Government pushes coal gasification as key to cleaner energy future

THEBUSINESSBYTES BUREAU

NEW DELHI, MAY 20, 2025

In a major stride towards cleaner fuels and sustainable industrial practices, the Ministry of Coal has intensified efforts to promote coal gasification across India. This initiative is part of the government’s broader agenda to transition towards greener technologies and foster long-term, inclusive growth.

Coal gasification is a process that converts solid coal into syngas — a synthetic gas composed primarily of carbon monoxide, hydrogen, and carbon dioxide. The Ministry of Coal described it as a transformative technology that not only unlocks cleaner fuels and essential chemicals like methanol and ammonia but also significantly reduces harmful emissions.

“Coal gasification represents a step toward energy self-reliance and a cleaner industrial future,” the Ministry said in a statement on Tuesday. By utilizing the country’s vast coal reserves in a more environmentally responsible manner, the government aims to reduce its carbon footprint while producing value-added chemical feedstocks and energy sources.

As part of its ambitious roadmap, the government has sanctioned a financial incentive package of ₹8,500 crore to support coal gasification projects. These funds will be available to both public sector undertakings and private sector enterprises.

In a landmark development, Maharatna companies Coal India Limited (CIL) and GAIL (India) Limited have signed a joint venture agreement to establish a Coal to Synthetic Natural Gas (SNG) plant in West Bengal. The facility, to be located in the Raniganj area of Eastern Coalfields Limited, will use surface coal gasification technology to produce 80,000 normal cubic meters (Nm³) per hour of SNG. With an annual capacity of 633.6 million Nm³, the plant will require 1.9 million tonnes of coal annually from CIL.

This collaboration marks a significant milestone in the implementation of the National Coal Gasification Mission, which aims to harness coal’s chemical properties in a cleaner, more sustainable way.

The Ministry also reported progress on several other projects selected under Category II of the incentive scheme. Jindal Steel and Power Limited’s 2 million metric tonnes per annum (MMTPA) coal gasification project in Angul, Odisha, has received ₹569.05 crore in incentives. The ₹3,793 crore project will not only convert coal into Direct Reduced Iron (DRI) but will also feature a carbon capture and utilization plant capable of processing 30 tonnes of CO₂ per day.

In Maharashtra, New Era Cleantech Solution Private Limited has secured ₹1,000 crore in support for its coal gasification facility at Bhadravati in Chandrapur. Greta Energy Limited, also based in Bhadravati, has received ₹414.01 crore in incentives for its ₹2,763 crore project.