Why in news?
In April 2026 the Union Cabinet approved an ₹8,500 crore incentive scheme to accelerate coal and lignite gasification projects across India. The scheme aims to attract private and public investment and reduce dependence on imported petroleum products, ammonia and fertilizers.
Background
India has more than 400 billion tonnes of coal reserves. Traditionally, coal has been burned to generate electricity, contributing to air pollution and carbon emissions. Gasification converts coal into syngas (a mixture of hydrogen, carbon monoxide and methane) that can be used to produce chemicals, fertilizers, liquid fuels and power with lower emissions.
Highlights of the scheme
- Financial incentives: A corpus of ₹8,500 crore will subsidise capital costs for approved gasification projects. This reduces risk for investors and encourages early adoption of the technology.
- Target: The government seeks to achieve 100 million tonnes of coal gasification capacity by 2030. Current project proposals worth around ₹6,500 crore have already been received.
- Energy security: Gasification will enable production of synthetic natural gas, methanol and urea domestically, reducing reliance on imported crude oil and natural gas.
- Environmental benefits: When combined with carbon capture and utilisation, gasification can be part of a cleaner coal strategy. It produces fewer particulates and sulphur emissions than direct combustion.
- Industry participation: Both public sector units and private companies are expected to participate. The scheme is aligned with the government’s “Aatmanirbhar Bharat” (self‑reliant India) vision.
Conclusion
By incentivising coal gasification, India hopes to diversify its energy mix and develop domestic chemical industries. The success of the scheme will depend on timely project execution, technology adoption and integration of carbon capture solutions.
Source: The Economic Times