Cabinet Approves Rs 8,500 Cr Incentive for Coal Gasification

The Union Cabinet on Wednesday approved a Rs 8,500 crore incentive scheme for coal gasification projects, sources said. The adoption of gasification technology in India is expected to reduce the country’s reliance on imports of natural gas, methanol, ammonia and other essential products .

What is coal gasification?

Coal gasification is a process that converts coal into a liquid fuel known as syngas or synthesis gas. Syngas can be used for power generation and to make methanol, which can be further converted into other chemicals and fuels.

Coal gasification involves partially oxidising coal by air, oxygen, steam, or carbon dioxide under controlled conditions. The resulting syngas consists of hydrogen, carbon monoxide, carbon dioxide, methane, and other gases.

Why is coal gasification important for India?

India has abundant coal reserves, but faces challenges in meeting its growing demand for natural gas, methanol, ammonia and other products that are essential for various sectors such as fertilisers, chemicals, steel, and transport.

By adopting coal gasification technology, India can utilise its domestic coal resources more efficiently and reduce its dependency on imports of these products. Coal gasification can also help in reducing greenhouse gas emissions and improving air quality by producing cleaner fuels.

What are the benefits of the incentive scheme?

The incentive scheme approved by the cabinet aims to promote coal gasification projects in India by providing financial support for capital expenditure and feedstock transportation. The scheme will cover projects that use both Indian and imported coal .

The government is targeting to gasify 100 million tonnes (MT) of coal by 2030, which can produce about 50 MT of syngas per year. This can save about $4 billion in import bills annually and create about 1 lakh direct and indirect jobs.

The incentive scheme is expected to boost the development of coal gasification projects in India and enhance the country’s energy security and self-reliance.