New Delhi: The Ministry of Coal has set a target to achieve coal gasification of 100 million tonne (MT) coal by Financial Year 2030 reflecting the government’s commitment to harnessing the power of coal gasification.
With the introduction of this ambitious proposal, the ministry aims to propel the nation’s progress. The proposal incorporates a comprehensive set of measures that capitalise on natural resources and demonstrate the financial and technical feasibility of coal gasification. This initiative is set to meet the future energy needs of the country while stimulating other sectors.
The adoption of gasification technology in India will revolutionise the coal sector, reducing reliance on imports of natural gas, methanol, ammonia and other essential products.
Currently, India imports approximately 50% of its natural gas, over 90% of its total methanol consumption and around 13-15% of its total ammonia consumption to cater to the domestic demand.
It will contribute to India’s vision of becoming Aatmanirbhar and create a surge in employment opportunities. The implementation of coal gasification is expected to make significant contributions to the nation’s development by reducing imports by 2030.
This initiative holds the potential to alleviate the environmental burden by reducing carbon emissions and fostering sustainable practices, contributing to our global commitments towards a greener future.
The selection of entities for the coal/lignite gasification scheme will be carried out through a competitive and transparent bidding process. Further, the government is considering providing budgetary support to eligible government PSUs, and private sector enabling them to undertake coal gasification projects.
In the first segment, the government will provide support to PSUs. The second segment encompasses both the private sector and PSUs, with a budget allocation granted to each project.
The selection of at least one project under this segment will be determined through a tariff-based bidding process, with criteria formulated in consultation with NITI Aayog. Lastly, the third segment involves the provision of budgetary support for demonstration projects utilizing indigenous technology and/or small-scale product-based gasification plants.
In addition, the ministry is also considering an incentive to reimburse the Goods and Services Tax compensation cess on coal utilized in gasification projects for a period of 10 years after the commercial operational date, provided that the GST compensation cess is extended beyond Financial Year 2027. This incentive aims to offset the inability of entities to claim input tax credit for the same.
The ministry highlights collaborative efforts in advancing Surface Coal Gasification (SCG) projects across Coal India Limited (CIL) coalfields. In October 2022, strategic bilateral agreements were executed, including an MoU between Bharat Heavy Electricals Limited and CIL, as well as an MoU between Indian Oil Corporation Limited, Gas Authority of India Limited and CIL.
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