JAIPUR: The first round of the Centre's Rs 37,500 crore scheme to promote surface coal and lignite gasification has received a strong response from industry, with seven applications submitted by major corporates and public sector undertakings. The Ministry of Coal, in a statement issued on Tuesday, said the first phase of the scheme attracted a total of seven applications from leading companies and PSUs across the country.
Which Companies Applied
According to the ministry, Adani Enterprises Ltd submitted three separate proposals related to urea production, making it the largest applicant among the seven. Gallantt Ispat Ltd applied for a project involving direct reduced iron (DRI) and syngas production.
NTPC Ltd, a leading public sector company, submitted an application for a synthetic natural gas (SNG) project, while Shyam Sel & Power Ltd put forward a proposal for syngas production. Talcher Fertilisers Ltd also submitted an application for a urea production project. This shows that both leading private and public sector companies have shown strong interest in the scheme.
Ministry's Response
Commenting on the positive response, a senior Ministry of Coal official said that even when reports suggested the scheme had "no takers," the ministry remained confident that industry would respond favourably. The official noted that receiving seven applications in the very first round — including from some of the country's largest industrial houses and public sector undertakings — is clear proof that industry has full confidence in the scheme and in India's coal gasification mission. The official described it as a strong and unambiguous response from the market.
Objective and Structure of the Scheme
The scheme was approved by the Union Cabinet in May and has a total financial outlay of Rs 37,500 crore. Its main objective is to encourage the conversion of domestically available coal and lignite into higher-value products such as syngas, methanol, ammonia, urea and hydrogen. Through this initiative, the government aims to reduce the country's dependence on imports of LNG, urea, ammonia and methanol.
According to the ministry, the combined import value of these four products — LNG, urea, ammonia and methanol — stood at around Rs 2.77 lakh crore in FY25. By boosting domestic coal gasification capacity, the government hopes to bring about a significant reduction in this substantial import bill, which will also strengthen the country's energy security.
Target for 2030 and Potential Investment
Under this scheme, India has set an ambitious target of achieving 100 million tonnes of coal gasification capacity by 2030, of which 75 million tonnes of capacity is to be developed specifically under this scheme. The ministry estimates that the scheme could attract investments of up to Rs 3 lakh crore in total. It is also expected to generate a large number of direct and indirect employment opportunities, which could give fresh momentum to the economies of states and regions associated with the coal sector.
Link to the Earlier Scheme
This new scheme is essentially a continuation of the Rs 8,500 crore financial incentive scheme approved in January 2024, under which eight gasification projects are currently at various stages of implementation. In this way, the government is gradually expanding its incentive framework in the coal gasification sector so that more companies come forward to adopt this technology.
Second Round Also Launched
Following the success of the first round, the government launched the second round of the scheme on Tuesday itself. According to the Request for Proposal (RFP) document, application windows will open at two-month intervals, giving eligible companies further opportunities to submit their proposals from time to time. This arrangement has been designed to ensure continuous and sustained industry participation in the scheme, rather than making it a one-time process.
It is worth noting that the first-round applications were submitted after the RFP was issued on July 7. The government believes that this scheme will not only reduce import dependence but will also take India further towards clean energy and industrial self-reliance through the better and value-added use of domestic coal resources. More companies are expected to join the scheme in the coming months, especially now that the application process will open at regular intervals.
