The Ministry of Coal has announced its target to gasify 100 million tonnes of coal by FY 2030 as part of its energy transition plans, according to a statement. In line with this goal, the ministry is considering a comprehensive scheme with a budget of ₹6,000 crore to promote coal and lignite gasification projects for both public sector undertakings (PSUs) and the private sector.

The adoption of gasification technology in India is expected to revolutionize the coal sector by reducing the country's dependence on imports of natural gas, methanol, ammonia, and other essential products, the ministry stated. Currently, India imports approximately half of its natural gas, most of its methanol, and 13-15% of its total ammonia requirement. The statement also highlighted that coal gasification will contribute to India's vision of self-reliance and create employment opportunities.

By 2030, coal gasification is anticipated to make a significant contribution to India's development by reducing imports. This initiative has the potential to alleviate the environmental burden by reducing carbon emissions and promoting sustainable practices, aligning with India's global commitments towards a greener future, the statement added.

The selection of entities for the gasification scheme will be conducted through a competitive and transparent bidding process. The selection of PSUs and private sector companies for budgetary support in gasification projects will be done through a tariff-based bidding process, with criteria developed in consultation with NITI Aayog, the government think-tank.

The ministry is also considering providing incentives to reimburse GST compensation cess on coal utilized in gasification projects. Additionally, the ministry highlighted collaborative efforts in advancing Surface Coal Gasification (SCG) projects across Coal India Limited (CIL) coalfields.

Strategic bilateral agreements were executed in October 2022, including a Memorandum of Understanding (MoU) between BHEL & CIL, as well as an MoU between IOCL, GAIL & CIL, aiming to foster cooperation and expertise in driving the implementation of SCG projects.

The CIL Board has accepted the pre-feasibility reports for three projects, including ECL, MCL, and WCL, and has approved the initiation of pre-project activities such as topography survey, soil investigation, and water availability studies. Tendering activities are also underway to determine firm prices required for the preparation of a Detailed Feasibility Report (DFR) for the respective projects.

The CIL Board has given 'in-principle' approval for the formation of Joint Ventures as envisaged above, and negotiations and finalization of the Joint Venture agreement are currently in progress.