India Targets 100 MT Coal Gasification Capacity by 2030: Centre
New Delhi, July 27 (TNT): The Centre has set a target of achieving 100 Million Tonnes (MT) of coal gasification capacity by 2030 under the National Coal Gasification Mission, with around 22.6 Million Tonnes Per Annum (MTPA) capacity currently operational or under implementation.
Union Minister of State for Coal and Mines Satish Chandra Dubey, in a written reply in the Rajya Sabha, said the existing and upcoming capacity includes Jindal Steel Limited (JSL) with around 8 MTPA operational capacity, Talcher Fertilisers Limited (TFL) with 2.6 MTPA capacity under implementation, and eight projects approved under the ₹8,500 crore Financial Incentive Scheme with a combined capacity of around 12 MTPA.
The government has approved the Scheme for Promotion of Surface Coal/Lignite Gasification Projects on May 13, 2026, with a financial outlay of ₹37,500 crore.
The scheme is expected to utilise around 75 MTPA of coal and significantly contribute towards achieving the 100 MT gasification target.
Under the ₹8,500 crore Scheme for Promotion of Coal/Lignite Gasification, approved in January 2024, eight projects have been sanctioned. Of these, the Jindal Steel Limited project has achieved financial closure and is under construction, while five projects have completed groundbreaking activities and are at various stages of clearances and implementation.
The Centre has announced several measures to promote coal gasification projects, including financial incentives, coal linkage support and policy reforms.
Projects under the ₹8,500 crore scheme are eligible for a financial incentive of 15 per cent of capital expenditure, while projects under the ₹37,500 crore scheme can receive support of up to 20 per cent of eligible plant and machinery costs.
To ensure coal availability, the government has introduced a separate sub-sector for “production of Syngas leading to coal gasification” under coal linkage auctions, with the floor price kept at par with the power sector. The tenure of coal linkages has also been extended to 30 years.
The government has further provided policy support through a 50 per cent rebate in revenue share for coal used in gasification, along with guidelines for Underground Coal Gasification (UCG) projects.
Pilot projects have been exempted from certain requirements, while the floor price for UCG coal block auctions has been reduced from 4 per cent to 2 per cent. Waiver of upfront payments and a 50 per cent rebate on Performance Bank Guarantee have also been approved.
The Ministry of Coal also organised a BRICS Side Event on Clean Coal Technologies during India’s BRICS Chairmanship on June 24, 2026, focusing on coal gasification and exchange of global practices in clean coal technologies.
The Ministry said coal gasification enables cleaner and value-added utilisation of domestic coal for producing synthetic natural gas, chemicals, fertilisers, hydrogen and other downstream products, helping reduce import dependence.
The government expects the coal gasification initiatives to strengthen energy security, promote import substitution, attract investments, generate employment and improve resource utilisation through cleaner technologies.
On commissioning of projects under the ₹8,500 crore scheme, ₹37,500 crore scheme and Talcher Fertilisers Limited, import substitution through coal/lignite gasification is expected to be around ₹1.5 lakh crore annually, the Minister said.
TNT KM
