project milestones. Selection will be done through transparent competitive bidding.</p><p>Key caps under the scheme include: Rs 5,000 crore for any single project, Rs 9,000 crore for any single product (except synthetic natural gas and urea). Rs 12,000 crore for any single entity/group across all projects.</p><p>The government aims to accelerate the national target of gasifying 100 million tonnes of coal by 2030. This builds on the National Coal Gasification Mission (2021) and an earlier Rs 8,500 crore scheme approved in January 2024.</p><p>As part of accompanying reforms, the Centre has extended coal linkage tenure up to 30 years for syngas production projects, providing long-term policy certainty to investors.</p><p>India holds some of the world’s largest coal reserves (401 billion tonnes) and lignite reserves (47 billion tonnes). Coal currently accounts for over 55 per cent of the country’s energy mix. </p><p>The import bill for substitutable products such as LNG, urea, ammonia, methanol and others stood at approximately Rs 2.77 lakh crore in FY25.</p><p>Officials expect the gasification of 75 million tonnes of coal to generate Rs 6,300 crore in annual revenue, in addition to downstream taxes and levies.</p>
