Coal Ministry Promotes Surface Coal Gasification Projects

The Union Cabinet approved a Scheme for Promotion of Surface Coal and Lignite Gasification Projects on 18 June 2026 with an outlay of ₹37,500 crore. The scheme covers coal gasification and lignite gasification projects in India and follows an earlier incentive scheme of ₹8,500 crore approved in January 2024.

Surface Coal Gasification

Surface coal gasification is an industrial process that converts coal into synthesis gas, also called syngas, through controlled reaction with oxygen, steam, or air. Syngas is used as a feedstock for methanol, hydrogen, synthetic natural gas, ammonia, urea, and sustainable aviation fuel.

Government Support and Project Pipeline

The January 2024 incentive scheme has 8 projects under implementation with incentives of ₹6,233 crore. Coal gasification projects worth more than ₹65,000 crore are under execution in India, and the government has projected nearly 25 projects by 2030 with total investments of about ₹2.5–3 trillion.

Roadshows and State Participation

The Ministry of Coal organised its third roadshow on the scheme in Mumbai on 18 June 2026. Earlier roadshows were held in New Delhi and Hyderabad, and Maharashtra has 5 projects under development with support from Western Coalfields Ltd and state policy measures.

Important Facts for Exams

• India has coal reserves of more than 400 billion tonnes.
• The target for coal gasification in India is 100 million tonnes by 2030.
• Coal gasification can produce methanol, urea, ammonia, hydrogen, and synthetic natural gas.
• Imports of LNG, urea, ammonia, and methanol were valued at about ₹2.77 lakh crore in FY2025.

Energy Security and Import Substitution

Coal gasification is used in India to reduce dependence on imported fuels, fertilisers, and chemical feedstock. The scheme is linked to domestic production of value-added products from coal and lignite.