The Union Cabinet, chaired by the Prime Minister, has approved a major scheme to promote surface coal and lignite gasification projects in India. This topic is important for aspirants preparing through IAS coaching in Hyderabad, UPSC coaching in Hyderabad, and UPSC online coaching.
Coal Gasification
• Definition: Coal gasification is a thermo-chemical process that converts coal or lignite into synthesis gas (syngas), mainly carbon monoxide (CO) and hydrogen (H₂).
• Step 1: Coal or lignite reacts with oxygen and steam under high temperature and pressure, converting solid fuel into gaseous components.
• Step 2: The resulting syngas is purified by removing sulphur, ash, and particulates before industrial use.
Applications of Syngas (Coal Gasification Output)
Power Generation & Synthetic Natural Gas (SNG)
• Syngas can be used for electricity generation or converted into SNG, reducing LNG import dependence.
Fertiliser Industry
• Acts as feedstock for urea and ammonia production, reducing fertiliser imports.
Chemical Sector
• Used in the manufacture of methanol, dimethyl ether (DME), and ammonium nitrate.
Liquid Fuels
• Syngas can be converted into liquid fuels as alternatives to crude oil-based products.
Hydrogen Production
• Provides a pathway for hydrogen generation, supporting India’s clean energy transition.
Importance of Coal Gasification for India
• India possesses around 401 billion tonnes of coal and 47 billion tonnes of lignite reserves.
• Coal contributes more than 55% of India’s energy mix.
• India still imports LNG, methanol, fertilisers, and coking coal in large quantities.
Benefits of Gasification
• Cleaner Utilisation: More environment-friendly than direct coal combustion.
• Import Substitution: Reduces dependence on imported fuels and chemicals.
• Energy Security: Protects India from global energy price volatility.
• Industrial Diversification: Encourages industrial growth in coal-bearing regions.
• Policy Alignment: Supports Atmanirbhar Bharat and Make in India initiatives.
• National Target: India aims to gasify 100 million tonnes of coal by 2030.
Strategic & Economic Benefits
• Expected investment mobilisation of ₹2.5–3 lakh crore across the value chain.
• India’s FY2025 import bill for substitutable products stood at ₹2.77 lakh crore.
• Employment generation of around 50,000 direct and indirect jobs across 25 projects.
• Estimated annual revenue of ₹6,300 crore from 75 million tonnes gasification capacity.
• Reduces vulnerability to geopolitical disruptions such as West Asia oil shocks and Strait of Hormuz tensions.
Features of the Scheme
- Financial Outlay: ₹37,500 crore.
- Target: Gasification of 75 million tonnes of coal/lignite.
- Project Selection: Competitive bidding with transparent evaluation.
- Incentives: Up to 20% of plant & machinery cost, disbursed in four instalments.
- Caps:
- ₹5,000 crore per project.
- ₹9,000 crore per product category (excluding SNG & urea).
- ₹12,000 crore per entity/group.
Structural Reform: Coal linkage tenure extended to 30 years, ensuring long‑term policy certainty.
Challenges
• Coal gasification projects require high capital investment and advanced technology.
• Carbon emissions and environmental concerns still remain significant.
• Need for carbon capture and cleaner technologies for sustainability.
• Availability of water and infrastructure may affect project viability in some regions.
Conclusion
The Cabinet approval for coal gasification marks a strategic step toward energy security, industrial diversification, and import reduction. By converting abundant coal reserves into cleaner syngas, India can strengthen domestic manufacturing and reduce external dependence in critical sectors. Aspirants preparing through IAS coaching and civils coaching in Hyderabad should understand its relevance in energy policy, environmental management, and economic resilience.
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